Medicare Compliance & Reimbursement

Texas 911 call could spell an emergency for specialty hospitals. The weather forecast for doctor-owned specialty hospitals just got a lot stormier, so now's the time to patch your roof.

Physicians owning single-specialty hospitals have been a recent source of controversy, and Medicare had a moratorium on new facilities for a couple of years. Now the death of a patient at West Texas Hospital in Abilene is drawing fresh scrutiny.

What happened: Truck driver Sam Spivey went into West Texas for spinal disc-fusion surgery, and went into respiratory arrest. The West Texas staff had to call 911, and an ambulance took Spivey to Abilene Regional Medical Center, where he died.

"It really seems to me that if you call a place a hospital, it should have the facilities to handle an emergency, but all this facility could do was call 911," Senate Finance Committee Chair Max Baucus (D-MT) told Associated Press.

Baucus and Grassley are asking the Centers for Medicare & Medicaid Services to look into the $4 million Medicare payments the facility received since 2005, when the moratorium was in place. But West Texas CEO Ron Rives claims the facility isn't a specialty hospital. He also says calling 911 was a "last resort" after the hospital did everything it could to save Spivey.

What to expect: Physician-owned specialty hospitals are "going to continue to be a very volatile issue," says attorney Mike Gier with Bricker & Eckler in Columbus, OH. The change in control over Congress will add to the scrutiny of these facilities, he adds.

Also, look for states to impose stricter requirements on these facilities, says attorney Greg Piche with Holland Hart in Denver. States may insist that specialty hospitals have emergency rooms and some backup capability. They may also require large signs clarifying that the facility is not a full-service hospital.

Facilities transfer patients all the time, notes attorney Robert Homchick with Davis Wright Tremaine in Seattle. The important thing is to perform the transfer in an appropriate and "patient-centered" fashion, depending on the patient's condition.

Freestanding hospitals may hate specialty hospitals, but they're generally willing to sign transfer agreements to take care of the patient when something goes wrong, adds attorney Jay Hardcastle with Boult Cummings in Nashville.

Your facility should already comply with Medicare conditions of participation (COPs) and state licensure requirements, says Homchick.

What to ask: Any physician who owns a stake in a specialty hospital should ask three things at the next shareholder meeting, says Hardcastle:

1) Is there one executive officer who's in charge of quality? If so, it should be that person's job to "make sure systems are in place and avoidable errors do not occur that are not the medical staff's fault," says Hardcastle.

2) Who's [...]