OIG Advisory Opinion 08-21: Another Favorable Opinion on Gainsharing Related to Cardiac Catheterization

On December 8, 2008, the OIG posted Advisory Opinion 08-21, dealing with a proposed gainsharing arrangement between a hospital and radiologist and cardiologists who perform cardiac catheterization services.

The opinion is very similar to Advisory Opinion 08-15, which we blogged about here.


Under the proposed arrangement, the hospital identified 27 specific cost savings opportunities which were reviewed for medical appropriateness and recommended to the radiology and cardiology groups. The recommendations fell into three categories: product standardization, "use as needed" devices, and product substitutions.

The hospital proposed to pay each group 50% of the savings achieved by that group by implementing the applicable recommendations.

Although the OIG found that the recommendations would potentially implicate the Civil Monetary Penalties provision by inducing physicians to reduce or limit services to Medicare beneficiaries, the safeguards were sufficient to avoid sanctions. Specifically, the following safeguards were deemed relevant:

The cost savings actions and their resultant savings are transparent and able to be scrutinized by the public.

1. There is credible medical support for the recommendations.
2. Amounts paid under the arrangement do not take into account the patient's insurance and the savings are not disproportionately obtained from federal health care program beneficiaries.
3. Historical and clinical measures were used to establish baseline thresholds beyond which no further savings can be achieved.
4. Individual physicians still will have the same selection of devices and supplies available if they want to use them.
5. Written disclosure of the arrangement will be provided to patients.
6. Financial incentives were reasonably limited in duration and amount.
7. The groups distribute profits per capita, limiting the ability of any one physician to achieve a disproportionate cost savings.

The OIG also noted that the arrangement would implicate the anti-kickback statute if the requisite intent to induce referrals was present, but found the following safeguards to be sufficient:

1. The ability to participate in the arrangement is limited to physicians already on staff.
2. The structure of the arrangement eliminates the risk that the arrangement could be used to reward surgeons or others who refer patients to the two groups.
3. The actions that could generate cost savings are specifically set out, the program is limited in duration and is reasonable in amount taking into account the actions required of the physicians.

To read the full text of the opinion, please click here.