Pillar 05

Physician-Owned Hospital Ban

Section 6001 of the ACA · FAH-Authored · 16 Years in Effect

Critical
16 Years Section 6001 has been in effect
7 Consecutive Congresses where repeal failed
$0 Cost savings from POH ban per independent federal agency recommendation
2010 Year FAH engineered the ban into the ACA
01 THE ADMISSION

The Admission

FAH’s own president admitted the organization personally engineered the physician-owned hospital ban in the ACA.

“The current ban on physician-owned hospitals wouldn’t be there if it wasn’t for the Federation. I don’t think I’ve ever admitted this publicly, but I can remember emailing one of the staffers, literally sending in talking points to some of the senators as the process was taking place.”

— Chip Kahn, President and CEO, Federation of American Hospitals, Advisory Board interview, June 2021
02 THE LAW

What Section 6001 Does

Section 6001 of the ACA effectively banned new physician-owned hospitals from participating in Medicare after March 23, 2010.

Provision Effect
New POH Medicare ban No new physician-owned hospitals may participate in Medicare after March 23, 2010
Capacity freeze Existing POHs frozen at March 23, 2010 licensed bed, OR, and procedure room counts
Ownership cap Physician ownership percentages capped at 2010 levels
Exceptions Limited exceptions for “applicable hospitals” and “high Medicaid facilities”
03 LEGISLATIVE HISTORY

How the Ban Was Engineered

Year Event
2003 FAH and AHA lobbied for initial 18-month POH expansion moratorium in Medicare Modernization Act — first legislative victory
2003–2010 Congress commissioned studies from MedPAC, GAO, and HHS OIG. Neither MedPAC nor HHS recommended eliminating the whole hospital exception. MedPAC stated POHs “may be an important competitive force.”
2006 Kahn personally authored Health Affairs article “Intolerable Risk, Irreparable Harm: The Legacy of Physician-Owned Specialty Hospitals”
2009–2010 Hospital industry support became a condition of ACA passage. Sen. Max Baucus (D-MT, Senate Finance Chair) and Sen. Chuck Grassley (R-IA) championed the provision. Kahn was “emailing staffers” and “sending talking points to senators.”
March 23, 2010 Permanent ban enacted. No independent federal agency had recommended it.
04 REPEAL BILLS

Every Repeal Bill (2011–Present)

No bill to repeal or modify Section 6001 has ever passed committee, received a dedicated hearing, or advanced to a floor vote in either chamber.

Congress Bill Chamber Sponsor Status
114th (2015–16) H.R. 976 House Rep. Sam Johnson (R-TX) Referred to committee; no action
115th (2017–18) H.R. 1156 House Rep. Sam Johnson (R-TX) Referred to committee; no action
115th (2017–18) S. 1113 Senate Senate companion Referred to Finance; no action
116th (2019–20) H.R. 3062 House Rep. Burgess (R-TX), Rep. Cuellar (D-TX) Referred to committee; no action
116th (2019–20) S. 2860 Senate Senate companion Referred to Finance; no action
117th (2021–22) H.R. 1330 House Rep. Burgess (R-TX), Rep. Cuellar (D-TX) Referred to committee; no action
117th (2021–22) S. 4130 Senate Sen. Lankford (R-OK) Referred to Finance; no action
118th (2023–24) H.R. 977 House Rep. Burgess (R-TX), Rep. Cuellar (D-TX) Referred to committee; no action
118th (2023–24) S. 470 Senate Sen. Lankford (R-OK) + 12 cosponsors Referred to Finance; no action
119th (2025–26) H.R. 4002 House Rep. Van Duyne (R-TX-24), Rep. Cuellar (D-TX-28) Referred to E&C + W&M; pending
119th (2025–26) H.R. 2191 House Rep. Griffith (R-VA-9), 31 cosponsors Referred to committee; pending
119th (2025–26) S. 1390 Senate Sen. Lankford (R-OK) + 8 cosponsors Referred to Finance; pending
05 OPPOSITION LETTERS

FAH Opposition Letters

Date Bill / Subject Joint With
Feb 24, 2017H.R. 1156AHA
June 1, 2017S. 1113AHA
Jan 11, 2019General oppositionAHA
March 11, 2022DHR Health expansion (to CMS)AHA
Sept 28, 2022H.R. 1330 / S. 4130AHA
March 29, 2023H.R. 977 / S. 470AHA
March 27, 2025General oppositionFAH solo
May 1, 2025Restoring Rights of Physicians ActFAH solo
July 17, 2025H.R. 4002FAH solo
06 EVIDENCE

The Evidence FAH Does Not Cite

Independent peer-reviewed research contradicts FAH’s core claims about physician-owned hospitals.

FAH Claims

  • POHs cherry-pick healthiest patients
  • POHs increase Medicare costs
  • POHs harm community hospitals
  • CBO scored the ban as deficit-reducing

Independent Research

  • 2015 Harvard study (British Medical Journal) found POHs had comparable Medicaid patient shares to tax-exempt hospitals
  • 2023 JAMA Network Open found charges at POHs for 8 common procedures were one-third lower than traditional hospitals in same markets
  • MedPAC stated POHs “may be an important competitive force” — no recommendation to eliminate the whole hospital exception
  • The $500M CBO score reflected reduced Medicare utilization — not evidence of lower costs to patients or the healthcare system
FAH-commissioned research note: FAH and AHA have commissioned at least three studies from Dobson DaVanzo and Associates, a Washington-area health economics consulting firm. These are industry-funded consulting reports, not peer-reviewed academic research. The most recent (November 2025) modeled the impact of hypothetical POH openings near rural sole community hospitals and was published in direct response to H.R. 2191 / S. 1390.
07 THREAT ASSESSMENT

Current Threat Assessment

H.R. 4002 and H.R. 2191 / S. 1390 represent the most serious legislative threat to Section 6001 in 16 years.

On March 18, 2026, the House Energy and Commerce Health Subcommittee held a hearing titled “Lowering Health Care Costs for All Americans.” Chairman Morgan Griffith (R-VA), sponsor of H.R. 2191, explicitly criticized POH restrictions in his opening statement. Rep. Mariannette Miller-Meeks (R-IA) criticized the ACA for enabling consolidation.

Bill GovTrack Prognosis Key Support
H.R. 4002 17% committee passage; 5% enactment AMA, Americans for Prosperity, LIBRE Initiative, 90+ medical associations
H.R. 2191 / S. 1390 Pending 31 House cosponsors (25R, 6D); 9 Senate cosponsors

Sources