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Physician-Owned Hospitals

Section 6001 of the Affordable Care Act of 2010 amended section 1877 of the Social Security Act to impose additional requirements for physician-owned hospitals to qualify for the whole hospital and rural provider exceptions. A physician-owned hospital is now generally prohibited from expanding facility capacity. However, a physician-owned hospital that qualifies as an applicable hospital or high Medicaid facility may request an exception to the prohibition from the Secretary.

For further information about the process and its requirements, see the links below. After reviewing the material below, if you have additional questions, please send an email to Requests for exceptions should not be sent to this address, but may be emailed to the address below.

Hospitals requesting an exception in accordance with the statutory requirements may submit an exception request either electronically to or by mailing an original and one copy of its request to:

Centers for Medicare and Medicaid Services
7500 Security Boulevard
Mailstop C4-25-02, ATTN: Physician-Owned Hospital Exceptions
Baltimore, MD 21244-1850

If a hospital submits its request electronically, the hospital must also submit an original hard copy of the required certification.

Important Updates:


CMS has received numerous inquiries regarding the annual reporting requirement in 42 CFR 362(b)(3)(i). CMS has concerns regarding the quality of the data collected in the first annual report and we are examining the report in more detail prior to publication.  Accordingly, collection and publication of the second annual report will be delayed until further notice. Please stay tuned to our website as well as the normal CMS communication channels for notifications related to this issue.

The CY 2015 OPPS/ASC final rule with comment period was published on November 10, 2014. Changes to the Rural Provider and Hospital Ownership Exceptions to the Physician Self-Referral Law: Expansion Exception Process can be found at:

Lake Pointe Medical Center (Rowlett, TX) submitted the following exception request:  The corresponding decision notice has been published in the Federal Register and may be found at: