Medical Community Advocates for Physician-Owned Hospitals

ACR® sent a letter of support for the Patient Access to Higher Quality Health Care Act of 2025 (H.R. 4002) with other medical associations to bill cosponsors U.S. Reps. Beth Van Duyne (R-TX) and Henry Cuellar (D-TX). This legislation would repeal the statutory restrictions on the whole hospital exception to the Stark physician self-referral law, thereby eliminating statutory and regulatory barriers that prevent the formation or expansion of physician-owned hospitals (POHs).

The Stark physician self-referral law generally prohibits physicians from referring patients to entities in which they (or an immediate family member) have a financial interest for certain designated health services, including hospital services, if those services are billed to Medicare or Medicaid unless certain exceptions are met. The whole hospital exception originally permitted physicians to refer patients to a hospital in which they had an ownership or investment interest, provided that the interest was in the entire hospital, not just a subdivision (e.g., a radiology department). Yet, passage of the ACA significantly modified the exception.

In addition to these barriers, regulatory changes made in 2022 reversed a prior effort to ease restrictions on POHs serving Medicaid populations — further narrowing the circumstances under which expansion is allowed.

Consolidation, along with increased market concentration among hospitals and health plans has left patients in many communities with few or no alternatives. POHs would enable patients to have more choices for healthcare services, spur innovation and improve care quality, while lowering costs.

For more information or if you have questions, contact Ashley Walton, ACR Government Affairs Director.