DOJ: Hospital-doc gainsharing won't hurt competition

Despite legal concerns, nonprofit hospitals in New York can pay physicians for reducing the cost of care now that the U.S. Department of Justice has approved a gainsharing program, AHA News Now reported.

Under the Greater New York Hospital Association's plan, roughly 100 member hospitals can pay a share of their savings to physicians whose costs drop or remain low.

What's more, the gainsharing payments won't restrict competition or "facilitate collusion," DOJ announced after yesterday's ruling.

That's because participating hospitals will not trade confidential data and each hospital will independently set the payment amounts for doctors, the DOJ noted.

The gainsharing concept also seems especially suitable for a large hospital association or group, Reuters noted. "There's a lot to the management of it. Hospitals have to gather the data, pool the data and make sure that patient protections are still in place," Catherine Martin, a healthcare lawyer at Adelman Sheff & Smith, told the news agency.

In New Jersey, similar gainsharing efforts among 12 hospitals have been estimated to save as much as $300 for each surgery patient and $100 for other admitted patients, FierceHealthFinance previously reported.

The DOJ approval follows a green light from the Office of Inspector General, which determined that providing bonuses to physicians for quality and cost efficiency doesn't warrant financial penalties under anti-kickback laws.

With such regulatory backing, New York's public hospitals also are implementing quality and efficiency incentive programs, tying bonus payments for more than 3,500 employed physicians to performance benchmarks.

For more:
- read the AHA News Now brief
- here's the DOJ statement
- read the Reuters article