Gain-sharing between hospitals and physicians poses "substantial risk" under federal antikickback laws, HHS' inspector general's office told the House Ways and Means health subcommittee. While gain-sharing may reduce hospital costs, the practice should occur only with strict safeguards that stress accountability, quality controls and the prevention of direct payments for referrals, said Lewis Morris, chief counsel to the inspector general's office. Earlier this year, the office greenlighted a string of cardiac-products gain-sharing deals put together by Goodroe Healthcare Solutions, Norcross, Ga.; all had various safeguards attached. The consulting firm was acquired by hospital alliance VHA earlier this week. Many hospitals consider gain-sharing an attractive option, if it were legal, because it allows physicians to reap part of the savings from cost-effectiveness programs they implement.
At the hearing, Rep. Pete Stark (D-Calif.) called the arrangements kickbacks and a threat to quality of care, urging lawmakers to curb such relationships, "not propagate them." Chairwoman Nancy Johnson (R-Conn.), who supports gain-sharing, said the hearing was "as important a hearing as I have chaired in my years in Congress." No bill has been filed regarding gain-sharing, but a hearing may indicate a bill is likely to come. -- by Matthew DoBias