Specialty hospitals: a problem or a symptom?

The Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003 imposed a moratorium on new physician-owned specialty hospitals, which expired in June 2005. Recent administrative decisions have effectively extended the moratorium as it applies to Medicare payment, and the debate continues over whether specialty hospitals are good, bad, or indifferent. This paper reviews the findings in two congressionally mandated reports on specialty hospitals, the services they provide, and their impact on their patients and communities. These findings are used to highlight the major policy issues to be addressed-issues that go beyond whether specialty hospitals should be allowed.