Court upholds PPACA limits on physician- owned hospitals


A federal court in Houston dealt a set- back to physician-owned hospitals in a ruling that, at least for now, upholds re- strictions on the entities included in the Patient Protection and Affordable Care Act (PPACA).


Physician Hospitals of America and


Texas Spine & Joint Hospital in Tyler challenged the constitutionality of pro- visions in the federal health system re- form law that halt Medicare payments to physician-owned facilities formed after Dec. 31, 2010, and prohibit doctor inves- tors from expanding existing hospitals or establishing new ones. In a largely procedural move, the 5th


U.S. Circuit Court of Appeals on Aug. 16 dismissed the lawsuit, saying it lacked authority to rule on the matter (www .ca5.uscourts.gov/opinions/pub/11/11- 40631-CV0.wpd.pdf). Although judges did not address the underlying issues in the case, the decision leaves intact the PPACA prohibitions. The appellate ruling is disappointing news for the more than 90 physician- owned hospitals that call Texas home, according to figures from the Texas Phy- sician Hospitals Advocacy Center. The Texas Medical Association and The Physicians Foundation filed an am- icus brief in the case, urging the court to consider “the exceptional benefits” physician-owned hospitals (POHs) have contributed to health care access and quality, even to local communities. “Studies have shown that POHs have better health care outcomes, shorter hospital stays, and much higher patient satisfaction ratings than non-POHs,” typ- ically at a lower cost than nonphysician- owned hospitals, the brief states. That’s in addition to providing charity care and hospital access in poor areas and em- ploying thousands locally. The physician organizations disput-


ed arguments by U.S. Department of Health and Human Services Secretary


October 2012 TEXAS MEDICINE 31


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