CMS Gainsharing Demonstration Less Draconian than Expected

The pilot gainsharing program CMS has created will not, as industry had feared, reward doctors and hospitals for restricting use of certain devices or choices of brands of devices, according to Mark Wynn, PhD, of CMS. Wynn is director of CMS's Division of Payment Policy Demonstrations. He spoke at the Medical Device Manufacturers Association annual meeting in June.

Speculation had been that gainsharing would involve paying caregivers who bought from the suppliers of only the lowest-cost devices and withholding rewards from those who wanted to use other firms' products. This was the model suggested by the Office of Inspector General when legislation authorizing the program was being drafted. But that will not be the model CMS will follow, said Wynn.

Gainsharing is defined as “a hospital providing incentive payments to physicians as a share of savings incurred from collaborative efforts between the hospital and the physician to improve quality and efficiency,” he said. At its core, it has nothing to do with restricting choice. And the CMS demonstration will not do so, he said. Instead, the focus will be on improving quality.

“CMS seeks a broad, quality-focused approach,” he said. These could include encouraging faster diagnoses and shorter lengths of stay, reducing surgical infections and complications, and reducing duplicate or marginal tests. In addition, it could also encompass more-efficient uses of ORs and ICUs, adoption of new innovative technologies, and improvements in care coordination and discharge planning.”

Participating hospitals will be required to have oversight committees. These committees will include consumer representatives and will focus on monitoring quality and operations, Wynn said. They will be required to report quality measures to CMS and will be allowed to disburse payments only to physicians who contribute to quality efforts, he added. CMS will not be paying doctors directly. Rather, it will be up to the hospitals to decide how to distribute the reward payments.

MDMA executive director Mark Leahey said he remains concerned about how CMS will measure quality. “It has to be patient-focused,” he said.

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