As an advocate for expanded patient access to high-quality care, the American Association of Orthopaedic Surgeons (AAOS) is voicing its support for proposed federal legislation that would improve healthcare access in rural areas through expanded physician-led hospitals.

First submitted in the 118th Congress, the Physician Led and Rural Access to Quality Care Act (H.R. 2191)—introduced by U.S. Reps. Morgan Griffith (R-VA), Kevin Hern (R-OK), Vicente Gonzalez (D-TX) and Lou Correa (D-CA)—would amend an Affordable Care Act ban on physician-owned hospital expansion. Ending the ban would allow physicians to provide care to Medicare and Medicaid patients in rural communities.

“Rural hospitals provide essential healthcare services to millions of Americans, but they continue to face immense financial pressures and workforce shortages that threaten their viability,” AAOS Advocacy Council Chair Adam Bruggeman, M.D., wrote in a letter to politicians. “On average, rural hospitals operate on margins half that of urban hospitals, and over 130 rural hospitals have closed since 2010. The law limits who can own hospitals, which artificially limits options as to the type of entity that can rescue a hospital on the cusp of closure. Lifting the physician ownership ban would allow physician-led hospitals to provide care in these underserved rural communities.”

In his letter, Bruggeman outlined the benefits of removing the ban on physician-owned hospitals: ensuring millions of rural Americans have access to healthcare services; limiting consolidation; addressing concerns about monopolies (which could potentially increase costs); and potentially saving rural hospitals in danger of closing.

According to American Medical Association, the number of physician-led hospitals grew from fewer than 70 in the early 2000s to approximately 250 by 2010, driven by the demand for general acute care facilities in certain markets and the benefits of facility specialization in enhancing clinical operations and surgical procedures.

However, that growth ended in 2010 with the Affordable Care Act’s (ACA) passage. The ACA includes a provision that effectively bars existing physician-led hospitals from expanding and prohibits new entities from being established. H.R. 2191 proposes changes that would allow physicians to open new hospitals in rural areas provided they are more than 35 miles away from an existing hospital or critical access facility and permit grandfathered physician-led hospitals to expand.

The American Hospital Association (AHA) opposes H.R. 2191, claiming the proposal would “skew” the healthcare market in favor of physicians who self-refer patients to hospitals they own. The organization called the legislation “misguided” and contended it would destabilize ruralhealth care while failing to improve access to quality care.

“H.R. 2191 would result in additional gaming of the Medicare program, jeopardize patient access to emergency care, potentially harm sicker and lower-income patients, and severely damage the ability of 24/7 full-service community hospitals to provide care in rural areas,” Lisa Kidder Hrobsky, AHA
senior vice president, Advocacy and Political Affairs, wrote in a letter to Griffith.

AAOS previously joined a coalition of 86 medical organizations in urging Congress to lift the ban on physician-led hospitals and pass H.R. 2191. The coalition letter illustrated the value of physician-led hospitals in providing higher-quality care at lower costs compared to other hospitals.

“AAOS was founded on the mission of providing the highest quality musculoskeletal care. For millions of rural Americans, physician-led hospitals are a critical piece of the puzzle,” AAOS President Annunziato Amendola, M.D., said. “Our members recognize the value of legislation like the Physician Led and Rural Access to Quality Care Act in bringing affordable, accessible care to underserved communities.”

“When physicians lead hospitals, patients win,” Dr. Bruggeman added. “Physician-led hospitals are a powerful solution to the consolidation plaguing our healthcare system. By lifting outdated restrictions on physician ownership, we can drive down costs, improve quality, and expand access to care, especially in underserved rural areas.”

The American Association of Orthopaedic Surgeons (AAOS) Office of Government Relations promotes and advocates the viewpoint of the orthopedic community before federal and state legislative, regulatory and executive agencies. Based in Washington, D.C., with additional staff in the AAOS’ headquarters in Rosemont, Ill., the Office of Government Relations identifies, analyzes, and directs all health policy activities and initiatives to position the AAOS as the leaders in advancing musculoskeletal health.