The Secretary of Health and Human Services, Michael O. Leavitt, has submitted an interim report to Congress entitled “Development of a Strategic Plan Regarding Physician Investment and Specialty Hospitals,” as required by Deficit Reduction Act of 2005 (DRA). HHS was required to develop and implement a strategic plan concerning whether physician investments in specialty hospitals should continue to be permitted, especially in light of the recently alleged quality of care concerns.

The interim report addresses several issues critical to the process of providing equitable reimbursement to hospitals and specialty hospitals as follows:

1.Addressing hospital DRG payments to adequately reflect severity of illnesses;

2.Increasing the number of procedures that can be performed in ambulatory surgery centers, but adjusting ambulatory surgery centers fees to adequately reflect relative complexity or severity for cases done in both ambulatory surgery centers and the hospitals;

3.Determining whether specialty hospitals are required to provide EMTALA services for cases falling within their specialty; and

4.Obtaining further data regarding physician investment and use of specialty hospitals.

This report is available on the CMS website and at Interim Report.