What’s the news: The AMA and others are supporting a proposal this week from House Republican leadership to address the statutory and regulatory barriers that stop new physician-owned hospitals from opening or existing ones from expanding.
“Health care access is at a crisis point,” says the sign-on letter of support (PDF), organized by the American Academy of Orthopaedic Surgeons and co-signed by numerous organizations representing physicians, payers and patients.
In too many rural areas, the local emergency medical services “agency is the only remaining health care provider. Nearly 700 rural hospitals are at risk of closure due to severe financial pressures, which places millions of Americans in health care deserts without timely access to care. For many, this means traveling long distances and enduring significant delays to receive even the most basic medical treatment.”
Why it’s important: When the Affordable Care Act (ACA) passed in 2010, it included provisions that effectively banned existing physician-owned hospitals from expanding and blocked new ones from opening after hospital and trade groups lobbied for the restrictions.
In 2022, regulatory changes reversed an effort to ease restrictions on physician-owned hospitals serving Medicaid patients and made the circumstances under which expansion is allowed even narrower than the ACA provisions.
The AMA has lobbied for eliminating restrictions for the past 15 years. Physicians have faced declining physician payment rates and heavy regulatory burdens, which has left independent physician practices at a competitive disadvantage.
Studies show that critics’ argument that physician-owned hospitals “cherry pick” healthier or more profitable patients has been disproven, including in a 2005 Centers for Medicare & Medicaid Services study that examined referral patterns and found no consistent differences between physician owners and their peers. That study concluded that there was no evidence that “referrals were driven primarily based on incentives for financial gain.”
Physician-owned “hospitals have a proven track record of delivering high-quality care at lower costs, while maintaining a patient-centered approach,” says the letter, sent to House Speaker Mike Johnson and Majority Leader Steve Scalise—both of Louisiana—and House Majority Whip Tom Emmer of Minnesota.
“Research consistently shows these hospitals achieve better clinical outcomes, heightened efficiency, and significant savings for programs like Medicare,” the letter adds. “Furthermore, empowering physician leadership in rural health care provision will help reduce consolidation that too often limits access and drives higher costs for rural residents.”
In addition, allowing physician-owned hospitals would support new alternative payment and delivery models to be developed.
Learn more: In November, the AMA led a sign-on letter (PDF) with that drew 90 cosigners and urged the House to pass the bipartisan Patient Access to Higher Quality Health Care Act of 2025, H.R. 4002. In the spring, lawmakers introduced bipartisan legislation with a narrower approach that would create exemptions that would allow physicians to own rural hospitals in certain cases.
AMA policy supports repealing the ban on physician-owned hospitals as one way to promote competition and choice. The AMA also advocates removing restrictions on physicians’ owning, constructing or expanding any hospital facility.
