As doctors protest high malpractice costs with slowdowns and strikes, some hospitals are offering cash subsidies to help offset skyrocketing insurance premiums-a practice that skirts the safe-harbor provisions of federal antikickback statutes.
But despite concerns over the legality of these subsidies, HHS' inspector general's office has given its qualified stamp of approval to plans by a handful of hospitals in particularly hard-hit states to provide direct, temporary financial assistance to physicians.
In a guidance letter posted on its Web site, oig.hhs.gov, the inspector general's office acknowledged it was concerned that soaring malpractice premiums are threatening access to care in certain states. Lewis Morris, chief counsel to the inspector general, said his agency will take the access issue into account and "exercise our enforcement discretion accordingly."
Only a few hospitals now provide subsidies to physicians, according to some observers. "This is a short-term, stopgap measure to avoid a total meltdown," said Richard Corlin, immediate past president of the Chicago-based American Medical Association.
However, other federal agencies may continue a hard-line approach. Morris pointed out in his two-page letter that the inspector general only has "limited jurisdiction" on issues relating to antikickback laws and Stark statutes, which govern patient referrals, noting that primary jurisdiction in those areas falls to the U.S. Justice Department and the Centers for Medicare and Medicaid Services.
Spokesmen at the Justice Department and the CMS declined comment last week on whether they would take action against malpractice premium subsidies.
Indeed, a spokeswoman for the Chicago-based American Hospital Association cautioned against viewing the guidance as a green light to subsidize insurance premiums. "This doesn't provide an open door to other hospitals to pick up the tab for these medical liability costs," said Alicia Mitchell. "And it doesn't bind other government agencies."
The inspector general's letter, posted on the Web Jan. 15, came in response to a health system that sought guidance in mid-December after seeking to provide temporary financial assistance to physicians on its medical staffs.
In Mississippi, where a group of doctors began monthlong leaves of absence in late January, 103-bed King's Daughters Hospital, Greenville, created a trust fund of up to $1 million to help pay malpractice premiums during the next three years. Chief Executive Officer David Fuller said the program will cover increases in the cost of doctors' insurance premiums from 2002 to 2003, when the average increases amounted to about 45%.
Physician activism has prompted lawmakers to consider changes in tort law, including legislation introduced last week by U.S. Rep. James Greenwood (R-Pa.). Political pressure may have hastened the inspector general's decision to provide guidance.
In its letter, the inspector general's office noted the proposed arrangements by the unidentified healthcare system include a number of safeguards, including that the subsidies will be provided on an "interim basis in states experiencing severe access or affordability problems." Among other favorable factors, financial assistance would not be related to the volume or value of referrals, and the subsidy would be limited to the premium increase.