Several physician-owned specialty hospitals in the states of four Senate Appropriations Committee Democrats would benefit from an amendment to a supplemental war appropriations bill (HR 2642) that would allow the facilities to continue participating in Medicare and Medicaid, CQ Today reports.

The legislation originally would have banned participation in Medicare by many current or planned specialty hospitals or required physicians with ownership stakes in the facilities to sell some of their shares. Under the amendment, which the committee approved during a May 15 mark up as part of a manager's amendment proposed by Chair Robert Byrd (D-W.Va.), several specialty hospitals "would be grandfathered in under more generous terms and allowed to keep expanding," according to CQ Today.

The bill originally would have saved $1.6 billion over 10 years, but the amendment would reduce that amount by $300 million, in large part because of increased Medicare and Medicaid payments. The amendment, requested by Sens. Patty Murray (Wash.), Herb Kohl (Wis.), Tom Harkin (Iowa) and Ben Nelson (Neb.), would benefit specialty hospitals in their states (Armstrong, CQ Today, 5/16).

Pallone Supports Restrictions on New Specialty Hospitals
In related news, House Energy and Commerce Health Subcommittee Chair Frank Pallone (D-N.J.) last week expressed support for restrictions on new specialty hospitals to finance a provision in the supplemental war appropriations bill that would delay seven proposed Medicaid regulations for one year, CongressDaily reports. Both the House and Senate versions of the legislation include the Medicaid provision, but they would use different mechanisms to finance the measure. According to CongressDaily, the Senate "banned new physician-owned specialty hospitals from participating in Medicare, while the House relied in part on a physician-assistance fund."

Pallone said that a ban on the participation of new specialty hospitals in Medicare "is something that needs to be done" (Edney, CongressDaily, 5/16).