The subject of a perennial tug-of-war within the healthcare industry and among congressional leaders, an offset provision that would have banned referrals to specialty hospitals in which physicians have an ownership interest was dropped from the mental health parity provisions that passed as part of the Wall Street rescue bill on October 3, 2008. Surfacing in various "must pass" legislation throughout the year -- from the farm bill to the war appropriations supplemental and subsequently cut from the bills before passage -- the effort to ban self-referrals to physician-owned specialty hospitals reflects a wider philosophical divide between greater competition versus more restrictions on market forces within the industry.
Congressional leaders have signaled that they may convene a "lame duck" session after the November 4 election to consider a second stimulus bill. In a recent alert to members, the American Hospital Association has indicated that a second economic stimulus bill by Congress could present another opportunity to advance "a ban on self-referral to new physician-owned hospitals, and grandfathering of existing facilities with appropriate growth limitations."
Our take: There is little allure to something like the physician referral ban on a stimulus bill because, arguably, any offsets to such legislation lessen the stimulus effect. Further, supporters of the stimulus bill will want it to sail through as smoothly as possible and the ban would be an impediment to that. Additionally, the outcome of the elections is unlikely to change staunch resistance to the ban from its bipartisan opponents.