Bill Could Kill Doc-Owned Hospitals

Feds may see $1.2B in savings if for-profit facilities come under new regulation
By Ambreen Ali,  Newser User
Posted Jan 22, 2009 12:36 PM CST
Doctor-owned hospitals don't always have money-losing social necessities like emergency rooms, labor units, or mental health facilities.   (AP Photo)
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(Newser) – A clause in a child-health bill just passed by the House would restrict Medicare payouts for, and the expansion of, doctor-owned hospitals, the specialized-care units blamed for hurting income at nonprofit facilities, the Wall Street Journal reports. There are 200 such facilities nationwide, touted for their efficiency but criticized for giving physicians a financial incentive to recommend unnecessary tests and surgeries.

If the bill’s Senate counterpart—which has no such restrictions—passes next week, the two will be combined and presented to President Obama. The final version may contain the limits, held up for years by Republican opposition and presidential vetoes. Congress expects to save $1.2 billion if the hospitals are contained, but the industry trade group calls that figure “completely outrageous and false.”