President Obama recently signed into law Public Law No. 114-10, the “Medicare Access and CHIP Reauthorization Act of 2015” (P.L. 114-10), which overhauls Medicare physician reimbursements by eliminating the use of the sustainable growth rate methodology for determining Medicare reimbursement rates for physicians’ services. P.L. 114- 10 also contains an important amendment to the provision of the federal civil monetary penalties law concerning so-called “gainsharing” arrangements found in Section 1128A(b)(1) of the Social Security Act (Gainsharing CMP).

Prior to the passage of P.L. 114- 10, the Gainsharing CMP prohibited hospitals from knowingly making payments, directly or indirectly, to a physician as an inducement to reduce or limit any health services provided to a Medicare or Medicaid beneficiary under the direct care of such physician. P.L. 114- 10 amends the Gainsharing CMP by reducing its scope to apply only to arrangements in which a hospital knowingly induces a physician to reduce or limit medically necessary services to a Medicare or Medicaid beneficiary under the physician’s care. P.L. 114-10’s amendment of the Gainsharing CMP applies to all gainsharing payments made on or after April 16, 2015.