Physician Payments Sunshine Act: Communication Key To Maintaining Good Relationships During Open Payments Review and Dispute

Today, June 30, the Centers for Medicare and Medicaid Services (CMS) is set to release the second year of Open Payments data, detailing in a searchable database the transfers of value drug and device manufacturers make to physicians and teaching hospitals. While manufacturers alone are responsible for collecting and reporting this data—and face penalties for non-compliance with the Open Payments requirements—physicians bear a large share of media scrutiny and professional liability for inflated or otherwise inaccurate reports. Thus, CMS allows for a 45-day window after manufacturers submit data and before the data is released to the public for physicians to log-in to Open Payments, review any payments attributed to them, and potentially alert the manufacturers of any misreporting or other issues they find. 

Like many aspects of Open Payments, however, the “review and dispute” process is easier in theory than reality.  Steven Ladd, the President of Primacea, works on behalf of physicians through the process to verify the accuracy of submitted payment data. He has filed several hundred disputes with manufacturers regarding a range of reporting issues. We spoke with Ladd about his experiences, and he highlighted the complexity of the Open Payments system—both on the physician and manufacturer side—and how that impacts the accuracy of the data and in his experience can harm the relationships between industry and physicians.

Problems With Registration

First, Ladd reiterated a familiar problem with the dispute process: it is still very difficult for physicians to register in EIDM and Open Payments—the two steps necessary to simply view attributed payments. Half the time, the system works and physicians can get into the portal in around 30 minutes; for the other half, Ladd says, it can take weeks. While he notes that CMS has worked to improve the system, and that the CMS Help Desk has been a reliable resource, the short time frame for review and the difficulty associated with the process have kept the majority of physicians from even getting into Open Payments in the first place. He noted that some physicians are simply crossing their fingers and hoping payments aren’t incorrectly attributed to them. One frustrated physician said: “I may get crucified for this, but there is nothing I can do about it.” Clearly this is not an enviable position to be in.

One of the things that vexes physicians in registration is that often the “vetting process” for Open Payments—which ostensibly uses the physician identifiers in the NPPES database for identification—rejects a copy-and-pasted version of the NPPES information. Users might be required to wait for a few hours just to find out whether their identifiers were accepted or rejected. Ladd stated that he had to call the Help Desk to override the rejected application after he was unable to match the “invisible characters” of the NPPES information.  Without the help of Ladd, or a similar authorized representative, many physicians do not have the time to attempt multiple log-ins extending over a whole day.

Ladd notes that it will be interesting to see whether CMS reports the number of physicians who successfully registered and viewed their payment data—last year it was only five percent. “Physicians have to be able to look at this, because otherwise they don’t even have a voice in the process,” states Ladd. “The vast majority of physicians cannot get into the system to see their data.” Ladd believes that allowing physicians an easy way to access their payments should be the number one priority. 

Impact on Collaboration

Ladd then expounded upon the impact Open Payments is having on collaborations. He noted that fewer physicians are working with industry, and this is especially true with up-and-coming doctors.  In his experience, many are afraid of doing anything that may be reported in the public database, and some have declined research projects and roles on advisory boards, for example, to protect their reputations against insinuations that they are doing something wrong. This is bad for innovation, notes Ladd, and also unfortunate for these young physicians who are limiting themselves from being on the cutting edge of medical developments.

This year’s reporting cycle apparently has generated more animosity between companies and their physician collaborators. “Multiple physician at the top of their profession have informed companies that as a result of Open Payments disagreements they will no longer be working with them and will be taking their business elsewhere,” states Ladd. Physicians are so concerned that their reputations will be harmed that they are severing long-lasting relationships based on how companies handle reporting.

Often the issue isn’t that physicians do not want their payments in the database—it’s that they want these reports to accurately reflect their engagement with industry.  Ladd brought up two examples in particular that serve to justify their consternation.

The first issue he raised relates to physicians who have made personal investments in startup companies with promising medical technologies. Occasionally these investors see a return on their investment. Ladd noted an example of a physician investing $75,000 who saw his investment grow to $85,000 over a number of years. Often these startups are purchased by larger manufacturers, who then pay investors for their shares. Under Open Payments, because the investor is a physician, the manufacturer must report this transfer. However, the regulations are far from clear regarding the nature of payments or valuation methodologies for such situations. One manufacturer interpreted the best way to report this under the Sunshine regulations would be as an $85,000 “gift.” Another physician was also fortunate on an initial investment of $100,000 that brought an eventual payout of $160,000. The manufacturer in that case initially classified this for reporting purposes as a $160,000 speaker fee.

The divergent interpretations of unclear regulations can put a gulf in between manufacturers looking to comply with the law and physicians who don’t want to have a $10,000 return on an initial investment called out in a newspaper as an $85,000 “gift.” Indeed, Ladd mentioned that a number of physicians were extremely concerned that their integrity—built over a long career—could be compromised by a single misleading Sunshine report.  Furthermore, many academic medical institutions forbid doctors from, for example, speaking for money. When payments are placed in certain categories simply because a more proper categorization does not exist, real professional repercussions can result.

The second issue of lengthy dispute concerns research payments. Specifically, Ladd noted, a small percentage of companies were reporting large research payments to individual physicians working at facilities not related to teaching hospitals (non-covered entities under the Act) who would perform independent data analysis on clinical trial results. While indirect payments made to physicians through a third party are reportable, these physicians, typically the heads of research, were salaried employees of the hospital, and received no portion, directly or indirectly, of the payment themselves. 

Operational Issues Complicating Review and Dispute

Ladd also raised a number of frustrating case-by-case issues that likely are quite prevalent in a reporting system covering billions of dollars, millions of transactions, and thousands of physicians. The confines of the reporting templates and payment categories means that companies uploading the data are often not able to provide enough information for physicians to understand what is being reported about them. Thus, Ladd notes, physicians might dispute the majority of records just to find out what the payments were for.

Some examples of specific issues illustrate how the review and dispute process can be tricky from an operational standpoint for both manufacturers and physicians, states Ladd.

**Where a physician goes to dinner with a sales rep, but pays for her own meal, and the sales rep pays for his own meal. This is an increasingly common occurrence. The sales rep then may file an expense report with his company noting he took Doctor X out for dinner. In the Open Payments report, Doctor X might be billed for the sales rep’s meal despite having a personal credit card report showing that she paid for her own meal. These are factual issues, but take a fair amount of time and effort to track down the receipts and then to initiate dispute with a company to resolve what is likely a small transaction.

**Where the date of payment does not line up to the date of a given event. For example, a meal may take place a week or more before the company pays the submitted bill.  Thus, during the review process a physician may likely dispute reports for a meal that happens, for instance, when they were out of town. This adds to the time, resources, and confusion of the review process.

**Where a physician gives a talk at a hospital and receives honoraria from the hospital, but later finds out the particular manufacturers that have sponsored the event. Thus, for example, this physician may find reports in Open Payments for $500 from two companies that she was unaware co-sponsored the activity. This is problematic in situations where the physician is doing federally funded research on one of the company’s products or has another similar position that would have disallowed her from accepting honoraria from that company. Put simply, physicians could be in violations of certain conflicts policies and not even know it.  

Ladd’s various stories from the field illustrate that there is a lot of room for miscommunication along the line before a physician even has a chance to view their payments. This can cause serious reputational damage, and from Ladd’s experience, physicians are not taking incorrect or ambiguous payment reports lightly. What makes this more concerning is that the large pushback from physicians is happening at a time when only a small portion are even aware of the review and dispute process. As more reports are made public, Ladd suspects that the pushback will be even more urgent for companies to control. 

Open Payments generates increased media scrutiny into physician payments, and the complexity of the reporting obligations only serves to strain industry-physician collaboration. However, one thing is clear from Ladd’s experience: early and open communication is key to maintaining these important working relationships. Ladd’s company, Primacea, provides manufacturers tools that notify physicians and hospitals, in real time, of payments being recorded for Open Payments reporting. These tools summarize all payments in a tidy spreadsheet that allow physicians and hospitals to review payment details and communicate reporting concerns to manufacturers. This allows for a year-long dialogue, rather than a contentious 45-day dispute window just before this data becomes public, or worse, a news story on July 1 citing incorrect payments.

Steven Ladd is the president of Primacea, the first organization dedicated to serving the best interests of physicians, hospitals and industry who advance medicine in collaboration with each other