Physician Payment Sunshine Act: Open Payments May Cause Physicians to Change Company Interactions – Concerns about Accuracy Persist

Under the Physician Payments Sunshine Act (Open Payments), pharmaceutical companies, medical device manufacturers, and medical suppliers were required to start collecting data regarding all payments, gifts, and transfers of value (over $10 or $100 in aggregate) to physicians and teaching hospitals as of August 1, 2013.

The clock is ticking to March 31, 2014, the first annual reporting deadline to the Centers for Medicare and Medicaid Services (CMS), and Policy and Medicine continues to monitor and report developments of interest to various stakeholders. Large corporations have teams of compliance officers working to ensure they meet the requirements under the law, but physicians may be left wondering how Open Payments will affect them, their daily operations, and their bottom line.

Open Payments Overview for Physicians

The CMS stated intent of Open Payments is to provide “a national resource for beneficiaries, consumers, and providers to know more about the relationships among physicians, teaching hospitals, and industry.” 

According to CMS, medical residents are excluded from Open Payments due to the varying laws regarding whether residents can legally practice medicine. Otherwise, a physician subject to Open Payments includes “any of the following types of professionals that are legally authorized to practice, regardless of whether they are Medicare, Medicaid, or Children’s health Insurance Program (CHIP) providers: 

• Doctor of Medicine
• Doctor of Osteopathy
• Doctor of Dentistry
• Doctor of Dental Surgery
• Doctor of Podiatry
• Doctor of Optometry
• Doctor of Chiropractic Medicine 

Nearly all types of compensation are covered, including: consulting, speaker fees, honoraria, gifts, entertainments, food and beverage, travel/lodging, education, research, charitable contributions, ownership or investment interest (including of immediate family members), and grants. Drug samples intended for patient distribution are exempt from reporting to CMS, as are rebates and discounts. The FDA has yet to announce a separate program for sample disclosure.

Implications of Open Payments for Physician Practices

Physicians have an interest in avoiding the perception, or the actual receipt, of kickbacks from manufacturers; and the public should feel confident that the independent judgment of physicians regarding drugs or devices is not compromised by undue compensation. Nevertheless, a physician’s expertise, service, and time are valuable. We recently reported that radiologists are concerned with potential mischaracterizations of relationships with industry, but Open Payments presents concerns for all physicians.

Many physicians factor consulting relationships, continuing medical education and speaking engagements into their annual revenue projections. Concerns about the impact of Open Payments “may cause doctors to change some of their outside activities,” according to author Greg Freeman of HealthLeaders Media.

The responsibility for reporting falls on the manufacturers, but physicians must register with CMS to receive notification of supposed payments received and take advantage of the opportunity to review those payments for accuracy before they are posted to the public on CMS’s website. Because companies are required to report physicians by name, relationships revealed by Open Payments may create the appearance of impropriety even if the physician and the company have done nothing wrong. Also, because the value of paid meals or travel expenses must be noted, a casual reviewer of the future CMS website may misinterpret the reason behind a reported payment. Citing attorney Craig Garner, Freeman notes, “physicians must determine whether they are comfortable having their names listed as receiving money from the company, or whether they can give up that revenue for the sake of appearances.”

There is also concern about the accuracy of payment reports to CMS. Companies have the option to provide physicians with pre-submission opportunity to review payments, but they are not required to do so. Physicians will have 45 days to challenge reported information and an additional 15 days to resolve disputes before CMS publishes the information on the internet; however, in identifying key issues with Open Payments, Health Reform GPS stated that, “unresolved disputes will result in CMS publishing the information submitted by [the company] along with a designation of the information as ‘disputed’ . . . This 45-day period may not provide enough time for parties to resolve disputes.”

Healthcare Technology Online reports that CMS has created two free mobile apps to help address this concern. “The apps – called Open Payments for Physicians — are designed for the tracking of transfers of value in the industry. According to the Medscape Today News article, ‘Physicians are not required to report the receipt of cash, meals, and other forms of industry largesse to CMS, but by voluntarily entering this data in the app, they will be in a better position to double-check industry figures.'”

Physicians are also concerned that Open Payments may affect the quality of care patients receive by limiting information physicians receive from manufacturers. Policy and Medicine recently reported that 74 physician organizations and state medical societies sent a joint letter to the Department of Health and Human Services requesting exemption for certain education materials, citing public health concerns and the need for physicians to have access to the most up-to-date information.

Conclusion

Although a vast majority of patients will likely not seek out the CMS website to investigate their doctor’s financial relationships with drug and device companies, physicians may want to proactively educate patients about Open Payments. Physicians may also want to be prepared to explain their relationships to various companies and emphasize that the relationships do not influence their treatment decisions.

We recently posted links to resources that may help physicians and practice managers seeking to plan for Open Payments reporting. In the coming days, CMS will host regional webinars to provide an overview of Open Payments for associations, medical societies, practitioners, practice managers, and physicians.