Montana specialty hospital fight goes to state's high court

With the end of the federal moratorium on physician-owned specialty hospitals, doctors anticipate the debate to move to the state level.

By Amy Lynn Sorrel, AMNews staff. Oct. 9, 2006.

The federal moratorium on physician-owned specialty hospitals may have expired, but a group of Montana doctors is fighting a legal battle against a community hospital over a state law that continues to ban the licensing of specialty facilities until July 2007.

The case before the state Supreme Court will decide whether Great Falls Clinic, a multispecialty and primary care practice, violated the state prohibition when it partnered with Essentia Health, a multistate health care system, to purchase Central Montana Surgical Hospital in March.

The facility was designated as an ambulatory surgery center in 1999, long before the state Legislature voted last year to extend the Montana moratorium once the federal ban first lapsed in June 2005, court documents show.

The state statute, which applies to physician- and nonphysician-owned specialty hospitals, included an exception for facilities that already were in existence, which included Central Montana Surgical Hospital.

Doctors say that they bought the surgery center, now renamed Central Montana Hospital, to offer patients more choice in an area where Benefis Healthcare is the only community hospital.

Benefis is a "very strong monopoly hospital that has made a conscious decision to exclude physicians from having input on how patients are cared for," said Steve Akre, MD, chief medical officer at Great Falls Clinic.

The doctors' group says it is operating Central Montana Hospital as a general hospital under its license granted by the Montana Dept. of Public Health and Human Services.