On January 16, the Department of Justice’s Antitrust Division (“DOJ”) announced that it does not presently intend to challenge the Greater New York Hospital Association’s (“GNYHA”) proposed gainsharing program. The program was designed to provide a framework for participating hospitals to measure physician performance against certain benchmarks and award bonuses to physicians for quality and efficiency improvements. The DOJ concluded that the program neither constitutes a horizontal agreement on compensation levels nor an exchange of information that would facilitate anticompetitive coordinated limits on physician compensation.

GNYHA is a trade association with 250 hospital and continuing care facility members in New York and several nearby states. GNYHA wrote to the DOJ seeking a business review of its proposed voluntary gainsharing program for its 100 New York hospital members. Gainsharing programs incentivize physicians to consider their use of hospital resources in decision-making by rewarding them with a “share” of the “gain” that results from increased efficiency. GNYHA explained that its program is based upon Medicare’s gainsharing programs and differs primarily in that its application is broader than just Medicare products.