Providing for Consideration of H.R. 1424, Paul Wellstone Mental Health and Addiction Equity Act of 2007
PROVIDING FOR CONSIDERATION OF H.R. 1424, PAUL WELLSTONE MENTAL HEALTH AND ADDICTION EQUITY ACT OF 2007 -- (House of Representatives - March 05, 2008)
BREAK IN TRANSCRIPT
Mr. PALLONE. Mr. Speaker, I want to thank the gentlewoman from Florida. She makes the point that this physician self-referral provision in the bill actually serves two purposes. On the one hand, it is about half of the pay-for for the cost of the legislation. The physicians self-referral basically generates about $2.4 billion over 10 years, which is about half of the pay-for in this bill.
But beyond that, in addressing the gentleman from Washington's concerns, it is actually a good thing. It is a good government proposal. And what it does, it ends the ability of physicians to self-refer to a hospital in which they have ownership. This change is consistent with the original intent of the physicians self-referral laws. The loophole for whole hospital ownership was only there because of tiny rural hospitals that were then owned by one doctor who practiced there.
Now that structure is no longer commonplace and that is why the hospital associations all endorse our bill. The bill does provide a grandfather for hospitals that currently have physician ownership and had a provider agreement with Medicare as of July 2007, the date of introduction of the bill. Within 18 months of enactment, they need to meet a standard that no physician owned more than 2 percent of the facility individually and that aggregate physician ownership was 40 percent or less.
So it is possible for the hospital in the State of Washington to reconfigure and meet this provision. But I just want to understand why we are doing this. These physician-owned hospitals essentially are a problem because they are being overutilized. There is overutilization. In other words, physicians are referring patients to these hospitals in many cases for unnecessary procedures. The reason why CBO scores this and uses it as a pay-for is because we know that these unnecessary procedures or overutilization takes place and is not basically a good thing. So we are trying to end this practice of self-referral. We are not completely precluding a hospital from reconfiguring itself and staying open, but, generally speaking, we need to end the practice.
BREAK IN TRANSCRIPT
Source