The Office of Inspector General (OIG) issued Advisory Opinion 06-22, which is another in a series of similar approving gainsharing arrangements, i.e., 01-01 and 05-01 through 05-06. Under the current proposed arrangement, a hospital would pay a cardiac surgery group 50 percent of the hospital’s first year cost savings directly attributable to specific changes in the surgical group’s operating room practices, which changes would involve (1) limiting the use of certain surgical supplies, (2) substituting less costly items for items currently being used by the surgeons, and (3) product standardization of certain cardiac devices. As with its earlier gainsharing opinions, the OIG concluded that the proposed arrangement would implicate the civil monetary penalty (CMP) provisions, and would potentially implicate the anti-kickback law, but that the OIG would not impose sanctions under these authorities against the requestors, given the following safeguards:

Civil Money Penalties

(1) The practices and savings would be “clearly and separately identified” allowing “for public scrutiny and individual physician accountability for any adverse effects.”

(2) There was “credible medical support” for that position that the arrangement would “not adversely affect patient care.”

(3) The payments would be based on all surgeries regardless of payor.

(4) The arrangement would protect against “inappropriate reductions in services” by utilizing “objective historical and clinical measures.”

(5) The physicians would nevertheless have the same selection of surgical devices available, regardless of standardization.

(6) Full disclosure of the program would be provided to patients.

(7) The financial incentives under the proposed arrangement would be “reasonably limited in duration and amount.

(8) The surgical group’s profits would be distributed on a per capita basis and, as such, “any incentive for an individual surgeon to generate disproportionate cost savings” would be “mitigated.

Anti-Kickback Law. 

(1) The arrangement would have a one-year term, participation would be limited to surgeons already on the Hospital’s medical staff, and the potential savings derived from procedures for Federal healthcare program beneficiaries would be capped (based on the prior year’s admissions of such beneficiaries).

(2) Because the surgeon group would be composed only of cardiac surgeons, the proposed arrangement could not be used to reward cardiologists or other physicians in a position to make referrals to the surgical group.

(3) Because the cost saving recommendations carry “some increased liability risk for the physicians,” it is “not unreasonable for the surgeon to receive compensation,” particularly where it would be limited in amount, duration, and scope.

Stark Law. 

Finally, as in its earlier gainsharing opinions, the OIG declined to provide any guidance regarding the Stark Law because it is outside the scope of the advisory opinion process.  

The full opinion is available on the OIG website at