BUSINESS CONSULT
JASON LEE
Senior Manager
WILL CRANE
Manager, ECG Management Consultants
Partnering in Cost Savings
Initiatives to Increase
Compensation
W
hile the Centers for Medicare and
Medicaid Services (CMS) and other
payors look for new ways to reduce
total cost of care, health care providers are feeling
the simultaneous squeeze in reimbursement. And
the reality is that cost-cutting efforts are going
to continue, further constricting cardiologists’
compensation. But, a silver lining can be found
from an unlikely source—gainsharing. Gainsharing agreements allow physicians to share in cost
savings achieved by reducing the cost of delivering care. Historically, these agreements have been
difficult to implement due to burdensome legal
restrictions placed on them. However, CMS’s
recently announced mandatory bundled payment program—the Comprehensive Care for Joint
Replacement (CJR) model—comes with waivers to
many of these restrictions. This suggests that CMS
is open to loosening regulations under certain
circumstances, opening the door for hospitals to
reward physicians for participating in cutting costs
through gainsharing. Several cardiology-related
procedures, such as coronary artery bypass surgery and stent implantation, have been included in
gainsharing agreements previously, and will likely
be incorporated in many more agreements in the
future if or when regulatory requirements are
relaxed. Under a gainsharing structure, physicians
who assist in lowering the costs of implantable
devices or supplies used in these procedures are
eligible to receive payments for savings achieved.
The financial opportunity for both health systems
and physicians can be substantial, especially for
larger physician practices.
care. Specifically, the OIG wants to avoid a number
of unfair, unsafe, or unethical behaviors, including
the following:
Historical Legal Considerations
Gainsharing agreements have been around for
many years, and opinions published by the Office
of Inspector General (OIG) have provided insight
into the rigorous restrictions placed on these arrangements.1 For good reason, the OIG has sought
to prevent arrangements that potentially influence
physicians’ judgment to the detriment of patient
TABLE
44 CardioSource WorldNews
•
“Cherry-picking” healthy patients
•
Steering sicker and more costly patients to
hospitals that do not offer such arrangements
•
Accepting payments in exchange for patient
referrals
•
Generating unfair competition among hospitals by offering cost-savings programs to foster
physician loyalty and to attract more referrals
•
Limiting or reducing care due to the financial
rewards of the arrangement.
To ensure physicians are not incentivized to
change their referral patterns as a result of the
agreement, limits to the volume of procedures
eligible for gainsharing were previously required.
Because of this restriction, physicians with limited
volumes at a hospital prior to a gainsharing agreement being offered were often not eligible for
enough savings to make it worth their while.
Impact of New Legislation
Under the CJR initiative, CMS has waived the
volume and referral restrictions previously placed
on gainsharing with physicians. For their contributions to savings achieved during each respective
year of the program, physicians are eligible to
receive shared savings payments based on the
volume of procedures performed in that year,
provided that the agreement contains measurable
quality criteria that physicians must meet to receive a gainsharing payment. These quality criteria
must be measured for the same time period that
the gainsharing payments are calculated, and
documentation of the physician’s ability to meet
the minimum thresholds associated with each
quality metric is required.
While the necessity of monitoring patient care
quality remains, easing of the volume and referral
restrictions enacted under the Stark law and the
Anti-Kickback Statute are important indications
of the increased regulatory flexibility that is likely
to continue moving forward. CMS is focused on
incentivizing providers to engage with hospitals
in efforts to drive cost savings, and the financial
rewards for physicians can be significant.
Evaluating the Financial Opportunity
To fully realize the financial opportunity that
gainsharing presents, it’s important to engage
physicians and service line leadership in discussions about current care processes. For cardiology
practices or service lines that have not been active
in managing acute care costs, there is likely a substantial financial incentive for both hospitals and
cardiologists to establish a gainsharing arrangement. Implantable devices are frequent candidates
for gainsharing. Some organizations use a process
Continued on page 47
Evaluating the Financial Opportunity
Key Takeaways
Description
#1
Strict regulatory restrictions on gainsharing agreements appear to be easing.
#2
With eased restrictions, gainsharing agreements present a potentially significant opportunity for providers
to share in cost savings initiatives.
#3
Given the prevalence of high cost procedures within cardiology, cardiologists should be looking to take
advantage of the opportunity that gainsharing presents.
February 2016