8Published by Becker’s Hospital Review
The Office of Inspector General (“OIG”) released a favorable Advisory Opinion (No. 17-09)1 on January 5, 2018 with regards to an arrangement (“Arrangement”) in which neurosurgeons (“Neurosurgeons”) will utilize cost-reduction measures for certain spinal fusion surgeries performed at a non-profit acute care hospital (“Medical Center”) and the resulting shared savings split between the two parties.
Under the Arrangement, the Medical Center through a subsidiary (“Subsidiary”) will compensate the Neurosurgeons a portion of three years of cost savings attributable to changes the Neurosurgeons make when selecting and utilizing products during spinal fusion surgeries.
The Advisory Opinion analyzed whether or not the OIG would pursue sanctions associated with: “the civil monetary penalty provision for a hospital’s payment to a physician to induce the reduction or limitation of medically necessary services to Medicare or Medicaid beneficiaries under the physician’s direct care, sections 1128A(b)(1)-(2) of the Social Security Act (the “Act”); or (ii) the exclusion authority at section 1128(b)(7) of the Act, or the civil monetary penalty provision at section 1128A(a)(7) of the Act, as those sections relate to the commission of acts described in section 1128B(b) of the Act, the anti-kickback statute.”1
According to the Advisory Opinion, the OIG would not impose sanctions for the Arrangement as the subject requestors certified that cost reduction measures will not reduce or limit medically necessary services for the spinal fusion surgery patients, and that the Arrangement is monitored by the program administer (“Program Administrator”) by analyzing and tracking quality of patient care, changes in cost/ resource utilization, and reports the findings quarterly to the program committee (“Program Committee”). In addition, the OIG noted that the methodology utilized to develop the cost-savings recommendations, the monitoring and documentation safeguards in place, and the methodology utilized to calculate each performance year’s cost savings are reasonable.