Physician Led and Rural Access to Quality Care Act
- Sponsor
- Rep. Griffith, H. Morgan [R-VA-9]
- Committees
- Ways and Means Committee (primary)
- Last action
- Mar 18, 2025
Bottom line
The bill aims to enhance healthcare access in rural communities by relaxing federal restrictions on physician-owned hospitals, allowing new facilities to operate with physician referrals and existing ones to expand.
What it actually does
This bill amends the Social Security Act to revise physician self-referral exemptions, specifically allowing physician-owned hospitals in designated rural areas to receive referrals from their physician-owners. It also removes the existing prohibition on the expansion of physician-owned hospitals that were established before the Affordable Care Act's restrictions, enabling them to increase their capacity.
Proponents argue
Proponents argue that this bill will significantly improve healthcare access and quality in underserved rural areas by fostering the growth of physician-owned hospitals. They contend that current self-referral laws disproportionately hinder rural communities from establishing or expanding vital healthcare facilities, and that physician-led care can offer more efficient and patient-centered services.
Opponents contend
Opponents typically argue that physician self-referral can lead to conflicts of interest, overutilization of services, and increased healthcare costs. They express concerns that allowing physician-owned hospitals to expand or operate with self-referrals, even in rural areas, could divert profitable patients from existing community hospitals, potentially undermining the financial stability of facilities that serve all patients, regardless of their ability to pay.
The bill is exceptionally short and clearly written, making it very accessible for a quick and informed evaluation.
Section 2(a)(1) amending Section 1877(d)(2)(C) and (d)(3)(D) of the Social Security Act
Exemption for Rural Physician-Owned Hospitals from Self-Referral Ban
This provision modifies the Stark Law, which generally prohibits physicians from referring Medicare and Medicaid patients to entities where they have a financial interest. Specifically, it creates an exception for 'covered rural hospitals,' allowing physicians to refer patients to these facilities even if they have an ownership stake. This change aims to remove a significant regulatory barrier for physician-owned hospitals in designated rural areas.
Supporters argue
Supporters argue that this exemption is critical for improving healthcare access in rural areas where physician-owned hospitals can fill significant gaps in care. They believe that the benefits of increased access and physician-led innovation outweigh the risks of self-referral in these underserved communities, especially given the lower patient volumes compared to urban settings.
Critics contend
Critics contend that even with geographic limitations, allowing physician self-referral can lead to conflicts of interest, potentially driving up healthcare costs through unnecessary procedures. They also worry about the potential for physician-owned hospitals to 'cherry-pick' healthier, more profitable patients, leaving community hospitals to bear the burden of less profitable or uncompensated care.
Tradeoffs
This provision navigates the tension between promoting healthcare access and physician investment in rural areas versus concerns about potential conflicts of interest, overutilization, and market fairness that the Stark Law was designed to address.
Section 2(a)(2) adding Section 1877(h)(8) to the Social Security Act
Definition of 'Covered Rural Hospital'
This provision establishes a precise definition for a 'covered rural hospital,' which is eligible for the self-referral exemption. To qualify, a hospital must be located in a rural area (as defined by existing law) and, crucially, must be situated more than a 35-mile drive (or 15-mile drive in mountainous terrain or areas with only secondary roads) from another hospital or critical access hospital at the time it enrolls under Medicare. This ensures the exemption targets truly remote and underserved locations.
Section 2(b) amending Section 1877(i) of the Social Security Act
Sunset of Expansion Prohibition for Existing Physician-Owned Hospitals
This provision removes the prohibition on the expansion of physician-owned hospitals that were already in existence before the Affordable Care Act (ACA) placed restrictions on them. Previously, these 'grandfathered' hospitals could continue to operate but were generally prevented from increasing their bed count or operating rooms. This amendment allows these existing facilities to expand their capacity, effective immediately upon enactment, enabling them to serve more patients or offer new services.