The Medicare Modernization Act of 2003 imposed an 18-month moratorium on physician referrals to specialty hospitals in which such physicians have an ownership interest. The same legislation required the Medicare Payment Advisory Commission (MedPAC) and Centers for Medicare and Medicaid Services (CMS) to study certain specified aspects of specialty hospitals and physician referral patterns to such facilities.
MedPac today issued the first of the two anticipated reports, and urged Congress to, among other things extend the moratorium another 19 months to January 2007 and to refine Medicare payments to all hospitals to more fully capture differences in severity of illness among patients and for other purposes.
Although CMS has yet to issue its report, CMS officials provided a glimpse into the agency's thinking through testimony presented at congressional hearings today before the House Ways and Means Health Subcommittee and Senate Finance Committee.
The current moratorium will lapse in June 2005 unless Congress takes action to extend or expand the prohibition. Congressional scrutiny of specialty hospitals is expected to escalate with today's developments.