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Since the hospital prospective payment system ("PPS") was introduced in the mid-1980s, hospitals have been trying to develop a means by which they can align their financial incentives with those of their physicians. PPS limits hospitals to a fixed reimbursement amount based on diagnosis, with some adjustment based on the resources used by the patients under certain limited circumstances. However, physicians remain reimbursed based on a fee schedule, so that the more they do, …

…and to develop a strategy for dealing with the self-referral and anti-kickback statutes. References: Gosfield, Alice G (2003). The STARK TRUTH About the STARK LAW. American Academy of Family Physicians. Family Practice Management - November/December 2003. Imberman, Woodruff (1995). Improving Plant Performance Through Gainsharing. Journal JOM, 47 (7) p. 57. Kahn-Kothmann, Andrea M (2000). Civil enforcement of fraud and abuse laws. Physician's News Digest. October 2000. Sadin, Shelley R (2002). Health Care Referrals Civil And Criminal Enforcement. Zeldes, Needle & Cooper, PC.