U.S. attorneys said three New Jersey hospitals suing the CMS to stop a "gainsharing" project didn't ask to be included in the experiment until almost four months after it was approved and one week before its scheduled launch. The three-year demonstration project allows participating hospitals to offer cash bonuses -- without the risk of invoking antikickback laws -- to physicians who help their hospitals reduce inpatient costs. As a member of the New Jersey Hospital Association, which helped design the project, one of the plaintiffs, Robert Wood Johnson University Hospital at Rahway, knew of the project since Sept. 13, 2003, but never expressed interest in participating, the attorneys for the CMS said. The three hospitals, all belonging to Robert Wood Johnson Health System, sued to block the project Jan. 14 in U.S. District Court in Newark, arguing the project gives participating hospitals an unfair competitive advantage. A preliminary hearing is scheduled for Monday.
According to a 41-page response released today by the CMS, the three hospitals have offered no evidence that they've lost patients to any of the eight hospitals selected for the program since it was launched Jan. 1. In addition, the plaintiffs "merely speculate" that participating doctors might send patients to competing hospitals, according to the response. "The competitive impact of performance-based incentives could be expected to be negligible," the response said. Expanding the project to all 82 hospitals in New Jersey -- as the Robert Wood Johnson hospitals alternatively demanded -- "ignores that the resources which (HHS) can commit to monitoring and evaluating the project are obviously not infinite," it said. -- by Cinda Becker