Physician Payment Sunshine Act: CMS Releases User Guide for Industry

This week, the Centers for Medicare & Medicaid Services (CMS) published a “User Guide For Industry” regarding its Open Payments program—also known as the Physician Payments Sunshine Act. Interestingly, the subtitle of the guide is, “Creating Public Transparency Into Industry-Physician Financial Relationships.”

Below is a brief overview of the guide and a summary of some of the sections we found relevant. Much of the information is not new; nor does it include new interpretations or incorporations of the FAQs CMS has published over the last several weeks.

CMS stated that subsequent User Guides for teaching hospitals and physicians will be released shortly.

CMS includes a disclaimer on the front page informing the public that the guidance document contains “informational material for industry on Open Payments,” and although “every reasonable effort was made to assure the accuracy of the information, it is the responsibility of the industry user to ensure adherence to the requirements.” Thus, CMS concludes that the Guide is “not intended to supplement or replace[] the final rule.”

The guide includes “definitions, descriptions, screenshots, tables, tools, and tips designed to assist medical industry manufacturers and group purchasing organizations (GPOs) to better understand the rules and comply with OPEN PAYMENTS, including how to operationalize collecting and reporting data.” The guide, is broken into the following chapters:

• Introduction
  
• General Payments Data Collection
  
• Research Payments Data Collection
  
• Physician Ownership or Investment Interests Data Collection
  
• Registration
  
• Submission and Attestation
  
• Dispute and Resolution
  
• Audits
  
• Non-compliance Penalties and Appeals
  
• Additional Information and Resources
  

The current version of the guide only includes information on the first four (4) bullet points noted above; CMS will likely be adding to the guide in the coming weeks, which may seem problematic given that reporting has already begun.

CMS reiterated in the opening section of the guide that the purpose of Open Payments is to “increase access to and knowledge about these relationships and to provide information to enable consumers to make informed decisions.” Yet, CMS reiterates that “disclosure of the financial relationships between the medical industry and healthcare providers is not intended to signify an inappropriate relationship,” and recognizes that “collaborations among the medical industry, physicians, and hospitals contribute to the design and delivery of life-saving drugs and devices.”

Nevertheless, CMS states that such relationships may “influence research, education, and clinical decision-making in ways that compromise clinical integrity and patient care and may potentially lead to increased health care costs.”

The agency again acknowledges that physicians and hospitals are not required to report in the program, but CMS “encourages” their participation by “reviewing data reported about them to ensure the accuracy of the information.” CMS also “encourages” the “general public and healthcare consumers to access, review, and utilize the data to make informed health care decisions.”

Applicable Manufacturers and Applicable GPO’s

CMS created a two (2) useful charts (one for manufacturers and one for GPOs) and an eight (8) step process for determining whether an entity is an “applicable” manufacturer or group purchasing organization (GPO) required to report. The eight steps are as follows:

Step 1: Determine if the entity operates in the United States (includes any territory, possession or commonwealth of the United States)

Step 2: Determine if the entity engages in activities of a Type 1 or Type 2 applicable manufacturer

Step 3: Determine if the entity’s products are covered drugs, devices, biological, or medical supplies or covered products

Step 4: If the entity possesses the characteristics illustrated in CMS’ figure, the entity is determined to be an applicable manufacturer in OPEN PAYMENTS. 

If the entity does not meet these characteristics, the entity is not determined to be an applicable manufacturer. Note: the entity still may be an applicable GPO in OPEN PAYMENTS.

Proceed to step 5 to determine if the entity is an applicable GPO.

Step 5: Determine if the entity operates in the United States (includes any territory, possession or commonwealth of the United States)

Step 6: Determine if the entity engages in activities of an applicable GPO

Step 7: Determine if the entity’s products are covered drugs, devices, biological, or medical supplies or covered products

Step 8: If the entity possesses the characteristics illustrated in CMS’ figure, the entity is determined to be an applicable group purchasing organization (GPO) in OPEN PAYMENTS.

If the entity does not possess the characteristics, the entity is not determined to be an applicable GPO in OPEN PAYMENTS

General Payments

CMS next provides information on the “general payments” or non-research payments, manufacturers and GPOs must collect and report. This chapter is organized in categories shown in the bulleted list of categories below for specific data elements and contains guidance and instructions for reporting General Payments made by applicable manufacturers and applicable GPOs to recipient physicians and teaching hospitals as defined in.

• Submission File Information contains metadata elements collected to properly identify and attribute submitted files.
  
• Recipient Demographic Information identifies the recipient of the payments or other transfers of value.
  
• Associated Drug, Device, Biological or Medical Supply Information identifies the drug, device, biological or medical supply that is related to the payments or other transfers of value.
  
• Payment or Transfer of Value Information specifies information regarding the payments or other transfers of value.
  
• General Record Information captures other general information about the payments or other transfers of value.
  

The tables provided by CMS in this reporting category are extremely useful and user friendly. They break down the data entry elements and categories that stakeholders must begin to use for reporting and are not as overwhelming as the actual templates themselves. Some interesting observations from the new guide include:

• CMS again reiterates the use of the National Plan & Provider Enumeration System (NPPES) for physician Name, specialty, and NPI Number. This reiterates the points that physicians should go to the NPPES website (click here) to ensure their information is accurate
  
• CMS reiterates that applicable manufacturers and GPOs should collect the email address of physicians, although optional, to allow CMS to contact physicians that have not already registered and notify these physicians regarding information submitted about them.
  

• Physician Primary Type: applicable manufacturers and GPOs must report the “primary type of medicine practiced by the physician” which includes:
  
  • Doctor of Medicine/Osteopathy
    
  • Doctor of Dental Surgery/Dental Medicine
    
  • Doctor of Podiatric Medicine
    
  • Doctor of Optometry
    
  • Licensed Chiropractor
    

Number of Payments Included in Total Amount: CMS indicates that in the data template, applicable manufacturers and GPOs must report “the number of payments provided to a covered recipient or physician owner/investor if an applicable manufacturer or applicable GPO provided the payment or other transfer of value in a series of payments.” The Guide says: “Report one (1) if a payment or other transfer of value was only provided once to a covered recipient or physician owner or investor as opposed to a series of payments.”

It is important for stakeholders to remember, however, that in the final rule, CMS finalized that “applicable manufacturers have flexibility in reporting small payments.”  They may either report them individually or bundled with other small payments or other transfers of value in the same nature of payment category, as long as applicable manufacturers are reporting consistently and clearly indicating the method they are using.

Accordingly, stakeholders will need to pay close attention to consulting and speaking arrangements where a contract may provide for multiple engagements and multiple payments are being made. In other words, a physician may be given a lump sum payment of $5,000 on October 1, 2013. However, he may be speaking five (5) times under that contract. While there may be only one (1) actual payment, it could also be seen as a “series of payments” if the entire lump sum is paid differently (e.g., installments or series). Thus, stakeholders will need to ensure accurate reporting for such activities to ensure compliance with the Open Payments reporting.

Third Party Payments

CMS explains four (4) categories of information regarding third-party payments.

Third Party recipient: either an 1) entity; 2) individual. This applies if the covered recipient or physician owner or investor designated or requested a payment or other transfer of value to be made to a third party, or 3) “No Third Party Payment,” if non was designated or requested to be made to a third party.

Name of the Third Party entity that received the payment or transfer of value

Charity Indicator: “Yes” if the covered recipient or physician owner or investor requested or designated the payment or other transfer of value to be provided to a third party entity that is a charity.

Third Party Equals Covered Recipient Indicator: “Yes” if the covered recipient or physician owner or investor requested or designated the payment or other transfer of value to be provided to an entity or individual that is a covered recipient .

Conclusion

As more CMS guides come out for physicians and teaching hospitals, we will continue to provide links and analysis, as well as any additional FAQs. Interestingly, only time will tell how CMS may treat any errors or problems that manufacturers or GPOs may have given that guidance continues to come from the agency despite reporting having already begun. Will CMS be more lenient on certain errors or mistakes the agency is still clarifying or yet to clarify, or will the agency hold everyone accountable regardless of the additional guidance?