Why CMS gets to decide whether this Texas hospital expands

Hospital expansion is not an easy process if the facility is physician-owned, according to a Bloomberg BNA report.

To address concerns over potential Stark Law violations, a ban on the expansion of physician-owned hospitals was put into place under the Affordable Care Act.

Stark Law prohibits most Medicare self-referrals, including where physicians own or invest in a hospital.

However, there are a few exceptions to the ban if a hospital serves a higher percentage of Medicaid patients than any other hospital in its county and is in a state with a lower average bed capacity than the national average, according to the report.

Texas Health Presbyterian Rockwall — a joint venture owned by Arlington-based Texas Health Resources and physicians — meets the definition under federal law of physician-owned hospital. The facility recently filed a request to expand, claiming it meets the criteria to qualify for an exception to the ban. CMS will determine if the hospital qualifies for the exception and publish its decision in the Federal Register.

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