Gainsharing: a cost-reduction strategy that may be back.

The HHS Office of Inspector General (OIG) seemingly has reversed its formerly unwavering prohibition on gainsharing arrangements. In Advisory Opinion 01-1, the OIG approved an arrangement between a hospital and a physician group targeted at reducing operating expenses as long as they adopted appropriate safeguards to protect against Federal healthcare-program fraud and abuse. With similar approval, hospitals could take advantage of this opportunity to enter into their own gainsharing arrangements with physicians. There are, however, limitations that should be considered when structuring any preliminary gainsharing initiatives. Several Federal laws already exist that define and restrict gainsharing arrangements.