New Texas hospital unlawful, hospital org says: 3 things to know

Edinburg, Texas-based Doctors Hospital at Renaissance has received an exception from CMS to establish a new physician-owned hospital 55 miles away in Brownsville, a move heavily criticized by the Federation of American Hospitals as unlawful.

"FAH is extremely disappointed by CMS' decision to weaken the law banning new physician-owned hospitals," Chip Kahn, CEO and president of FAH said in a statement shared with Becker's. "This decision sets an unfortunate precedent beyond South Texas as the law limits significantly the terms under which POHs can expand, much less build basically new hospitals."

The planned hospital is some distance from the group's main campus, and DHR isn't the highest Medicaid provider in its county, Mr. Khan said, conditions which do not meet requirements under the current law.

"We urge CMS to reverse the regulatory actions of the last administration that removed the guardrails that are intended to prevent POHs from abusing the High Medicaid expansion exception and violating Congressional intent by building what are tantamount to new hospitals," Mr. Kahn said. "This decision establishes a new POH in a new service area, which is a clear violation of the law." 

Three things to know:

  1. Congress passed legislation in 2010 banning new POHs because of concerns including patient safety and excess utilization and spending from physician self-referral. 
  2. A "high Medicaid" exception was established enabling limited expansion if a hospital is the dominant Medicaid provider in a given county.
  3. More recent legislation removed a requirement that such expansion be on the main campus of a hospital.

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