facing a severe shortage of neurosurgeons did the only thing
it could --it agreed to subsidize malpractice costs for
two neurosurgeons who were thinking of retiring.
unorthodox arrangement could have looked like a kickback,
but the HHS Office of Inspector General said it wouldn't
prosecute the deal in advisory opinion 04-19, published
Jan. 6. The two neurosurgeons unexpectedly lost their malpractice
coverage, and their new insurance company wanted to charge
much higher premiums. Meanwhile, their original insurer
offered to give them free "tail" coverage for
any claims based on prior practice --but only if they retired
immediately. Otherwise, the "tail" coverage would
be quite expensive.
the neurosurgeons from retiring, the local hospital agreed
to pay some of their malpractice coverage costs as long
as they stayed in the area and served the local community.
The payments weren't linked to the surgeons' referrals to
the hospital, and they were free to practice elsewhere in
the area. The hospital had tried --and failed --to lure
other neurosurgeons to the area in time.
were a few factors, besides the urgency, that swayed the
OIG to accept the arrangement. For one thing, even with
the arrangement the physicians' malpractice costs would
be higher than in previous years, so they're not receiving
a windfall. Also, the physicians aren't getting the subsidies
for free, but instead have to provide call coverage, indigent
care and membership on hospital committees. And the malpractice
insurance covers their services at sites other than the
hospital, which reduces the risk that
the subsidy could be linked to referrals.