SIOUX FALLS, SD – About 75 of the 127 physician-owned hospitals under construction won't meet an Aug. 1, 2010 deadline on expansion requirements in the revised Senate health reform bill, according to an informal count by Physician Hospitals of America.

The current Senate bill prohibits physician-owned hospitals from adding beds, ORs or procedure rooms, and the same language exists in the House bill. Both bills state that physician-owned hospitals must meet four specific requirements to expand.

PHA officials say no physician-owned hospital meet all four criteria.

Even with a six-month extension past the original deadline of Feb. 1, 2010, PHA Executive Director Molly Sandvig said winter weather will hamper construction in northern states. In addition, she said, all projects would have to be Medicare-certified by the deadline.

Sandvig said the PHA would continue to lobby for changes in the next step of the bill-making process.

PHA officials want to move the deadline to Jan. 1, 2014, and soften the growth restrictions on existing physician- owned hospitals.

If the language isn't changed, Sandvig said physician-owned projects that can't meet the deadline – as well as existing hospitals that want to grow – would have five to seven alternatives, most of which involve restructuring ownership and ceding some control to non-physicians.

"None of these (alternatives) are very pretty," she said.

One option would allow physicians to own the building and land but not the hospital, allowing them to operate under a management agreement. Another would mean switching to a non-profit foundation somewhat like the Mayo Clinic.

In both instances, Sandvig said, there would be some loss of control as well as reduced income.