OIG 2008 Advisory Opinion No. 08-21: OIG Approves Cardiology Gainsharing Agreement

Health Law Alert Special Supplement: OIG 2008 Advisory Opinions Newsletter

Summer 2009

On November 25, 2008, the OIG issued Advisory Opinion 08-21, concerning an existing gainsharing agreement between a hospital and four cardiology groups based on certain cost-saving measures implemented in certain cardiac catheterization procedures.

As in past advisory opinions, this gainsharing arrangement concerned the use of specific medical devices and supplies during the designated procedures. Like Advisory Opinion 08-15, the arrangement at issue involved the cardiology group's year-over-year reduction in costs in three general areas: Product Standardization; "Use as Needed" Devices; and Product Substitutions. As in 08-15, the program was developed and overseen by an independent Program Administrator, and safeguards were put in place to ensure that participating physicians continued to make appropriate medical decisions, did not alter their referral patterns, appropriately disclosed the gainsharing arrangement to patients, and kept all appropriate records and documentation.

The OIG's analysis of this arrangement reiterated the OIG's concerns that gainsharing arrangements pose a significant threat of both abuse and poor patient care. As in 08-15, however, the OIG determined that this arrangement contained sufficient safeguards to minimize those risks and, under the totality of the circumstances, posed very little risk. Accordingly, the OIG determined that it would not pursue sanctions in respect to the gainsharing arrangement.

As in 08-15 and 08-16, Advisory Opinion 08-21 demonstrates the OIG's continued willingness to permit gainsharing arrangements so long as sufficient safeguards against fraud and abuse and ensuring quality patient care have been created.