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Gainsharing is legal when surgeons adhere to OIG guidelines
Health care attorney offers advice for devising effective gainsharing agreements while meeting requirements.
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Gainsharing is often a gray area for hospitals and physicians, as many question its legality and the government regulations surrounding it.
Health care attorney David M. Glaser, JD, of Minneapolis, separated myth from reality and counseled orthopedic surgeons on the most effective - and legal - gainsharing deals at Orthopedics Today New York 2006, A Comprehensive CME Course.
Glaser explained that most of the skepticism surrounding gainsharing legality stems from a change of heart by the Office of Inspector General (OIG), Health and Human Services.
In an advisory bulletin released about 7 years ago, the OIG said it is a felony to make a payment intended to reduce services to a Medicare beneficiary, Glaser said. The OIG also said that hospitals and physicians were limiting services to patients when they entered deals that arranged for the use of only one particular manufacturer’s product. This broad statement led most physicians and hospitals to believe gainsharing is illegal, he said.
However, the OIG has since agreed in seven cases not to prosecute hospitals with gainsharing arrangements. Instead, the OIG implemented required procedures to ensure that quality and care are upheld during the gainsharing period, he said.
“If you set up a system and it has payment caps, utilization targets and disclosure to patients, the government will say, ‘We think it's probably OK,’” Glaser said.
He suggested two ways to structure gainsharing deals. Physicians can charge hourly payments to provide advice to the hospital, or receive packaged payments that compensate them a certain amount each year. The latter is clearly the more ideal structure, he noted.
For physicians to receive payments throughout the terms of the deal, “Ideally, you would set up some sort of a benchmark for what's going on today and try to compare future expenses to expenses today so that you get some percentage of the savings,” Glaser said.
For more information:
- Glaser DM. Gainsharing for the orthopedic surgeon: What’s legal and what isn’t? Presented at Orthopedics Today New York 2006, A Comprehensive CME Course. Nov. 11-12, 2006. New York.