Frequently Asked Questions

What is the implication of the Affordable Care Act’s Section 6001?

Section 6001 of 2010’s Affordable Care Act (ACA) grandfathered in all physician-led hospitals that are in place as of the date that the ACA was signed into law: March 23, 2010. Hospitals that were under development had until the end of 2021 to become operational and to have their grandfather status.

Are physician-owned hospitals allowed to expand under Section 6001?

The Affordable Care Act’s Section 6001 created a mechanism to allow physician-led hospitals to be granted an expansion if they meet certain criteria, such as serving as the largest Medicaid provider in the county. However, the criteria are so stringent that only a handful of physician-led hospitals have been granted the ability to expand.

Meanwhile, the Medicare program does not place expansion handcuffs on hospitals without physician ownership.

How can Congress use physician-led hospitals to reverse consolidation?

Three board members from three national medical societies argued in an April 12, 2021, piece in Health Affairs that Congress can use physician-led hospitals as a tool to counter the consolidation that is being experienced in numerous regions around the nation.

A review of the Health Care Cost Institute Hospital Concentration Index, which measured marketplace concentration in 182 metro areas across the nation, found that areas with physician-led hospitals have higher competition and lower market concentration. Only four percent of areas with physician-led hospitals were classified as very highly concentrated markets (compared to 13 percent without physician-led hospitals).

Click here to learn how physician-led hospitals can address consolidation.

In terms of quality and cost, what do the studies show about physician-led hospitals?

Opponents attempted to cite lower quality and higher costs as reasons to harm physician-led hospitals during the Affordable Care Act debate in 2010. However, countless studies have refuted the dubious claims.

Click here to read a 2021 systematic review of 21 studies related to the quality and cost of care delivery by physician-led hospitals to determine whether the opponents of physician-led hospitals were justified in their 2010 criticism. The authors concluded: “In the absence of evidence that POHs provide services of lower quality or higher cost, Medicare’s ban on new POH participation and expansion of preexisting POHs lacks justification.”

Many studies have found that physician-led hospitals provide outstanding quality and lower costs of care.

A September 2022 study by ndp | Analytics found that physician-led hospitals found that physician-led hospitals featured an average rating of 3.9 out of 5 (compared to 3.2 for all hospitals) in a Centers for Medicare and Medicaid Services survey on patient experience.

The same study found that 59 percent of physician-led hospitals were below the median costs per Medicare beneficiary, which was compared to 51 percent of all hospitals.