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CMS-1403-FC
N. Physician Self-Referral and Anti-Markup Issues
1. Exception for Incentive Payment and Shared Savings
Programs (§411.357(x))
a. Introduction
In the CY 2009 PFS proposed rule (73 FR 38502), we
proposed a new exception to the physician self-referral law
for incentive payment and shared savings programs. The
proposed exception covered various types of hospital-
sponsored pay-for-performance (P4P), shared savings (for
example, gainsharing), and similarly-styled programs that
offer financial incentives to physicians intended to foster
high quality, cost-effective care. The exception, as
proposed, would provide more flexibility than existing
physician self-referral exceptions available for such
programs (73 FR 38548).
When establishing a new exception to the physician
self-referral law, we rely on the authority granted to us
in section 1877(b)(4) of the Act, which mandates that
financial relationships permitted under an exception, such
as the types of compensation arrangements contemplated by
the proposed exception, not pose a risk of program or
patient abuse. As described more fully in the CY 2009 PFS
proposed rule, in order to ensure that we did not exceed
this authority, the proposed exception was targeted and
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