AHA, FAH Urge CMS to Deny Exception to Physician Self-Referral Prohibition

The AHA and FAH urge CMS to deny DHR’s request for an exception to the prohibition on expansion of the facility capacity of a physician-owned hospital. CMS is not obligated by statute or regulation to grant an expansion request to any facility that satisfies the “high Medicaid facility” exception criteria, and CMS should deny DHR’s request because the requested expansion is inconsistent with Congress’s intent, does not serve a valid public policy purpose, and would set a bad precedent.

Further, the current exception request clearly illustrates how the “high Medicaid facility” exception, as amended in the 2021 hospital outpatient prospective payment system (OPPS) final rule published on December 2, 2020, opens the door for requests that may technically meet, but clearly violate the spirit of the general statutory ban on physician-owned hospitals. Accordingly, we also urge CMS to reverse the 2020 amendments to the “high Medicaid facility” exception.

View the entire letter below.