Hospital-physician group gain-sharing arrangement. An arrangement under which a hospital shares with several physician groups a portion of the hospital's cost savings attributable to the physicians' implementation of certain cost reduction measures will not result in the imposition of sanctions or civil monetary penalties. Although the arrangement does raise possible implications under the Social Security Act and the anti-kickback statute, the hospital has implemented safeguards to ensure compliance with federal regulations and reduce the risk of fraud and abuse. Under the arrangement, the hospital, an acute-care facility that offers a broad range of inpatient and outpatient services, entered into separate contracts with four cardiology groups and one radiology group. Collectively, those groups perform nearly all of the cardiac catheterization services at the hospital.
The hospital agreed to pay each group a share of cost savings arising directly from specific changes in that group's cardiac catheterization practices over two years. The cost-saving opportunities were identified by a program administrator after a study of the historical practices of the physician groups. The administrator's recommendations are largely aimed at standardizing the physicians' use of medical devices and supplies and curbing the inappropriate use or waste of devices and supplies. A number of safeguards reduce the risk of fraud or abuse within the arrangement, including: (1) a transparent process that clearly identifies and separates cost-saving actions and resulting savings; (2) credible support for the position that such cost-saving measures do not adversely affect patient care; (3) thresholds beyond which no savings accrue to the physician groups; (4) protections to ensure that individual physicians still have available the same selection of devices and supplies; and (5) written disclosures of the arrangement provided to patients. Based on the information provided about the arrangement, the OIG will not pursue sanctions or civil monetary penalties against any of the parties.
Source: OIG Advisory Opinion, No. 08-21, Nov. 25, 2008.
For more information on this and related topics, consult the CCH® Medicare and Medicaid Guide.
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