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February 21, 2017



AAOS Applauds House for Introducing Legislation to Lift Hospital BanEnerg

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AAOS Applauds House for Introducing Legislation to Lift Hospital BanEnergy and Commerce Health Care Reform Agenda

On February 16, 2017, Reps. Sam Johnson (R-TX) and Sheila Jackson-Lee (D-TX) introduced H.R. 1156, the Patient Access to Higher Quality Health Care Act of 2017. This legislation would repeal controversial restrictions contained within the Affordable Care Act (ACA) that prevent the expansion and new construction of physician-owned hospitals (POH)s. Section 6001 of the ACA included provisions that strictly prohibit any new POH from participating in Medicare or Medicaid. Furthermore, the ACA also prohibits existing POHs from expanding unless they meet a very complicated set of criteria as part of a long application process. H.R. 1156 will repeal these provisions.

“Hospitals owned by physicians are currently restricted under law from expanding their capacity to treat more patients,” stated Gerald R. Williams, Jr., MD, President of AAOS. “These physician-led, patient centric hospitals consistently rank higher under current quality measures than other hospitals and include seven out of the top ten hospitals in the country. They also save Medicare money - $3.2 billion over ten years – and inject funds into local economic activity. The inability of physician-owned hospitals to address growing demand for health care services is bad for our entire health care system and penalizes patients who deserve the right to receive care at the hospital of their choice. We thank Reps. Johnson and Jackson-Lee for their leadership on this issue and implore Congress to lift the restrictions on physician-owned hospitals so more patients can benefit from them.”

“I’m sure all Americans can agree that everyone deserves access to quality, affordable health care,” said Johnson. “And I’m sure we also agree that competition in the marketplace is a good thing. Unfortunately, Obamacare has been picking winners and losers when it comes to health care – and American families are paying the price due to this lack of competition. Physician-owned hospitals are small in number, so there is plenty of room in the health care market. It makes no sense to prohibit good hospitals from serving their communities. This bill is about doing the right thing. Americans want, need, and deserve quality, affordable health care options.”

Physician-owned hospitals consistently rank very high under current quality measures compared to other hospitals. Under the ACA, hospitals were provided an incentive to improve their processes and patient satisfaction though the Hospital Value Based Purchasing program. When a hospital performs well, it receives a small increase in its total Medicare payment and poorly performing hospitals receive a penalty. In FY2017, 7 out of the top 10 and 40 out of the top 100 hospitals were physician-owned. Additionally, a comprehensive, peer-reviewed study published by the British Medical Journal recently found that overall, “physician-owned hospitals have virtually identical proportions of Medicaid patients and racial minorities and perform very similar to other hospitals in terms of quality of care.” 

AAOS Ambassadors have mobilized to help advance this legislation, writing emails and making phone calls to their members of Congress asking them to sign on as cosponsors.