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OIG allows gainsharing arrangements involving surgical devices

Device Regulation Alert: Safety, Compliance and Reimbursement News, February 18, 2008

The OIG gave a green light to two arrangements in which physician groups agreed to help a hospital cut costs in exchange for a share of the cost-savings.

One arrangement involved anesthesiologists providing services during cardiac surgeries and the other involved cardiac surgeons performing certain cardiac surgeries. In both, the physicians agreed to help cut costs by changing operating room practices to reduce use of medical supplies and prevent waste.

Among those changes, the cardiologists agreed to use certain supplies "as needed" and substitute less costly products where possible. Most importantly for the device industry, the cardiologists agreed to work with the hospital to evaluate potential cardiac devices and designate certain devices as the standard product to be used where medically appropriate.

The anesthesiologists similarly agreed to make operating room procedural changes such as using a specific brain function monitoring device "as needed." The anesthesiologists also agreed to product substitution and standardization where medically appropriate.

The OIG said these arrangements normally would run afoul of the anti-kickback and Civil Money Penalty laws. However, the OIG said it wouldn't take action in these cases and would allow the arrangements because of certain safeguards the parties put in place.

Next week, we'll explain why these arrangements could have gotten the hospitals and physicians in trouble and what they did that made the OIG give them a pass.

You can view both Advisory Opinions, 07-21 and 07-22, on the OIG's Web site.

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