Quality of Care Initiatives Gaining Momentum of Care... · Quality of Care Initiatives Gaining Momentum ... Creating or aligning financial incentives. 19 What is Gainsharing? Covers

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Quality of Care Initiatives Quality of Care Initiatives

Gaining MomentumGaining Momentum

Katie Arnholt, OIG/HHSKatie Arnholt, OIG/HHS

Jacqueline C. Baratian, Alston & Bird, LLPJacqueline C. Baratian, Alston & Bird, LLP

William Mathias, Ober|KalerWilliam Mathias, Ober|Kaler

OverviewOverview

�� OIG/AHLA Guidance for Health Care Boards OIG/AHLA Guidance for Health Care Boards of Directorsof Directors

�� OIG/HCCA RoundtableOIG/HCCA Roundtable

�� Quality of Care Government EnforcementQuality of Care Government Enforcement

�� Recent Enforcement Actions and SettlementsRecent Enforcement Actions and Settlements

�� Developments in Quality of Care Corporate Developments in Quality of Care Corporate Integrity AgreementsIntegrity Agreements

�� Gain sharing and Pay for Performance Gain sharing and Pay for Performance InitiativesInitiatives

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2008 OIG Work Plan2008 OIG Work Plan

� “OIG will continue to examine quality-of-care issues for beneficiaries residing in nursing facilities and other care settings . . . We will expand our focus on these issues to additional institutions and community-based settings”

OIG/AHLA Guidance for Health OIG/AHLA Guidance for Health

Care Boards of Directors Care Boards of Directors

�� Released in September of 2007Released in September of 2007

�� Third in a series of guides from OIG/AHLAThird in a series of guides from OIG/AHLA

�� Joint public sector/private sector effortJoint public sector/private sector effort

�� Educational resource, not mandatesEducational resource, not mandates

�� Assists boards in exercising their fiduciary Assists boards in exercising their fiduciary

responsibilitiesresponsibilities

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Defining Quality of CareDefining Quality of Care

�� ““Crossing the Quality Chasm” Institute of Medicine’s Crossing the Quality Chasm” Institute of Medicine’s sixsix--part definition of health care qualitypart definition of health care quality�� SafeSafe

�� EffectiveEffective

�� PatientPatient--centeredcentered

�� TimelyTimely

�� EfficientEfficient

�� EquitableEquitable

�� Public and private quality initiates provide benchmarks Public and private quality initiates provide benchmarks �� National Quality Forum, Joint Commission, Leapfrog, CMS National Quality Forum, Joint Commission, Leapfrog, CMS DemonstrationsDemonstrations

�� The “Bottom Line”The “Bottom Line”

�� Quality is an essential component of the mission of health Quality is an essential component of the mission of health

care providers.care providers.

�� Quality must receive the same level of Board attention as the Quality must receive the same level of Board attention as the

corporation’s financial viability. corporation’s financial viability.

�� Quality and cost efficiency are complementary, Quality and cost efficiency are complementary, notnot

contradictory, elements of an effective health care system.contradictory, elements of an effective health care system.

�� Unique opportunity for leadership and positive change.Unique opportunity for leadership and positive change.

Duty of Care and QualityDuty of Care and Quality

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OIG WANTS BOARDS TO ASKOIG WANTS BOARDS TO ASK::

1.1. What are the goals of the quality program and benchmarks used? What are the goals of the quality program and benchmarks used? How is management accountable?How is management accountable?

2. How is quality measured and by whom?2. How is quality measured and by whom?

3. How is quality integrated into policies and operations, and 3. How is quality integrated into policies and operations, and how how are they enforced? What controls are in place?are they enforced? What controls are in place?

4. Is there an education program on quality for Board members, 4. Is there an education program on quality for Board members, and do any members have quality expertise?and do any members have quality expertise?

5. What is the essential information on quality, and how frequen5. What is the essential information on quality, and how frequently tly is it received?is it received?

OIG WANTS BOARDS TO ASKOIG WANTS BOARDS TO ASK::

6.6. How do quality and compliance coordinate, and how are they How do quality and compliance coordinate, and how are they addressed in the risk assessment and action plans?addressed in the risk assessment and action plans?

7. What are the processes for reporting quality issues and 7. What are the processes for reporting quality issues and preventing retaliation? What are the guidelines for Board preventing retaliation? What are the guidelines for Board reporting?reporting?

8. Are human and other resources adequate to support quality? 8. Are human and other resources adequate to support quality? Are systems in place to account for different patient needs?Are systems in place to account for different patient needs?

9. Do competencies, training, credentialing and peer review 9. Do competencies, training, credentialing and peer review adequately focus on quality?adequately focus on quality?

10. How are adverse events identified, analyzed and reported and10. How are adverse events identified, analyzed and reported andincorporated into performance improvement? How does Board incorporated into performance improvement? How does Board address these without increasing liability exposure?address these without increasing liability exposure?

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OIG/HCCA RoundtableOIG/HCCA Roundtable

Driving for Quality in LongDriving for Quality in Long--Term Care: Term Care:

A Board of Directors DashboardA Board of Directors Dashboard

�� On December 6, 2007, OIG the HCCA coOn December 6, 2007, OIG the HCCA co--sponsored a sponsored a Government/Industry Roundtable for representatives Government/Industry Roundtable for representatives from the longfrom the long--term care industry. term care industry.

�� Provided representatives from the longProvided representatives from the long--term care term care industry an opportunity to share experiences and industry an opportunity to share experiences and inform OIG/HCCA of challenges surrounding boards inform OIG/HCCA of challenges surrounding boards of directors’ oversight of quality of care.of directors’ oversight of quality of care.

Purpose of RoundtablePurpose of Roundtable

�� Discuss issues surrounding boards of directors’ Discuss issues surrounding boards of directors’

oversight of quality of careoversight of quality of care

�� Share ideas about how to improve boards of Share ideas about how to improve boards of

directors’ oversight of quality of caredirectors’ oversight of quality of care

�� Generate ideas for a “Quality of Care Generate ideas for a “Quality of Care

Dashboard”Dashboard”

�� Purpose was NOT to set forth any specific Purpose was NOT to set forth any specific

standard of carestandard of care

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Roundtable Breakout DiscussionsRoundtable Breakout Discussions

Four Discussion AreasFour Discussion Areas

�� Commitment to qualityCommitment to quality

�� Processes related to monitoring and improving Processes related to monitoring and improving

quality of carequality of care

�� Outcome measures for quality of careOutcome measures for quality of care

�� Challenges and opportunities in using a Quality Challenges and opportunities in using a Quality

of Care Dashboardof Care Dashboard

Roundtable Roundtable –– what did we learn?what did we learn?

�� Commitment to QualityCommitment to Quality

�� Forum for quality issuesForum for quality issues

�� Regular reports to the BoardRegular reports to the Board

�� Active questioningActive questioning

�� Mission statementMission statement

�� Board member training/educationBoard member training/education

�� Strategic and capital planningStrategic and capital planning

�� Resources for staff training and retentionResources for staff training and retention

�� Culture of qualityCulture of quality

�� Having necessary structures and processesHaving necessary structures and processes

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�� Process MeasuresProcess Measures

�� Quality data reports to the BoardQuality data reports to the Board

�� Develop Board expertise and understanding of quality data Develop Board expertise and understanding of quality data

and issuesand issues

�� Quality subcommitteeQuality subcommittee

�� Validation of data/informationValidation of data/information

�� Free flow of informationFree flow of information

�� Coordinated response to quality problemsCoordinated response to quality problems

�� Systemic corrective actionSystemic corrective action

�� Staff retention, training, and competencyStaff retention, training, and competency


�� Outcome MeasuresOutcome Measures

�� Use of quality outcomesUse of quality outcomes

�� State surveysState surveys

�� Quality Indicators/Quality MeasuresQuality Indicators/Quality Measures

�� Events reportingEvents reporting

�� Employee, resident, and family surveysEmployee, resident, and family surveys

�� Staff turnoverStaff turnover

�� ComplaintsComplaints

�� Consistent and useful tracking of quality outcomesConsistent and useful tracking of quality outcomes

�� Trend data and contrast and compareTrend data and contrast and compare

�� Do not overwhelm with data; focus on key areasDo not overwhelm with data; focus on key areas

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�� ChallengesChallenges

�� Enough information, but not too muchEnough information, but not too much

�� Legal liability concernsLegal liability concerns

�� One size does not fit allOne size does not fit all

�� Reliability of available quality dataReliability of available quality data

�� OpportunitiesOpportunities

�� Setting quality as a prioritySetting quality as a priority

�� Quality tied to financial performance, overall success of Quality tied to financial performance, overall success of

organization, and staff satisfactionorganization, and staff satisfaction

�� Empower Board with a toolEmpower Board with a tool

RoundtableRoundtable

�� Report of Roundtable available at:Report of Roundtable available at:�� www.hccawww.hcca--info.org/staticcontent/07OIGRoundtableReport.pdf info.org/staticcontent/07OIGRoundtableReport.pdf

�� http://www.oig.hhs.gov/fraud/docs/complianceguidance/Roundtable0http://www.oig.hhs.gov/fraud/docs/complianceguidance/Roundtable011

3007.pdf. 3007.pdf.

�� Hospital Quality of Care Roundtable Hospital Quality of Care Roundtable

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Federal Quality of Care Enforcement Federal Quality of Care Enforcement

AuthoritiesAuthorities

�� CriminalCriminal

�� 18 USC § 286, 287 (false certifications to the US)18 USC § 286, 287 (false certifications to the US)

�� 18 USC § 371 (conspiracy)18 USC § 371 (conspiracy)

�� 18 USC § 1001 (false statements)18 USC § 1001 (false statements)

�� 18 USC § 1035 (false statements about health care matters)18 USC § 1035 (false statements about health care matters)

�� 18 USC § 1341 (mail fraud)18 USC § 1341 (mail fraud)

�� 18 USC § 1343 (wire fraud)18 USC § 1343 (wire fraud)

�� 18 USC § 1347 (health care fraud) 18 USC § 1347 (health care fraud)

�� 18 USC § 1518 (obstruction of criminal HC investigation)18 USC § 1518 (obstruction of criminal HC investigation)

�� 42 USC § 1320a42 USC § 1320a--7b (false statements relating to fed. Health)7b (false statements relating to fed. Health)



�� CivilCivil

�� the False Claims Actthe False Claims Act

�� Anyone who knowingly presents a false claim for payment Anyone who knowingly presents a false claim for payment

to the federal government . . .to the federal government . . .

�� Actual knowledge, reckless disregard, or deliberate ignoranceActual knowledge, reckless disregard, or deliberate ignorance

�� shall be liable for treble damages and civil penalties from shall be liable for treble damages and civil penalties from

$5,500 to $11,000 per false claim. 31 U.S.C. 3729, $5,500 to $11,000 per false claim. 31 U.S.C. 3729, et seqet seq. .

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False Claims ActFalse Claims Act

�� Legal theory = failure of care/worthless servicesLegal theory = failure of care/worthless services

�� When a defendant knowingly bills the US for goods When a defendant knowingly bills the US for goods

or services that were:or services that were:

�� Not renderedNot rendered

�� Medically or otherwise worthlessMedically or otherwise worthless

�� Violated a statutory, regulatory or contractual provision Violated a statutory, regulatory or contractual provision

with a nexus to payment (also called false certification by with a nexus to payment (also called false certification by

us and “implied certification” cases by others)us and “implied certification” cases by others)

What does this mean in plain What does this mean in plain

English?English?

�� Providers that knowingly render grossly Providers that knowingly render grossly

substandard care or no care at all,substandard care or no care at all,

�� That harms or kills patients, (not a required That harms or kills patients, (not a required

element, but usually present), and element, but usually present), and

�� Bills Medicare or Medicaid for the alleged care,Bills Medicare or Medicaid for the alleged care,

�� Can be pursued under the False Claims Act.Can be pursued under the False Claims Act.

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�� Key Administrative authoritiesKey Administrative authorities

�� Mandatory exclusion: § 1128(a)(2) (Patient Abuse or Mandatory exclusion: § 1128(a)(2) (Patient Abuse or

Neglect Conviction)Neglect Conviction)

�� Permissive exclusion: § 1128(b)(6)(B) (Failure of Permissive exclusion: § 1128(b)(6)(B) (Failure of

Care)Care)

�� duty to provide quality services that are medically duty to provide quality services that are medically

necessary: § 1156necessary: § 1156

ExclusionsExclusions

�� PurposePurpose�� To protect Federal health care programs and their To protect Federal health care programs and their beneficiariesbeneficiaries

�� ProspectiveProspective

�� RemedialRemedial

�� Not punitiveNot punitive

�� EffectEffect�� No payment will be madeNo payment will be made

�� For any item or serviceFor any item or service

�� Furnished Furnished

�� By an excluded individual or entityBy an excluded individual or entity

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State Quality of Care EnforcementState Quality of Care Enforcement

�� Medicaid Fraud Control UnitsMedicaid Fraud Control Units

�� Joint investigations with the Federal government Joint investigations with the Federal government

�� State False Claims ActsState False Claims Acts

�� Incentive under Section 6031 of the DRA Incentive under Section 6031 of the DRA -- ability ability

of state to share in FCA recoveriesof state to share in FCA recoveries

�� Growing number of states have enacted FCA Growing number of states have enacted FCA

statutes.statutes.

Recent Enforcement ActionsRecent Enforcement Actions

Ciena Healthcare ManagementCiena Healthcare Management

��Michigan nursing home chain (30+ facilities)Michigan nursing home chain (30+ facilities)��Allegations Allegations

�� residentresident--onon--resident abuse, resident abuse,

�� excessive pressure sores, inadequate pain management, excessive excessive pressure sores, inadequate pain management, excessive contractures, etc.contractures, etc.

�� Settled for $1.25 million Settled for $1.25 million

�� 55--year CIAyear CIA�� Quality of care provisions including independent monitor Quality of care provisions including independent monitor selected by OIG, role of medical directorselected by OIG, role of medical director

SeeSee 11 BNA’s Health Care Fraud Rep. 640 (Sept. 12, 2007)11 BNA’s Health Care Fraud Rep. 640 (Sept. 12, 2007)

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Recent Enforcement ActionsRecent Enforcement Actions

�� Press Release, U.S. Attorney’s Office for the Southern District Press Release, U.S. Attorney’s Office for the Southern District of of Florida, Florida Doctor Sentenced to 18 Months in Prison for Florida, Florida Doctor Sentenced to 18 Months in Prison for Medicare Fraud (October 2, 2007).Medicare Fraud (October 2, 2007).

�� Nursing Homes: DOJ Intervenes in Whistleblower Lawsuit Against Nursing Homes: DOJ Intervenes in Whistleblower Lawsuit Against Five Five St. LouisSt. Louis--Area Nursing Homes, Area Nursing Homes, 11 BNA’s Health Care Fraud Rep. 11 BNA’s Health Care Fraud Rep. 474 (July474 (July 4, 2007).4, 2007).

�� Louisiana: State Judge OKs $7.4 Million Settlement of Claims ofLouisiana: State Judge OKs $7.4 Million Settlement of Claims ofUnnecessary Cardiac SurgeryUnnecessary Cardiac Surgery, 11 BNA’s Health Care Fraud Rep. 366 , 11 BNA’s Health Care Fraud Rep. 366 (May 23, 2007).(May 23, 2007).

�� Press Release, U.S. Attorney’s Office for the Eastern District oPress Release, U.S. Attorney’s Office for the Eastern District of f Missouri, Missouri, American Healthcare Management, its CEO & Three Local American Healthcare Management, its CEO & Three Local Nursing Homes Plead Guilty to Conspiracy Charges Involving FailuNursing Homes Plead Guilty to Conspiracy Charges Involving Failure of re of Care at Nursing FacilitiesCare at Nursing Facilities (Oct. 10, 2006).(Oct. 10, 2006).

Data MiningData Mining

� James Sheehan, New York’s Medicaid Inspector General, and a former Assistant U.S. Attorney for the Eastern District of Pennsylvania, has predicted that DOJ will begin bringing enforcement actions based on “data-mining” conducted by HHS-OIG and CMS.

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Quality of Care Corporate Integrity Quality of Care Corporate Integrity

AgreementsAgreements

�� 28 quality of care CIAs28 quality of care CIAs

�� Different from other CIAsDifferent from other CIAs

�� Independent MonitorIndependent Monitor

�� Quality Assurance Monitoring CommitteeQuality Assurance Monitoring Committee

�� Internal Audit RequirementsInternal Audit Requirements

�� Extensive policies and proceduresExtensive policies and procedures

�� Intensive training requirementsIntensive training requirements

�� ReportingReporting

Quality of Care CIA PurposesQuality of Care CIA Purposes

�� PurposePurpose

�� CIA does not replace or duplicate CMS and state CIA does not replace or duplicate CMS and state

survey agency functions.survey agency functions.

�� Focus on systemic issues, not individual problems.Focus on systemic issues, not individual problems.

�� Focus on provider’s internal system of quality Focus on provider’s internal system of quality

assurance and improvement.assurance and improvement.

�� Cross state boundaries with chainCross state boundaries with chain--wide perspective.wide perspective.

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CIA Independent MonitorCIA Independent Monitor

�� Key provision in all quality of care CIAs.Key provision in all quality of care CIAs.

�� Provider pays for an outside monitor appointed Provider pays for an outside monitor appointed

by the OIG.by the OIG.

�� Monitor has extensive powers of access to Monitor has extensive powers of access to

facilities, residents, staff, corporate management, facilities, residents, staff, corporate management,

and records.and records.

�� Monitor plays consultative role.Monitor plays consultative role.

Independent Monitor ActivitiesIndependent Monitor Activities

�� Facility visitsFacility visits

�� Corporate & regional office visitsCorporate & regional office visits

�� Meetings with corporate boardsMeetings with corporate boards

�� Periodic reports to the OIG and providerPeriodic reports to the OIG and provider

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BoardBoard--Level Obligations in CIAsLevel Obligations in CIAs

In hospital CIAIn hospital CIA

�� BoardBoard--level Quality, Compliance, and Ethics level Quality, Compliance, and Ethics Committee:Committee:

�� Review and oversee performance of the compliance staffReview and oversee performance of the compliance staff

�� Annually review the effectiveness of the compliance Annually review the effectiveness of the compliance programprogram

�� Engage an independent compliance consultant to assist Engage an independent compliance consultant to assist board in review and oversightboard in review and oversight

�� Submit to OIG a resolution summarizing its review of Submit to OIG a resolution summarizing its review of provider’s compliance with CIAprovider’s compliance with CIA

BoardBoard--Level Obligations in CIAsLevel Obligations in CIAs

In nursing home CIAsIn nursing home CIAs

�� BoardBoard--level Quality Assurance Monitoring level Quality Assurance Monitoring

Committee:Committee:

�� Review system of internal controls, quality assurance Review system of internal controls, quality assurance

monitoring, and patient caremonitoring, and patient care

�� Ensure adequate response to reports of quality of Ensure adequate response to reports of quality of

care issues care issues

�� Ensure that there are policies and procedures Ensure that there are policies and procedures

directed at providing quality resident caredirected at providing quality resident care

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Developments in Nursing Home Developments in Nursing Home

Quality of Care CIAsQuality of Care CIAs

�� Policy and Procedure defining role of Medical Policy and Procedure defining role of Medical

DirectorsDirectors

�� Training must be competencyTraining must be competency--based based

�� Reportable events include insolvencyReportable events include insolvency

�� Certification from President/CEO/Board of Certification from President/CEO/Board of

DirectorsDirectors

�� Meeting with OIG after each annual report Meeting with OIG after each annual report

Comments from Nursing Homes Comments from Nursing Homes

under CIAsunder CIAs

�� CEOs of nursing home chains under Quality of CEOs of nursing home chains under Quality of

Care CIAs have reported to the OIG that Care CIAs have reported to the OIG that

providing good quality:providing good quality:

�� Improved reputationImproved reputation

��Decreased exposure to liabilityDecreased exposure to liability

�� Increase staff retentionIncrease staff retention

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Compliance GuidanceCompliance Guidance

�� Draft Supplemental OIG Nursing Home Draft Supplemental OIG Nursing Home

Compliance GuidanceCompliance Guidance

�� April 16, 2008 Notice with Draft CPGApril 16, 2008 Notice with Draft CPG

�� Expanded discussion of risk areasExpanded discussion of risk areas

�� Comments due by June 2, 2008Comments due by June 2, 2008

Gainsharing & Gainsharing &

PayPay--forfor--PerformancePerformance

�� What does gainsharing and payWhat does gainsharing and pay--forfor--performance performance

have to do with quality of care?have to do with quality of care?

�� Underlying premiseUnderlying premise

�� Money drives performanceMoney drives performance

�� Common elementsCommon elements

�� Developing performance targets or criteriaDeveloping performance targets or criteria

�� Utilizing objective standards and performance measuresUtilizing objective standards and performance measures

�� Creating or aligning financial incentivesCreating or aligning financial incentives

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What is Gainsharing?What is Gainsharing?

�� Covers a host of different approachesCovers a host of different approaches

�� Typically involves payments from hospital to Typically involves payments from hospital to physician for designing and/or implementing physician for designing and/or implementing programsprograms

�� To improve the quality of care; and To improve the quality of care; and

�� To control hospital costs.To control hospital costs.

�� Gainsharing is designed to try to align the Gainsharing is designed to try to align the financial interests of hospitals and physicians.financial interests of hospitals and physicians.

�� Gainsharing is a subset of payGainsharing is a subset of pay--forfor--performanceperformance

Criteria for EvaluatingCriteria for Evaluating

PayPay--forfor--Performance SystemsPerformance Systems

�� Additional CostAdditional Cost

�� Over, Under, and MisOver, Under, and Mis--UtilizationUtilization

�� Quality of CareQuality of Care

�� Access to CareAccess to Care

�� Patients’ Freedom of ChoicePatients’ Freedom of Choice

�� CompetitionCompetition

�� Exercise of Professional JudgmentExercise of Professional Judgment

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Applicable StatutesApplicable Statutes

�� AntiAnti--kickback statutekickback statute

�� Stark physician selfStark physician self--referral lawreferral law

�� Civil money penalty against hospital payments to Civil money penalty against hospital payments to

reduce or limit servicesreduce or limit services

AntiAnti--Kickback StatuteKickback Statute

�� Prohibited ConductProhibited Conduct

�� Knowing & willfulKnowing & willful

�� Solicitation or receipt Solicitation or receipt oror

�� Offer or payment ofOffer or payment of

�� RemunerationRemuneration

�� In return for referring a Federal health care program In return for referring a Federal health care program patient, patient, oror

�� To induce the purchasing, leasing , To induce the purchasing, leasing , oror arranging for arranging for or recommending purchasing or leasing items or or recommending purchasing or leasing items or services paid by a Federal health care program.services paid by a Federal health care program.

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AntiAnti--Kickback StatuteKickback Statute

�� PenaltiesPenalties

�� Criminal fines & imprisonmentCriminal fines & imprisonment

�� Civil money penalty of $50,000 Civil money penalty of $50,000 plus plus 3X the amount 3X the amount

of the remuneration of the remuneration

�� ExclusionExclusion

�� False Claims Act liability?False Claims Act liability?

Stark Physician SelfStark Physician Self--Referral Referral

ProhibitionProhibition

�� Physician may not refer:Physician may not refer:

�� Medicare [or Medicaid] patientsMedicare [or Medicaid] patients

�� For “designated health services”For “designated health services”

�� to an entity with which the physician to an entity with which the physician oror

�� an immediate family member has an immediate family member has

�� a “financial relationship”a “financial relationship”�� Ownership interest through equity or debtOwnership interest through equity or debt

�� Compensation arrangementCompensation arrangement

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Stark (cont.)Stark (cont.)

�� Unless an exception applies:Unless an exception applies:

�� EmploymentEmployment

�� Personal services arrangementPersonal services arrangement

�� Fair market valueFair market value

�� Indirect compensation arrangementIndirect compensation arrangement

Stark (cont.)Stark (cont.)


�� Denial of Payment (from anyone)Denial of Payment (from anyone)

�� $15,000 per service$15,000 per service

�� 2X damages2X damages

�� ExclusionExclusion

�� False Claims Act liability?False Claims Act liability?

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Civil Monetary Penalty Civil Monetary Penalty

–– Reduce or Limit ServicesReduce or Limit Services

�� Prohibited ConductProhibited Conduct

�� Hospital knowingly making payments, Hospital knowingly making payments, directly or directly or indirectlyindirectly, to physician as an inducement to reduce , to physician as an inducement to reduce

or limit services to Federal health care program or limit services to Federal health care program

patient under the physician’s care.patient under the physician’s care.


�� Civil Money Penalty of $2,000 per patient covered Civil Money Penalty of $2,000 per patient covered

by the improper paymentby the improper payment

�� Both Hospital and Physician liableBoth Hospital and Physician liable

Special Advisory BulletinSpecial Advisory Bulletin

on Gainsharingon Gainsharing

�� 64 Fed. Reg. 37,985 (July 14, 1999)64 Fed. Reg. 37,985 (July 14, 1999)

�� OIG said: “appropriately structured gainsharing OIG said: “appropriately structured gainsharing

arrangements may offer significant benefits.”arrangements may offer significant benefits.”

�� OIG seemed to say all gainsharing arrangements OIG seemed to say all gainsharing arrangements

between hospitals and physicians were impermissiblebetween hospitals and physicians were impermissible

�� Violated CMP against hospital payments to reduce or limit Violated CMP against hospital payments to reduce or limit

servicesservices

�� OIG said it could not provide “any regulatory relief ... OIG said it could not provide “any regulatory relief ...

absent further authorizing legislation.”absent further authorizing legislation.”

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Gainsharing Advisory OpinionsGainsharing Advisory Opinions

�� OIG has issued 10 advisory opinions on OIG has issued 10 advisory opinions on

gainsharinggainsharing

�� 0101--01, 0501, 05--01, 0501, 05--02, 0502, 05--03, 0503, 05--04, 0504, 05--05, 0505, 05--06, 0606, 06--

22, 0722, 07--21, and 0721, and 07--2222

�� Facts and analysis are virtually identical in each Facts and analysis are virtually identical in each

advisory opinion.advisory opinion.

�� Typically involve cardiac surgeryTypically involve cardiac surgery

�� Series of cost saving recommendationsSeries of cost saving recommendations


–– CMP AnalysisCMP Analysis�� Virtually all cost savings recommendations could Virtually all cost savings recommendations could induce physicians to reduce or limit current medical induce physicians to reduce or limit current medical practices at the hospital.practices at the hospital.

�� Ignored whether current medical practices at hospital Ignored whether current medical practices at hospital were consistent with what is medically necessarywere consistent with what is medically necessary

�� OIG identified safeguards:OIG identified safeguards:�� Identified Cost Savings. Specific costIdentified Cost Savings. Specific cost--saving actions and saving actions and resulting savings were clearly and separately identified to resulting savings were clearly and separately identified to allow public scrutiny and individual physician accountability. allow public scrutiny and individual physician accountability.

�� Credible Medical Support. Credible medical support that Credible Medical Support. Credible medical support that cost savings recommendations would not adversely affect cost savings recommendations would not adversely affect patient care. Plus, periodic reviews of impact on clinical carepatient care. Plus, periodic reviews of impact on clinical care..

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Gainsharing Advisory Opinions Gainsharing Advisory Opinions

–– CMP AnalysisCMP Analysis�� Limited Impact on Federal Health Care Programs. Payments based Limited Impact on Federal Health Care Programs. Payments based on on surgeries regardless of payor. Federal health care program procsurgeries regardless of payor. Federal health care program procedures edures subject to cap. Cost savings based on actual acquisition costs.subject to cap. Cost savings based on actual acquisition costs.

�� Protections Against Inappropriate Reductions in Service. BaseliProtections Against Inappropriate Reductions in Service. Baseline ne thresholds established through the use of objective historical athresholds established through the use of objective historical and clinical nd clinical measures to protect against inappropriate reductions in service.measures to protect against inappropriate reductions in service.

�� Savings from Inherent Clinical and Fiscal Value. Savings from pSavings from Inherent Clinical and Fiscal Value. Savings from product roduct standardization based on “inherent clinical and fiscal value.” standardization based on “inherent clinical and fiscal value.” Physicians Physicians would have access to the same selection of devices. would have access to the same selection of devices.

�� Patient Disclosure. Hospital and the physician groups provide pPatient Disclosure. Hospital and the physician groups provide patients atients with written disclosures about the arrangements.with written disclosures about the arrangements.

�� Limits on Incentives. Financial incentives reasonably limited iLimits on Incentives. Financial incentives reasonably limited in duration n duration and amount.and amount.

�� Protections Against Disproportionate Cost Savings. Physician grProtections Against Disproportionate Cost Savings. Physician groups oups distribute profits on a per capita basis, thus limiting any incedistribute profits on a per capita basis, thus limiting any incentive for ntive for individual physicians to generate disproportionate cost savings.individual physicians to generate disproportionate cost savings.


–– AKS AnalysisAKS Analysis

�� No Safe Harbor protection because percentageNo Safe Harbor protection because percentage--based based compensation not set in advancecompensation not set in advance

�� OIG warned payments could be used to disguise illegal OIG warned payments could be used to disguise illegal remuneration encouraging physicians to admit more remuneration encouraging physicians to admit more federal health care program patients to hospitalfederal health care program patients to hospital

�� OIG approval based on low risk of fraud and abuseOIG approval based on low risk of fraud and abuse�� Reduced likelihood arrangement would be used to attract Reduced likelihood arrangement would be used to attract referring physicians or to increase referrals from existing referring physicians or to increase referrals from existing physicians:physicians:�� arrangements are limited to physicians on hospital’s medical staarrangements are limited to physicians on hospital’s medical staff; ff;

�� savings derived from procedures for federal health care program savings derived from procedures for federal health care program patients are capped based on prior year’s admissions; and patients are capped based on prior year’s admissions; and

�� arrangements are limited to one year.arrangements are limited to one year.

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–– AKS AnalysisAKS Analysis

�� Profits within group are distributed on per capita Profits within group are distributed on per capita basisbasis�� Eliminates risk arrangements would be used to reward Eliminates risk arrangements would be used to reward nonnon--surgeons for referring patients to the surgeon groups surgeons for referring patients to the surgeon groups

�� Minimizes incentive for individual physicians to Minimizes incentive for individual physicians to inappropriately reduce services because inappropriately reduce services because

�� Payments are limited in amount, duration, and Payments are limited in amount, duration, and scope. scope. �� Particular actions that would generate cost savings are Particular actions that would generate cost savings are described.described.

�� Physicians may have some increased malpractice liability Physicians may have some increased malpractice liability risk from making costrisk from making cost--saving changes and it is reasonable saving changes and it is reasonable to compensate them. to compensate them.


–– Stark AnalysisStark Analysis

�� Outside OIG’s AuthorityOutside OIG’s Authority�� No positionNo position

�� Position of CMS unclearPosition of CMS unclear�� Preamble to Phase III raised concernsPreamble to Phase III raised concerns

�� In discussing proposed change to “set in advance” In discussing proposed change to “set in advance” definition, CMS stated: “Percentagedefinition, CMS stated: “Percentage––based based compensation, other than compensation based on compensation, other than compensation based on revenues directly resulting from personally performed revenues directly resulting from personally performed physician services…is not considered set in advance.”physician services…is not considered set in advance.”

�� Arguably would prohibit gainsharingArguably would prohibit gainsharing

�� Preamble to Proposed Hospital IPPS regulation seeks Preamble to Proposed Hospital IPPS regulation seeks comments about need for gainsharing exceptioncomments about need for gainsharing exception

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Analytical Framework Analytical Framework

for Payfor Pay--forfor--PerformancePerformance

�� Structural IssuesStructural Issues

�� Implicate antiImplicate anti--kickback lawkickback law

�� Stark exceptionStark exception

�� Incentive designIncentive design

�� Implicates CMPImplicates CMP

�� Depends on who is paying the incentiveDepends on who is paying the incentive

Incentive DesignIncentive Design

�� Clearly permissible benchmarksClearly permissible benchmarks

�� Patient satisfaction levelsPatient satisfaction levels

�� OnOn--time surgery startstime surgery starts

�� Low complication ratesLow complication rates

�� Timeliness of drug ordersTimeliness of drug orders

�� Timeliness of paperwork (Timeliness of paperwork (e.g.e.g., H&P), H&P)

�� Mortality/Morbidity MeasuresMortality/Morbidity Measures

28

Incentive DesignIncentive Design

�� Clearly problematic criteriaClearly problematic criteria

�� Shortened length of stayShortened length of stay

�� Levels of ancillary testingLevels of ancillary testing

�� Costs associated with patient careCosts associated with patient care

�� Open issuesOpen issues

�� Following treatment protocolsFollowing treatment protocols

�� Meeting aggregate budget goalsMeeting aggregate budget goals

PayPay--forfor--Performance Performance

–– Current InitiativesCurrent Initiatives

�� Private sectorPrivate sector

�� Bridges to ExcellenceBridges to Excellence

�� LeapfrogLeapfrog

�� PrometheusPrometheus

�� Government initiativesGovernment initiatives

�� Premier Hospital Quality Incentive DemonstrationPremier Hospital Quality Incentive Demonstration

�� Physician DemonstrationPhysician Demonstration

�� Hospital/Physician Gainsharing DemonstrationHospital/Physician Gainsharing Demonstration

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The Future of Gainsharing The Future of Gainsharing

& Pay& Pay--forfor--PerformancePerformance

�� Continued growthContinued growth

�� Recognition of the value in aligning the interests of Recognition of the value in aligning the interests of

hospitals and physicianshospitals and physicians

�� MedPAC has endorsed gainsharingMedPAC has endorsed gainsharing

�� Need more clarity/flexibility about fraud and Need more clarity/flexibility about fraud and

abuse implicationsabuse implications

�� CMPCMP

�� Stark Stark

Questions?Questions?

Katie Arnholt, OIG/HHSKatie Arnholt, OIG/HHS

Jacqueline C. Baratian, Alston & Bird, LLPJacqueline C. Baratian, Alston & Bird, LLP

William Mathias, Ober|KalerWilliam Mathias, Ober|Kaler

Documents

Quality of Care Initiatives Gaining Momentum of Care... · Quality of Care Initiatives Gaining Momentum ... Creating or aligning financial incentives. 19 What is Gainsharing? Covers