Bill would allow, expand physician ownership of hospitals in rural areas

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Could doctor ownership help in parts of the country where rural hospitals are struggling financially and patients lose access to care?

Some lawmakers said the new Physician Led and Rural Access to Quality Care Act will bolster medical care in those areas. A group of bipartisan lawmakers this. month introduced the act in the House of Representatives.

The bill would allow certain exemptions to rules for physician-owned hospitals in rural areas. It would also remove a ban that prevents existing physician-owned hospitals from expanding, according to the announcement by Rep. Michael C. Burgess, MD (R-Texas), Rep. Tony Cardenas (D-California), Rep. Morgan Griffith (R-Virginia), and Rep. Vicente Gonzalez (D-Texas).

“With our nation's health care system grappling with consolidation, rural hospital closures, and limited patient choices, it is essential for Congress to find prompt solutions,” the lawmakers’ announcement said. “This bill provides a means for communities to expand health care options for patients and allows physicians the opportunity to continue practicing medicine.”

The bill would define a “covered rural hospital” as one located in a rural area and more than a 35-mile drive from another hospital or critical access hospital, or a 15-mile drive in mountainous terrain or areas with only secondary roads.

"Texans in rural areas face constant challenges due to limited access to patient care and hospitals, putting their wellbeing at greater risk daily,” Burgess said in the news release. “The Physician Led and Rural Access to Quality Care Act will enable physicians to continue practicing medicine through physician ownership and support the expansion of existing hospitals in rural communities.

“Having owned my own practice, I understand the critical importance of affordable health care prices and timely access to high-quality care,” said Burgess, now the longest tenured physician serving in Congress. “I am honored to lead this bipartisan legislation with my fellow members to ensure that rural patients across America receive the care they need."

The Social Security Act would be revised to change exemptions related to physician self-referral for physician-owned hospitals, according to a summary of the legislation.

The Affordable Care Act included a moratorium that, for more than a decade, prevents physicians from competing with corporate-owned hospitals, according to the Physicians Advocacy Institute (PAI).

“Evidence shows POHs (physician-owned hospitals) can deliver care more efficiently for patients – a key consideration as health care costs rise across the nation,” according to PAI. The Institute and The Physicians Foundation commissioned a study that found physician-owned hospitals saved between 8.6% and 15.2% compared with traditional hospitals for Medicare’s 20 most expensive conditions.

“Health care consolidation and the hospital closures that have resulted have left millions in rural areas without access to needed care,” PAI Vice President Michael Darrouzet said in a statement. He also is executive vice president/CEO of the Texas Medical Association. “The expansion of physician-owned hospitals is a crucial step towards restoring access to health care for everyone in the United States, regardless of their ZIP Code.”