New Lawsuit Challenges Medicare Hospital Rule Within Health Overhaul
In a lawsuit set to begin Wednesday, Physician Hospitals of America and the physician-owned Texas Spine and Joint Hospital are suing HHS Secretary Kathleen Sebelius over a provision in the federal health reform law that prevents physician-owned hospitals from expanding or participating in Medicare, the Austin American-Statesman reports (Eaton, Austin American-Statesman, 9/28).
The provision prohibits the expansion of existing hospitals or the creation of new ones that are not Medicare certified by Dec. 31 (Haberkorn/Kliff, "Pulse," Politico, 9/29).
The plaintiffs argue that the overhaul is exclusionary and unconstitutional and that it unfairly eliminates competition for hospitals not owned by physicians. They also argue that it will limit patient choice and increase costs.
In addition, the plaintiffs characterize the health reform law as "retroactive, arbitrary, vague, contradictory and [in violation of] due process and equal protection," according to a news release.
The plaintiffs are seeking a permanent injunction that would preclude the government from enforcing the law.
Mike Russell, a physician-owner of Texas Spine and Joint Hospital, said the hospital had been planning an expansion until the overhaul passed.
The hearing is expected to focus on two motions by the federal government in response to the challenge:
- A motion to dismiss the case; and
- Another for a summary judgment.
In its motion for summary judgment, the federal government said the challenge is without merit and should be dismissed. It also said the plaintiffs did not exhaust all necessary administrative channels before filing suit (Austin American-Statesman, 9/28).
Oral arguments are scheduled for 2 p.m., after which the judge will determine whether the suit will proceed ("Pulse," Politico, 9/29).