The Office of Inspector General (OIG) released a new and more liberal advisory opinion regarding gainsharing (the practice of sharing cost savings with physicians) this past January 5, 2018—the first new gainsharing opinion since 2015.
What a difference three years make.
For starters, the Medicare Access and CHIP Reauthorization ACT (known as MACRA) was passed—which said that gainsharing was not part of the older Civil Monetary Penalty laws.
And now, the OIG has issued an interpretation of the MACRA rules (Advisory Opinion 17-09 – January 5, 2018) and says that it is now ‘OK’ for physicians to be paid for cutting costs as part of an overall gainsharing program.
Quick, What Is Gainsharing?
“Gainsharing” is a way to pay doctors for cutting costs while still maintaining or improving quality of care. It is supposed to align the economic and patient care interests of hospitals and physicians.
Historically, the OIG has warned physicians and hospitals away from gainsharing. The dozen or so pre-2015 Special Advisory Bulletins expressed deep suspicions and warned care providers that gainsharing could violate Civil Monetary Penalty (CMP) laws. Those laws restrict hospitals from compensating physicians in order to reduce or limit Medicare or Medicaid services.
MACRA clarified CMP in favor of gainsharing. It said that the CMP law only applied to cases where the payment to the doctor was to reduce medically necessary services. Any other purpose, like cutting costs while maintaining (or improving) care was fine.
And now the OIG has confirmed it by saying (in Advisory Opinion 17-09) that gainsharing Arrangements would not result in sanctions under the Civil Monetary Penalty rules or the Federal Anti-Kickback Statute—if structured properly.
Details
The January 5th advisory opinion was in response to a specific case—and, thereby, shows how these rules would be applied in a real-world case.
The group which was examined by the OIG consisted of eight neurosurgeons who were practicing within a larger, multi-specialty medical center.
Of the eight, seven were shareholders in the practice and one was not. The non-shareholder neurosurgeon was an employee and was allowed to participate in any gainsharing incentive payments for the third performance year only.
All of the surgeons have active medical staff privileges at the medical center. They referred patients to the Medical center for inpatient and outpatient hospital services. They performed most of their spinal surgeries at the medical center and all of the medical center’s spinal surgeries are furnished by the eight neurosurgeons.
The medical center hired a program administrator to manage the gainsharing Arrangement. The administrator was paid a fixed monthly fee which was certified as fair market value in an arm’s length transaction.
The administrator was not eligible to participate in any cost savings benefits.
