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Jill Wechsler is ACT's Washington Editor
The way the Open Payments system is couching investigator transactions is questionable and confusing.
Sponsor payments to investigators conducting clinical trials may be vital for biomedical research, but they’re framed as questionable transactions between physicians and pharma companies under the federal Open Payments system. Drug and medical device manufacturers have to report all “transfers of value” to physicians and teaching hospitals, and payments for research services account for more than half of the $7.5 billion in transactions reported for 2015. Research amounted to $3.9 billion of payments last year, while general payments (for meals, speakers’ fees, consulting) and ownership & investment interests added up to about $3.6 billion.
In addition to tainting important research-related interactions, the program is doubly confusing because it ascribes to a principal investigator the full amount paid to an institution for conducting a clinical trial. That can include millions of dollars to cover supplies and even the cost of drugs provided by the sponsor, as well as amounts paid to staff and other investigators.
Industry funding of research similarly accounts for a significant proportion of payment disclosures in transparency initiatives emerging in Europe. Industry payments to health care professionals for research totaled L229 million (67%) of L340 million payments in the United Kingdom in 2015, as reported in a white paper by Porzio LifeSciences. A big difference, though, is that payments for research in Europe are not ascribed to individual physicians, but reported on an aggregate basis.
Despite all the confusion related to the research aspect of the Open Payments program, the Centers for Medicare and Medicaid Services (CMS), which administers the program, is not likely to revise its policies in this area any time soon. While there is considerable concern over how the data is collected and reported, physicians and teaching hospitals have not greatly reduced their involvement in industry-sponsored research programs: the $3.9 billion paid for conducting research in 2015 is slightly higher than the $3.79 billion in 2014. Over the last three years, more than 1800 biopharma and medical device companies have submitted data on transactions involving more than 800,000 physicians and 1200 teaching hospitals; data for 2016 will be added in June 2017 [see https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2016-Press-releases-items/2016-06-30.html].
But this may change as prosecutors and analysts scrutinize Open Payments data more closely with an eye to uncovering outliers and signals of errors among the millions of routine interactions. CMS so far has not cited companies for failing to submit data that is timely, accurate and complete, although it has sent letters to organizations that have failed to enroll in the program. As the system matures, though, CMS is expected to become more aggressive. Attorney Seth Lundy of King & Spalding noted at CBI’s Forum on Transparency & Aggregate Spend in Washington, D.C. Aug. 16 that Congress expects CMS to fund the Sunshine program by collecting civil penalties from transgressors, which will prompt the agency to ramp up its enforcement efforts.
Such action may be spurred by the HHS Office of the Inspector General (OIG), which plans to issue a report in 2017 on how CMS is implementing the Open Payments program, with an eye to determining the extent of missing or inaccurate data. An underlying objective is to determine whether Medicare pays more for drugs and supplies ordered by physicians with strong financial relationships with pharmaceutical companies and hospital group purchasing organizations. CMS is soliciting comments from industry and other stakeholders on a range of issues related to Open Payments policies and operations, and indicates it will propose regulatory changes in a year or so. Physicians don’t like being listed as large recipients of industry “payments” for conducting research or for participating in industry-sponsored educational programs, but CMS does not appear ready to review those issues.
Prosecutors already are using Open Payments data to support criminal and civil actions, with anti-kickback schemes a prime target. A recent case against former pharma company employees involved high payments to physicians for speaking engagements. Sunshine data appears highly suited to corroborate whistleblower allegations and to help prosecutors build bribery cases.
The health care fraud strike force in the Department of Justice increasingly is analyzing health care system data to identify wrong-doing, pointed out Laura Kidd Cardova, assistant chief of the DoJ Criminal Division’s Fraud Section. A company may keep out of trouble by emphasizing the importance of compliance; when such programs fail to prevent internal malfeasance, she looks to see whether management tends to “turn a blind eye,” or if it shows commitment to “doing what’s right.”