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Pallone, Neal Oppose CMS Proposal to Weaken Rules Limiting the Expansion of Physician Owned Hospitals

Today, Energy and Commerce Committee Chairman Frank Pallone, Jr. (D-NJ) and House Ways and Means Committee Chairman Richard E. Neal (D-MA) expressed their strong concerns with the Centers for Medicare & Medicaid Services’ (CMS) proposal to modify the regulatory framework that currently limits the expansion of Physician Owned Hospitals (POHs) in a letter to CMS Administrator Seema Verma. CMS proposed this change earlier this summer, and the Chairs urged Administrator Verma to exclude the proposal in the final rule.

“As you know, Congress placed a moratorium on the expansion of POHs as a result of concerns with these facilities cherry-picking patients, self-referring, increasing costs and utilization, and adversely affecting quality of care,” Pallone and Neal explained. “Such concerns have previously been highlighted by the Medicare Payment Advisory Commission (MedPAC) and the Office of the Inspector General (OIG).”

In the letter, the Chairs highlighted how CMS has no justified reason for making this change and that the agency’s analysis of which facilities are affected is misleading. The Chairmen also raised concerns regarding CMS’s proposal to skip community input on expansion—a move that undermines Congressional intent and prevents necessary voices from weighing in on the process.

“Simply put, CMS’s proposal to allow POHs to expand without guardrails is detrimental to the health of the very communities they serve, and contrary to Congressional intent,” the Chairs emphasized. “We urge you to reconsider this ill-advised proposal.”

The full text of the letter to Administrator Verma is available HERE.

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