GAO: Legal burdens dissuade health systems from P4P

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The Stark law and anti-kickback statutes are so challenging that some health systems have ended financial incentive programs or have refrained from starting new ones, according to an Government Accountability Office report released yesterday.

The regulations that restrict financial relationships among providers do offer safe harbors for financial incentive programs, but there are no exceptions specifically for quality and efficiency incentive programs. For example, the Civil Monetary Penalties law prohibits hospitals from paying physicians to reduce or limit services. With initiatives across the country to improve care and cuts costs, the current laws could have significant implications for pay-for-performance programs and whether health systems choose to engage in them.

The Centers for Medicare & Medicaid Services and the Office of the Inspector General, however, waive fraud and abuse laws that offer safeguards for those participating in the Shared Savings experiment.

In GAO's study of stakeholders, legal experts said innovative arrangements are difficult to structure and the advisory opinion process is burdensome. For instance, those organizations requesting guidance must pay all the costs for those requests.

"GAO's work suggests that stakeholders' concerns may hinder implementation of financial incentive programs to improve quality and efficiency on a broad scale. Stakeholders--government agencies and healthcare providers--likely will continue to have different perspectives about the optimal balance between innovative approaches to improve quality and lower costs and retaining appropriate patient safeguards."

To learn more:
- read the GAO summary and report (.pdf)

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