Open Payments Data Reveal Compliance Efforts Are Not In Vain, by Seth Whitelaw

Seth Whitelaw is President and CEO of Whitelaw Compliance Group, LLC.

As a compliance officer, I always looked for data to support the fact that the compliance program made a difference; something I knew intuitively, but could find little objective support.  This week, Policy and Medicine in conjunction with Open Payments Analytics published a more detailed analysis of the second round of Open Payments data published by the Centers for Medicare and Medicaid Services (CMS). Finally, I believe we have support that the efforts by life science compliance officers and their departments, together with the PhRMA and AdvaMed codes governing interactions with healthcare professionals is making a difference. Here are some figures that struck me.

1. 49% of physicians in the database received less than $100. As noted by the Policy and Medicine article, this could simply be an indicator that companies are being overly conservative in their reporting. However, I believe it also indicates that life sciences companies are not making large numbers of high value payments to the majority of physicians as initially thought by some advocacy groups.
2. Out of $6.49 billion worth of transactions, only $29 million (or 0.45%) are attributable to gifts. Both the PhRMA and AdvaMed codes have prohibited gifts for a physician’s personal benefit for many years now, and so do most company policies. While further research is needed, the remaining gifts could be attributed to companies, who do not support the industry codes, or it could simply be educational items, such as medical textbooks, that CMS’s own FAQ states can be classified as a gift for Open Payments purposes (CMS FAQ 8254). Regardless of the reason, it is important to recognize gifts being provided to physicians account for less than ½% of all the transactions. It was not long ago that gift giving was prevalent in the industry, now it appears to be more of a rarity.
3. The average consulting fee is $2,726. Given that many industry events, such as investigator meetings and advisory boards are daylong events, this translates into an hourly rate of between $340/hour and $390/hour depending on whether a seven or eight hour day is used.   These rates strike me as reasonable, especially when you consider the level of professional qualifications those physicians involved, as well as the costs associated with being away from the practice.
4. The most travelled to destination was Chicago followed by New York and Dallas. Once again, I believe we need to take note how things have changed. Fewer and fewer industry meetings are being held in resort destinations. Instead of industry meetings being viewed as pseudo-vacations, now the emphasis is on output and work. The industry codes and the compliance professionals for years have been insisting that the resort destinations must go, and it appears that they are.

While the work of life science compliance departments is by no means finished, I think it is important to celebrate the fact that over the last 20+ years since the National Medical Enterprises and C.R. Bard, Inc. cases, life science compliance has come a long way, and has made a difference; one that we can now measure empirically.