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Specialty hospital moratorium ends, but immediate construction not expected

Ambulatory Surgery Reimbursement Update, June 14, 2005

Despite the end to an 18 month federal moratorium on new specialty hospitals last Tuesday, investors in the physician-owned facilities will probably wait on construction of new facilities, according to The Dallas Morning News.

Policymakers in Washington are in the midst of trying to determine whether specialty hospitals are unfair competition and present a conflict of interest to community hospitals.

Lobbyists against the growth of the specialty hospital industry say these hospitals choose the most profitable pieces of business and leave charity care to community hospitals.

"They replicate wards of a hospital and move across the street," said Chip Kahn, president of the Federation of American Hospitals, according to The Dallas Morning News. "That's not a hospital."

Supporters of specialty hospital growth say the hospitals give patients greater access to care and provide healthy competition.

"Physician ownership drives the quality," said Randy Fenniger, lobbyist for the American Surgical Hospital Association. "It's a sign of commitment to the hospital," The Dallas Morning News reported.

A moratorium of sorts remains because the Centers for Medicare & Medicaid Services said last month that it will not certify specialty hospitals for reimbursement for six months.

To view the Specialty Hospitals Marketplace Report on potential new facilities, issued by the Government Accountability Office, click here (Adobe Acrobat required).

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