The U.S. House of Representatives has passed a bill (the “Children’s Health and Medicare Protection Act of 2007”—HR 3162) that contains a provision eliminating the whole hospital exception to the Stark Law. The whole hospital exception, which has been included in the Stark Law since its inception, permits referrals of Medicare and Medicaid patients to hospitals by physician owners under specified conditions. Unlike a prior referral moratorium, which was limited to specialty hospitals, the proposed Stark Law amendment would eliminate the exception for physician ownership in all hospitals. The amendment does provide a grandfather for hospitals with a Medicare provider agreement in effect as of July 24, 2007. Grandfathered hospitals are, however, subject to significant restrictions. For example, they are prohibited from expanding the number of operating rooms and beds above those in existence as of the date of enactment, aggregate physician ownership cannot exceed 40%, and an individual physician’s ownership cannot exceed 2%. The bill must still pass through conference committee, and the President has promised to veto the legislation because of expansion of the CHIP program and an increase in taxes that would result. Nevertheless, the bill bears watching, as does future legislation for similar provisions.