Last week the Department of Justice (DOJ) announced that it will not challenge a proposal by the Greater New York Hospital Association (GNYHA) to offer a gainsharing program to its member hospitals in the state.
In August 2012, the GNYHA submitted a business review request to the DOJ for the voluntary program that would apply to commercial health insurance, as well as Medicare and Medicaid managed care products. GNYHA is a trade association of hospitals and continuing care facilities in New York and several nearby states. The voluntary gainsharing program will be made available to approximately 100 member hospitals in New York.
According to a letter from the DOJ, it will not challenge the GNYHA proposal because the program will not adversely affect competition since the hospitals will not exchange any confidential information and each hospital will independently determine physician gainsharing amounts.
"Based on GNYHA's representations, the proposed information sharing program is unlikely to facilitate collusion or otherwise raise competitive concerns," said DOJ Assistant Attorney General Bill Baer in a letter from the DOJ dated Jan. 16, 2013.
According to a DOJ press release, an independent contractor for GNYHA will calculate a state-wide best practice norm for certain groups of treatments or procedures using publicly available and historical patient discharge data. Physicians who meet the hospital-established quality standards and also reduce costs to the hospital could receive a share of their savings.
Each hospital's payment amounts to physicians will be limited by a cap that each participating hospital must independently establish, according to the press release. The cap must comply with all applicable fraud and abuse regulations. Additionally, the GNYHA reserves the right to exclude any hospital from the program if the GNYHA believes that the hospital's proposed cap does not comply with those laws and regulations.
So far, 11 of the GNYHA's member hospitals have registered for the gainsharing program, according to the DOJ letter.