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Basic Legal Issues in Implementing Healthcare Incentives and Pay for Performance Programs

Basic Legal Issues in Implementing Healthcare Incentives and Pay for Performance Programs. National Pay for Performance Summit Los Angeles, CA Tuesday, February 7, 2006. Paul T. Smith, Esq. Davis Wright Tremaine LLP San Francisco, CA. Thomas E. Jeffry, Jr., Esq. Davis Wright Tremaine LLP

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Basic Legal Issues in Implementing Healthcare Incentives and Pay for Performance Programs

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  1. Basic Legal Issues in Implementing Healthcare Incentives and Pay for Performance Programs National Pay for Performance SummitLos Angeles, CATuesday, February 7, 2006 Paul T. Smith, Esq. Davis Wright Tremaine LLP San Francisco, CA Thomas E. Jeffry, Jr., Esq. Davis Wright Tremaine LLP Los Angeles, CA

  2. Overview • Context for P4P • Antitrust • Physician Incentive Programs • Collection and Exchange of Data

  3. A Growing Trend • Many variations; we focus on health plan payments to providers to reward quality • Examples: • Integrated Healthcare Association (California) • Bridges to Excellence (Boston, Cincinnati, Albany) • Leapfrog Group • Medicare

  4. Features • Quality measures • Clinical measures • Screening, immunization and other prevention • Patient satisfaction • Adoption of technology • Payment • Incremental PMPM payment (typically < 5%) • Often competitive • Scorecards

  5. Antitrust • The price-fixing concern • Elements of payment • Measures • Weighting • Payment

  6. Antitrust • The case for collaboration • The MedSouth clinical integration opinion • The FTC/DOJ Report - Improving Health Care

  7. Antitrust • How far is too far? • Measures • Weighting • Payment • Recommended or binding • Possible anti-competitive effects

  8. Physician Incentives • Anti-kickback Laws • Gainsharing • Limitation of Care • Physician incentive plans

  9. Anti-kickback laws • Both federal and state • Prohibits the offer/receipt of remuneration for referrals • Civil penalties and criminal exposure • Exception for managed care

  10. Gainsharing • Alignment of financial incentives to improve efficiencies, increase quality of care, lower costs

  11. Gainsharing • Programs scrutinized by OIG • Acceptable programs • identify specific cost-saving actions • must monitor quality to assure no adverse impact • no cherry-picking incentives • no hidden incentives for individual referrals

  12. Limitation of Care • Civil Monetary Penalties (CMPs) • Prohibits remuneration intended to limit services to Medicare/Medicaid beneficiaries

  13. Physician Incentive Plans • Compensation arrangement that may directly or indirectly have the effect of reducing or limiting services provided with respect to enrolled individuals

  14. Physician Incentive Plans • Contracts with CMPs • no inducement to reduce of limit services • stop-loss if physicians at substantial financial risk • quality assurance/satisfaction survey

  15. Privacy/Confidentiality • Protection of individually identifiable health information • HIPAA allows disclosure to contractor for data aggregation • Permissible use of aggregate data • Reporting to provider and health plan • Disclosure to others • Research • Public scorecards • Collateral uses

  16. Data Collection & Integrity • HIPAA requires reasonable measures to secure electronic data • encryption • physical safeguards • access controls • audits and monitoring

  17. Data Collection & Integrity • Issues • Who collects and verifies data? • How is accuracy of data assured? • Publication of data regarding a specific provider

  18. Paul Smith San Francisco, CA (415) 276-6500 paulsmith@dwt.com Tom Jeffry Los Angeles, CA (213) 633-6800 tomjeffry@dwt.com Questions

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