The Office of the Inspector General of the Department of Health and Human Services has issued an advisory opinion on a specific hospital’s proposed gainsharing arrangement under which cardiac surgeons will share 50% of the hospital’s savings for one year. Substantial savings are expected to result from 24 “cost-saving opportunities” involving the surgeons eliminating medical supply waste and substituting less costly supplies during cardiac surgery. The hospital was concerned that the arrangement may run afoul of the Social Security Act, which prohibits providers from limiting Medicare or Medicaid services, and the anti-kickback statute.
The OIG concluded that the hospital’s arrangement with the surgeons is an “improper payment” under the act and it would potentially violate the anti-kickback statute, but the OIG said it would not impose sanctions on the hospital because of the safeguards in place to protect patients from an inappropriate reduction of services. The OIG noted that several characteristics of the cost-saving plan limited the potential for abuse, such as its transparency, medical evidence that the proposed cost savings will not negatively affect patient care, the surgeons being allowed to use the same cardiac devices as they did previously, and baseline thresholds on the gainsharing. Regarding the arrangement’s potential to induce illegal referrals, the OIG said the risk was slight because only surgeons already on the medical staff would be allowed to participate in the arrangement and, then, only the cardiac surgeons. The OIG reiterated its concern that hospitals and physicians sharing cost savings “pose a high risk of fraud or abuse” if the arrangement “cannot be adequately and accurately measured for quality of care,” such as an arrangement that “rewards physicians based on overall cost savings without accountability for specific cost reduction measures. Moreover, arrangements structured so as to pose a heightened potential for patient steering and unfair competition would be considered suspect.”
