Additionally, he says, even if the exception were granted to Doctors Hospital in Hidalgo County, the Brownsville hospital is unlikely to meet the high Medicaid facility requirements in Cameron County, as other hospitals there have a higher percentage of Medicaid discharges than Doctors Hospital’s main campus and are relatively moderate volume hospitals.

Roberto Haddad, Doctors Hospital's vice president and counsel for government affairs and policy, says the hospital would continue to meet the needs of the community with a high Medicaid facility exception. "We are not a corporate hospital model with statewide expansion plans. DHR Health is applying for a high Medicaid facility expansion exception to increase the overall capacity allowed under the law so that we may continue serving our community now and into the future," he said in an email to Modern Healthcare.

While he has not disclosed if any of the new beds and rooms were intended for the Brownsville facility, he has the backing of local lawmakers and Rep. Henry Cuellar (D-TX), who has submitted letters of support to CMS for DHR’s request.

Kahn says he is confident that the Biden administration will reverse Trump’s decision in the future. "I know the current administration feels very strongly about this Stark Law, and so I think we can hope that they'll choose to roll this back," he said.

Bill Horton, a partner at Jones Walker who co-chairs its healthcare industry team, says CMS will likely deny the request without reversing the entire policy change. "This exception is really, I think, intended to be a fairly narrow exception to a deal with circumstances where there is a sort of demonstrable community in the Medicaid lower income population. It sort of seems to me that that's a stretch to say, well, let's go an hour's drive away from here and include that.”

The waiver for the Brownsville facility is under review, according to the Texas Health and Human Services Commission.

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