PHA News Release: Federal Judge Finds Key Provision of Health Reform Law Retroactive, Claims Jurisdiction in Lawsuit Challenging Ban on Physician-Owned Hospitals

A U.S. District Court Judge has said the Court has jurisdiction to hear a case challenging health reform law's ban on new physician-owned hospitals and expansions of existing facilities, according to a news release from Physician Hospitals of America and the Texas Spine and Joint Hospital, the plaintiffs in the case.

 

Federal Judge Michael H. Schneider, U.S. District Court Judge, in the Eastern District, of Tyler, Texas, said section 6001 of the health reform act, which essentially prevents the formation of new physician-owned hospitals that bill Medicare for patient services, limits Medicare service expansions at existing facilities and freezes the amount of physician ownership in existing hospitals as of March 23, does have retroactive effect and he gave notice of a forthcoming opinion and ordered the cancellation of the Dec. 9 trial date. Mr. Schneider did signal that he will rule section 6001 to be within allowable bounds of retroactively, and neither an equal protection violation or unconstitutionally vague.

 

"We are pleased the Court has decided it has jurisdiction over this case, and has determined that stopping the development of physician-owned hospitals in progress is retroactive in effect," said lead council Scott Oostdyk, partner, McGuireWoods, according to the news release. "The Supreme Court of the United States has always highly disfavored retroactive laws. We await the Court's decision about why this one is not illegal."

 

Dr. Michael Russell, PHA president and TSJH partner, said the organizations plan to continue to move forward in their fight to repeal section 6001.

 

"We will stand up and fight for our patients and for the future of health care in America," said Dr. Russell, according to the release. "So much is at stake, not only from a Constitutional standpoint, but also regarding patients' ability to continue to choose the highest quality, most efficient care offered at physician hospitals across the country."

 

Read more about the lawsuit challenging the ban on physician-owned hospitals.

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