With the June 9 deadline approaching, healthcare providers, patient advocates, and industry groups are being asked to weigh in on the future role of physician-owned hospitals in Medicare.
For the first time, federal health regulators are formally seeking public input on whether physician-led hospitals should be given greater opportunities to participate in Medicare payment models and expand their role within the U.S. healthcare system.
The Centers for Medicare & Medicaid Services (CMS) has opened a public comment period as part of its Fiscal Year 2027 Inpatient Prospective Payment System (IPPS) proposed rule. The agency is inviting feedback on whether physician-owned hospitals (POHs) should be allowed to voluntarily participate in the Transforming Episode Accountability Model (TEAM), a value-based care initiative aimed at improving outcomes while reducing costs.
The comment period closes on June 9, 2026, and healthcare organizations, physicians, medical societies, and patient advocates are being encouraged to share their perspectives.
Supporters view the move as an opportunity to revisit restrictions that have limited the growth of physician-owned hospitals for more than a decade.
Carlos J. Cardenas, MD, president of Physician-Led Healthcare for America, described CMS’s request for information as a significant shift in the federal government’s approach to physician-led care.
“The landmark moment is the fact that for the first time, it appears that CMS is not asking whether physician-led hospitals should be included, but rather, how do we include them in the delivery of care and in how we can better serve our patients,” Cardenas said.
Cardenas also argued that physician-led hospitals have consistently demonstrated strong results for patients.
“Physician-led hospitals deliver higher quality, greater efficiency, and better patient satisfaction. And yet, patients today still have limited access to these models of care. That needs to change,” he said.
Under the proposal, CMS is seeking input on a range of questions, including which physician-owned hospitals should qualify for participation, whether regulatory waivers would be necessary, what safeguards should be implemented to protect patient choice, and how compliance should be managed once participation periods conclude.
Advocates argue that physician-led hospitals can help lower healthcare costs while maintaining high standards of care. Research examining physician leadership in healthcare organizations has found that physician-led hospitals often achieve higher quality ratings and stronger operational efficiency without sacrificing financial performance.
Cardenas described CMS’s request for information as a notable shift in policy discussions, saying physician-led providers are being invited into conversations about healthcare delivery models in a way not seen before. According to him, participation in programs such as TEAM would allow physicians to contribute directly to the design and evaluation of care models focused on improving outcomes and resource utilization.
Supporters also contend that expanding physician-led hospitals could help address concerns about consolidation in the healthcare sector. They argue that greater competition may provide patients with more choices while encouraging innovation in care delivery.
Studies have suggested that hospitals with strong physician leadership are associated with higher patient satisfaction and quality outcomes, while patient-centered care models can contribute to lower costs and improved efficiency.
The proposal has also drawn criticism from some healthcare organizations. Critics of physician-owned hospitals have raised concerns about patient selection, market competition, and the potential for overutilization of services. Not all healthcare organizations support expanding physician-owned hospitals. In a joint statement, Ashley Thompson, Senior Vice President for Public Policy Analysis and Development at the American Hospital Association (AHA), and Don May, Executive Vice President of the Federation of American Hospitals (FHA), argued that physician-owned hospitals face important limitations.
“Previous analysis has also shown that POHs report on fewer quality measures and have higher re-admission measure penalties,” they said. “Compared to full-service hospitals, POHs are limited in the scope of services offered, often specializing in one type of care, like cardiac or orthopedic surgery, and treating patient populations that are younger, more likely to be commercially insured, and present with less complex conditions.”
Thompson and May further noted that, unlike full-service community hospitals, physician-owned hospitals are not required to provide emergency care and often rely on nearby hospitals when patients require emergency services.
CMS is seeking stakeholder feedback on these issues as it evaluates potential future policy changes.
For advocates of physician-led care, the current consultation represents a rare opportunity to influence the future direction of Medicare policy.
With the public comment window nearing its close, healthcare professionals and patient groups are being encouraged to submit their views on whether physician-led hospitals should play a larger role in delivering care under federal healthcare programs.
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