David Matyas, a Member of the Firm in the Health Care and Life Sciences practice in the Washington, D.C., office, was featured in an article about how PPACA tightened Stark Law exceptions for new and existing hospitals.

The article discussed how the Patient Protection and Affordable Care Act (PPACA, Pub. L. No. 111-148) restricts physician self-referral exceptions for new physician-owned hospitals, as well as exceptions for existing facilities looking to expand.

Matyas stated that physician-owned hospitals that have yet to open can be grandfathered into a physician self-referral, or Stark law, exception. To qualify, they must have an effective Medicare provider agreement as of Dec. 31, 2010, the date set under PPACA. Physician-owned hospitals that do not meet the deadline will not be eligible for the exception.

According to Matyas, existing physician-owned hospitals also face new restrictions on their ability to qualify for exceptions. Under PPACA, a facility looking to expand can only qualify for Stark law exceptions under limited circumstances. For example, if a hospital had a higher percentage of Medicaid admissions than any other hospital in its county for the most recent three-year period, it could qualify for an expansion.

In the article, Matyas also spoke about two other provisions in PPACA that affect hospitals, namely the power of the HHS secretary to suspend Medicare payments and the new Medicaid exclusion requirements. Under PPACA, if the secretary determines there is a credible allegation of fraud, all Medicare payments to a facility can be suspended pending an investigation. Currently, there is no definition of what constitutes a credible allegation.

Under the new Medicaid exclusion requirements, Matyas said, states are required to exclude any individual or entity from the program if they own, control, or manage an entity that has not returned overpayments, has been suspended or excluded from Medicaid, or has been affiliated with an individual or entity that has been suspended or excluded from Medicaid.

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