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DOJ won't challenge hospital 'gainsharing' proposal in NY

January 25, 2013


The Department of Justice’s (DOJ) Antitrust Division does not intend to challenge a Greater New York Hospital Association (GNYHA) proposal to offer a “gainsharing” program to member hospitals, the department said recently after reviewing the proposal at the association’s request.

DOJ said that under the program, physicians could receive a share of the savings generated from reducing costs for treating commercial health insurance and Medicaid and Medicare managed care patients if the physicians meet hospital-specific quality standards.

In a Jan. 16 letter to GNYHA, the department said that the proposed program, which is structured to comply with relevant fraud and abuse laws as well as antitrust laws and includes extensive program integrity controls, should not adversely affect competition because hospitals will not exchange any confidential information and each hospital will independently determine physician gainsharing amounts.

Organizations may submit proposed actions to the Antitrust Division for review and receive a statement as to whether the division intends to challenge the described action under the antitrust laws. In the letter, William J. Baer, the assistant attorney general in charge of DOJ’s antitrust division, said, based on GNYHA's representations, the proposed information sharing program is “unlikely to facilitate collusion or otherwise raise competitive concerns.”

The department said its decision not to challenge the formation or operation of the program was based on “the program participants’ refraining from exchanging competitively sensitive information and … program provisions related to physician payment caps and fair market value analysis being reasonably necessary to further the procompetitive purposes of the gainsharing program.”

According to the letter, GNYHA has registered 11 member hospitals to participate. For more on DOJ’s letter, click on: http://tinyurl.com/aam2cfc.