Hospital-doctor cost-saving plan gets OIG nod

The proposal would cut cardiac surgery spending by standardizing equipment and reducing medical supply waste.

By Mike Norbut, AMNews staff. March 28, 2005.

An agreement that involves a hospital sharing a portion of its savings with doctors who implement cost-reduction measures in surgery raises red flags, but its proposed safeguards would prevent sanctions, according to a recent government ruling.

In a February advisory opinion, the U.S. Dept. of Health and Human Services Office of Inspector General told a hospital and a group of cardiac surgeons that because of the structure and openness of their agreement, it would not warrant government discipline. The OIG reviewed the case in light of federal anti-kickback statutes and laws prohibiting payments to physicians for limiting services to Medicare and Medicaid beneficiaries. The report stressed the opinion is only applicable to the parties that asked for it. However, physician groups often see these rulings as a positive sign that such arrangements will not automatically be considered illegal.

The hospital and physician group, the names of which were not disclosed, described a situation in which the doctors would share half the savings "directly attributable to specific changes in the surgical group's operating room practices," the opinion read. There were 27 proposed changes, primarily geared toward creating a common set of surgical items and eliminating waste by not opening medical supplies unless they were needed.