DOJ Issues Business Review Letter Regarding Hospital-Physician Gainsharing Program

By on January 22, 2013

by Stephen Wu

On January 16, the U.S. Department of Justice Antitrust Division issued a Business Review Letter in which it disclosed its intention not to challenge the Greater New York Hospital Association’s (GNYHA) voluntary "gainsharing" program for its hospital members and the physicians who practice at their hospitals. 

GNYHA’s program is designed to encourage physicians to become more cost-conscious in their treatment decision-making and reward them for greater efficiency.  Important aspects of the program include:

  • that it is non-exclusive and voluntary;
  • each participating hospital will have its own quality-standards;
  • it will apply to commercial health insurance and Medicaid and Medicare managed care products;  
  • each hospital will choose how much savings to share with its physicians (or none at all) subject to other regulatory requirements; and
  • the information that will be shared among GNYHA members is already publicly available.

The Antitrust Division concluded that the program was neither an agreement among competitors to set physician compensation levels nor an anticompetitive information exchange.

The Antitrust Division’s business review letter should provide guidance to hospitals and physicians looking to reduce costs of care.  Importantly, however, the program and the Antitrust Division’s business review letter only addressed gainsharing between hospitals and their physicians and not joint contracting or "clinical integration" arrangements among competing providers, for example. 

To read the Antitrust Division’s press release, click here.

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