The trusted source for
healthcare information and
Group to urge Congress to change law
Law firm McDermott, Will & Emery has formed a coalition that seeks to restore the ability of physicians and hospitals to enter into cost-reduction arrangements without risking fines from the Office of the Inspector General (OIG) of the Depart ment of Health and Human Services.
The coalition, largely made up of hospital system representatives, is seeking an amendment to the Civil Monetary Penalties Statute that would legalize properly structured gainsharing arrangements, says Marilu M. King, JD, an attorney who is heading up the effort from the law firm’s Washington, DC, office.
Gainsharing is an arrangement in which a hospital gives physicians a percentage share of any reduction in the hospital’s cost for patient care that can be attributed to the physicians’ efforts.
In a July advisory that surprised many in the health law community, the OIG pulled the plug on gainsharing arrangements between hospitals and physicians. It advised hospitals and physicians to terminate their gainsharing arrangements and seek legislative relief by clarifying the law to permit properly structured gainsharing arrangements.
The Coalition to Restore Physician-Hospital Cost Reduction Arrangements was formed in August to try to convince Congress to amend the Civil Monetary Penalties Statute as cited by the OIG in its special advisory bulletin, King says. At the same time, the coalition is supporting the efforts of U.S. Rep. Bill Thomas (R-CA), chairman of the House Ways and Means Sub com mit tee on Health, to correct problems in the Stark II statute.
Thomas’ bill, called "the Physician Self-Referral Amendments of 1999," would amend the Stark law so physicians who have a share of ownership or who have compensation arrangements with entities such as clinical labs or cardiac catheter ization units could refer Medicare or Medicaid patients, King says. "Because our coalition is focused on gainsharing, we are more interested in the compensation arrangements rather than ownership. There is some concern by lawmakers that the Stark statute would prohibit some kinds of gainsharing arrangements."
The coalition includes hospitals, health systems, academic medical centers, group practices, accounting firms, and health care consulting firms.
In addition to discussions with Congress and the OIG on revising the law, the coalition is seeking support from national hospital and physician advocacy associations. King urges physician practices to:
• bring the matter to the attention of any hospitals with which they have compensation arrangements and ask them to support the coalition’s efforts;
• make sure the professional societies to which they belong are aware of the effort;
• contact their congressional representatives and urge their support of the measures.
[Editor’s note: For more on the coalition, contact Casey Kundert at McDermott, Will & Emery’s Chicago office at (312) 899-7203 or visit the law firm’s Web site at www.mwe.com.]