Deeper Than the Headlines: Sunshine Payments

$8.18 Billion is a lot of money. It’s not the amount recovered by the government from healthcare fraud and abuse. It’s not the amount of money provided in charity care by hospitals. Surprisingly, it’s the amount of payments that pharmaceutical companies, medical device companies and group purchasing organizations made to physicians and teaching hospitals in the U.S. in calendar year 2016, according to the recently published data from CMS through their Open Payments program. The Open Payments program is also known by many as the “Sunshine law,” designed to provide transparency on the financial interactions between industry and physicians/teaching hospitals. Read more on The Facts About Open Payments Data

The Open Payments program was instituted because of section 6002 of the Patient Protection and Affordable Care Act.  This section requires certain manufacturers (e.g. pharma and medical device) and group purchasing organizations to annually report certain “transfers of value” which not only includes financial payments for things such as consulting or speaking fees but also transfers in kind such as meals, drinks and gifts.

The first reported data was for 5 months at the end of calendar year 2013. After that initial reporting, the data has represented a full calendar year (2014, 2015 and 2016). The data is typically made public on the CMS website in June of the following year so 2016’s data was just recently published.

The initial intent behind the program was to allow patients and any other interested parties in seeing why, for example, Pharma or Medical Device company “X” paid doctor or teaching hospital “Y” a certain amount of money. As doctors and hospitals have decision making power in which drugs or devices get used, many individuals are interested in knowing if financial incentives or payments are influencing those medical decisions.

As a patient, you can look up what payments or transfers of value your physician received in each year. Patients generally want their physicians to make medical decisions and recommendations based on the best science and medical care and many become concerned when financial considerations enter that decision-making process.

According to the data on the CMS website, there are 631,000 physicians that have received at least one transfer of value or payment. Data for teaching hospitals is also reported and 1,146 teaching hospitals received at least one transfer of value. These payments and transfers of value have come from 1,481 companies.

Of the $8.18 Billion reported for 2016, more than half ($4.36 Billion) has been categorized as payments for research. Another $1.02 Billion represents the value of ownership or investment interest that physicians have in these companies and $2.08 Billion was the dollar value of “general” payments which includes payments for travel and lodging, gifts, food and beverage, speaking fees and consulting payments to name some of the various categories reported.

The CMS database contains almost 12 million records published for 2016. Undoubtedly, there can be disputes about the data and who accepted what. Of the total records published, approximately 1,800 were disputed.  Disputed records are still published but they can be identified as disputed.

There is continual debate in the about the influence these transfers of value can have on physicians and teaching hospitals. The Journal of the American Medical Association (JAMA) recently devoted an entire issue (May 2, 2017; Vol. 317, Number 17) to the discussion about conflicts of interest that can arise in this context. There are many interesting viewpoints to consider.

From a compliance officer’s perspective, you want to make sure that transfers of value accepted by your physicians and hospitals are legal, ethical and in many cases where organizations have their own internal policies about such matters, that the transfers of value are in line with the organization's policies.

Additionally, compliance officers are becoming more and more involved in reputational management for their organizations. There are many “watchdog” journalists who review this data and publish stories and which physicians are highest on the list of accepting payments or the most suspect types of payments. For example, if one of your physicians or hospitals accepted a high value gift from a company and that is not in line with the public’s expectations for your institution, a compliance officer may want to understand the details of that transaction sooner rather than later and manage the situation appropriately.

There may be legitimate reasons for giving and accepting certain transfers of value. Similarly, there may be reasons why such transfers of value are inappropriate. Understanding the difference and acting appropriately is important for any compliance program today.