Hospitals that want to reward physicians for their help saving money and meeting pay-for-performance goals have more positive signals from the federal government that carefully designed deals wont be viewed as doorways to fraud and abuse.
In two advisory opinions posted last week, HHS inspector generals office for the first time expressed an open mind to a multiyear arrangement involving what has been known as gain-sharingwhich the CMS now wants to call shared savings programsas well as a proposal in which a hospital would share a bonus received from a private insurer for reaching quality and efficiency targets.
Such payment flowing from hospitals to physicians technically can draw sanctions from the inspector generals office under its authority to police kickbacks for referrals and inducements for physicians to limit services. In both cases, the staff concluded the parties that sought the opinion had structured sufficiently specific and transparent contracts with safeguards that are based on reliable clinical data and measures.
The inspector generals staff, in previous opinions posted as recently as August, has expressed the view that multiyear agreements might be more vulnerable to abuse. If youre paying physicians for conduct thats become the accepted standard of care, thats considered a kickback, said Catherine Martin, a lawyer who previously worked for the agency and now is counsel with Adelman, Sheff & Smith in Annapolis, Md.
In the opinion regarding the shared savings program, the hospital has arranged to pay cardiology groups 50% of savings achieved during procedures by standardizing devices they use; limiting the use of vascular closure devices; and substituting a less expensive anti-thrombotic drug. The savings achieved is measured against a base established with historical data, and the base is redrawn at the end of the first and second years.
The opinions are another indication from the OIG that gain-sharing is continuing to gain acceptance, and they continue to open the door with each arrangement, Martin said. An August opinion approved an arrangement for shared savings between a hospital and orthopedic and neurosurgery groups for spine-fusion procedures, the first time the agencys public views on the topic had ventured beyond cardiac procedures (Aug. 11, p. 10).
The progression certainly represents a growing openness in the government to the idea, though the particular steps are driven by the parties who request the inspector generals offices approval. Each of a dozen positive opinions on gain-sharing from the inspector generals office has come in response to clients of Goodroe Healthcare Solutions, a VHA subsidiary. The agency hasnt addressed a multiyear arrangement earlier because no one asked.
We had a model that was working and had been approved by the OIG previously; that was the comfort level with hospitals, said Lani Berman, a senior director for Goodroe.
What we learned over time as weve done more of these arrangements, it takes time for hospitals to build partnerships and trust in the data with their physicians, Berman said. Hospitals were looking for ways to develop long-term relationships with physicians, so it could become a fundamental way they interact with doctors.
In the 2009 physician fee schedule posted in late June, the CMS proposed a 16-point set of criteria allowing hospitals to pay physicians for shared savings or quality improvement without triggering the other federal law that casts a cloud over the deals: the Stark law, which restricts physicians from referring patients for Medicare services to entities, including hospitals, in which they have a financial interest. In the proposal, the CMS considers requiring multiyear programs to employ rebasinglike the one the inspector general approved last weekor scaling, in which the hospital would pay a smaller percentage of savings in each subsequent year.
Martin said she viewed scaling as simpler. You get to the same place, Martin said. Youre reducing the risk (that) youre paying the doctor twice for achieving the same savings.
Berman, though, said Goodroes clients favored the other approach because the physicians groups were more comfortable that they would actually receive half the benefit of the savings their members achieved.
Also new is language that specifies how the parties said they would choose which products will be the standard ones for the given procedure. First they would consider which ones were clinically safe and effective, and second they would determine whether standardization was clinically appropriate. Only then would they consider cost. Martin suggested the addition comes in response to criticism from the device industry that gain-sharing means physicians will use whatever product is cheapest.
In the second opinion issued last week, a hospital thats eligible for bonus payments from a private insurer for meeting performance targets wants to share the incentive with physicians in order to enlist their help.
The inspector generals staff said the planwhich Goodroe did not help designpotentially invokes the same regulatory hazards as gain-sharing because the targets are based on care delivered to all patients, not just the ones covered by the insurer providing the bonus.
The agency concluded, however, that the proposal includes adequate safeguards to ensure patients arent deprived of care and physicians arent being paid for referrals rather than measures aimed at improving quality.