Physician-owned hospitals latest to sue gov't over healthcare reform

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Physician Hospitals of America (PHA) and Texas Spine & Joint Hospital (TSJH) have jointly filed suit in U.S. Federal Court, Eastern District of Texas, challenging the constitutionality of Section 6001 of the healthcare reform bill, which prohibits physician-owned Medicare hospitals from expanding after March 23, and bans any new physician-owned Medicare hospitals that are not certified as Medicare providers by Dec. 31.

Section 6001 of the Patient Protection and Affordable Care Act applies only to hospitals owned by physicians, not impacting any other type of hospital, according to PHA and TSJH. “Section 6001 is retroactive, arbitrary, vague, contradictory, and fails to provide due process and equal protection,” the organizations claimed.

The lawsuit states that plaintiffs are seeking declaratory and injunctive relief for the violations by the U.S. government, of which HHS Secretary Kathleen Sebelius is named, of the Fifth Amendment of the U.S. Constitution. PHA and TSJH are requesting the right to challenge the Physician Hospital Law in PPACA, and to be protected from it during the court proceedings through a preliminary injunction.
A permanent injunction against the law would resolve the case for the plaintiffs.

Accompanying the lawsuit is a motion for a preliminary injunction that would allow TSJH to proceed with plans to expand its facility, which has already won local zoning approval for an additional 20 Medicare beds.

According to the lawsuit, TSJH is a licensed acute-care hospital with 20 beds in Tyler, Texas, providing inpatient and outpatient surgery as well as inpatient medical services.

Across the U.S., there are approximately 265 physician-owned hospitals in 34 states. PHA said that physician-owned hospitals currently employ more than 75,000 full- and part-time employees and have an average annual payroll of $13 million per hospital.

Of the approximately 265 existing physician-owned hospitals, 29 are scheduled to open and receive their Medicare certification by Dec.31, PHA said. An additional 45 hospitals are currently under development and are not expected to be open or Medicare-certified by Dec. 31. Furthermore, PHA reported that there are 39 hospitals, previously under development, which are currently not continuing the development process due to Section 6001.