You are correct about self referrals. However, many physician owned hospitals have luxury suites with real beds, gourmet meals and attentive nurses. They build a reputation for such care and there is no need for self referral when everyone in town wants to have that type of care. They do not scrimp on nursing care either. The largest hospital in our town has been plagued with infections and cut backs in nurses as well as support staff. They also cut the air conditioning in the summer months where we typically see temperatures in the 100 degree marks for weeks on end. Who wants to lay on a plastic mattress during that time??
The hospital ownership provisions of the Stark Law, 42 USC 1395nn(d)(3) weren't included because of an issue with physician-owned hospitals with luxury suites. They were initially meant to combat the growing number of hospitals who were selling subdivisions within the hospital to physicians or physician groups with the intent of locking in their referrals.
Note I've never said I'm defending the Stark Law.