This week the Office of Inspector General published an interesting Advisory Opinion (AO 12-22) dealing with a cardiology co-management agreement between a hospital and a private cardiology group practice.

Under the arrangement, the hospital would compensate the physicians for certain management, oversight, strategic planning and medical direction services in connection with the hospital’s four catheterization labs.

The Compensation payable to the physicians would consist of a fixed guaranteed amount and potential performance bonuses based on achieving specific patient satisfaction, quality and cost-saving targets.

Based on a number of safeguards within the arrangement, including that the bonus criteria were developed by a committee including providers outside the cardiology group and that the group’s performance and compensation would be reviewed by an independent consultant, the OIG stated that it would not impose sanctions on the requesting parties.

Although the Advisory Opinion is fact specific, as one of the first opinions dealing with co-management arrangements, it offers providers significant insight into how the OIG is likely to view these types of arrangements going forward.

The federal government was apparently not kidding when it said it planned to take a closer look at physician/hospital arrangements.  According to a recent Department of Justice Press Release, the DOJ has elected to intervene in a whistle-blower lawsuit against Christ Hospital and the Ohio Heart Health Center, a large cardiology group in Ohio. The lawsuit alleges that the hospital and the cardiology group entered into an arrangement that provided the cardiologists improper financial incentives in exchange for generating revenue for the hospital through the hospital’s outpatient cardiology testing center. This suit was originally filed by a cardiologist who had provided services to Christ Hospital and Ohio Heart. The lawsuit alleges that cardiologists were allocated time at the Hospital’s heart station based on the number of cardiac services they generated for the Hospital in the prior year.

This is only one of what can expected to be a slew of these types of cases as enforcement authorities tune in to the creative ways in which hospitals and physicians have been teaming up over the last few years.  Physicians who have financial arrangements with their hospitals should take a close look at those arrangements for compliance with current regulatory requirements.