Response to the Opposition by the American Hospital Association and the Federation of American Hospitals DHR Health’s High Medicaid Facility Application for Expansion

Washington, DC – March 23, 2022 – Physician-Led Healthcare for America (PHA) was disappointed to learn that two Washington, DC, trade associations expressed opposition to the high Medicaid facility application for expansion filed by DHR Health in Edinburg, Texas. DHR Health serves as one of the community safety-net hospitals in the Rio Grande Valley that provides care to four counties that are classified as both Medically Underserved Areas and Health Professional Shortage Areas.

PHA strongly rejects the anti-patient arguments put forward by the American Hospital Association (AHA) and Federation of American Hospitals (FAH) in their opposition to the valid request by DHR Health to enable it to expand services to Medicaid patients in the Rio Grande Valley. For years, the AHA and FAH falsely accused physician-led hospitals of “cherry picking” patients, and they used this false pretense to oppose expansion efforts by physician-led hospitals. Now, in an example of twisted logic, the AHA and FAH are opposing a request for a high Medicaid facility expansion exception by DHR Health, a physician-owned hospital that meets the statutory criteria for the exception and has the highest Medicaid admissions of any hospital in its county.

“At the heart of the FAH and AHA opposition to DHR’s application is a thinly veiled desire to restrict competition by physician-led hospitals. DHR Health is a community hospital that has demonstrated strong service to Medicaid and Medicare patients with high-quality, low-cost healthcare.  In addition, DHR Health demonstrated the critical role that it plays in the Rio Grande Valley as a community hospital through its heroic efforts during the height of the Covid-19 surge in the Rio Grande Valley,” said Frederic Liss, MD, PHA President.  

Following New York City’s pandemic surge in the spring of 2020, the Rio Grande Valley was the epicenter of the nation’s next surge in the summer of 2020. To ensure sufficient capacity to meet surging demand, DHR Health spared no expense or effort.  In all, DHR Health added 300 beds dedicated for COVID-19 care, established a freestanding COVID-19 emergency department, led a regional coalition of county health departments, physicians and hospitals to collect and distribute COVID-19 best practices and therapeutics, and was designated by the State of Texas as a vaccine HUB. The vaccine HUB has administered 300,000 vaccinations to date.  

In the spring of 2020, DHR Health had just built and received accreditation from The Joint Commission for a hospice unit when the pandemic crisis surged.  DHR Health urgently applied for a state waiver to convert the hospice beds into a dedicated Covid-19 unit, which treated both intubated patients and patients in respiratory distress. The health system also converted its freestanding rehabilitation hospital into a COVID-19 unit and built two additional back-up facilities. These actions demonstrate both DHR Health’s commitment to the local community and its extraordinary credibility as an acute care hospital that serves the greater good of the healthcare system in its community.   

The arguments made by the AHA and FAH to reject DHR Health’s high Medicaid application run counter to DHR Health’s work since its founding.  FAH’s Chip Kahn stated: “There’s no way that this hospital, which shows no intent to serve Medicaid, specifically, meets the spirit of the law.” However, these allegations are the opposite of reality. DHR Health is a safety-net hospital that serves thousands of Medicaid patients a year and features the highest Medicaid admissions of any hospital in Hidalgo County on a regular basis.  

DHR Health also clearly meets the statutory requirements to qualify as a high Medicaid facility, including having the highest Medicaid patient admissions of any other hospital in Hidalgo County for the three most recent years.  In 2021, DHR Health had 94,000 Medicaid patient visits, which accounted for 44 percent of all inpatient visits (by discharge). Of the 7,700 babies birthed in 2021, 71 percent were Medicaid beneficiaries. In addition, in 2021 alone, DHR Health provided over $70 million in charity care to its community.

DHR Health not only serves as a community safety-net hospital, but it also increases competition and provides the most comprehensive and advanced healthcare services available in the Rio Grande Valley.  Both the Biden and Trump administrations targeted healthcare consolidation as one of the most troubling trends in healthcare to address, and it is critical to ensure that each healthcare market features a healthy balance of hospital systems. Federal regulators should follow the law and ensure that a hospital is not hampered in its efforts to provide care to its community.

While PHA continues to vigorously oppose and seeks to reverse the underlying prohibition on physician-led hospitals, we are committed to preserving the high Medicaid facility expansion exception in the interim to help preserve access to care and provider choice for patients.  In 2020, the Centers for Medicare & Medicaid Services (CMS) rightly amended the regulations surrounding high Medicaid facilities to bring them in line with the statutory text and Congressional intent. CMS should not now reverse these important changes.   

DHR Health’s high Medicaid expansion request represents an opportunity to both support access to high quality hospital services for Medicaid beneficiaries – who are often among the nation’s most vulnerable populations – and to ensure that a community has a healthy balance of hospital system choices in a market.

About Physician-Led Healthcare for America
Founded in 2001, Physician-Led Healthcare for America serves as the stakeholder voice for physician-led hospitals and other physician-led entities that focus on the patient-physician relationship.

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