Life Science Compliance Update

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September 30, 2014

Physician Payment Sunshine Act: First Reports Likely Out this Afternoon; Physicians Concerned About Accuracy, Context

Sunshine Data

After over four years since the passage of the Affordable Care Act, September 30th marks the date for the release of the 2013 Sunshine Act data. Today, the Centers for Medicare and Medicaid Services (CMS) is set to publish a database on how much pharmaceutical and device manufacturers have paid to doctors for various engagements—including speaking fees, research grants, and the “value” of any snack a drug rep brings to a physician’s office. Sources say the agency will release the data sometime this afternoon. 

At its core, the Sunshine Act aims to better inform patients of the financial relationships their doctor has with manufacturers. The hope is that the public will see just how important these relationships are in the development of medicines and devices for heart attacks, strokes, multiple sclerosis, cancers and infectious diseases such as HIV, Hepititis C, and Ebola. While (almost) everyone opposes unethical interactions between physicians and pharma companies, the truth is that doctors collaborating with industry is an essential ingredient in patient care.

For example, physicians in academic medical centers often receive funding from industry as investigators in clinical research and as consultants who help design and evaluate clinical trials or develop new medical technologies. Such research is essential in order to find cures for many diseases. Physicians who engage with patients have invaluable practical knowledge to add to the process. Industry also supports physician education, and may provide reprints of peer-reviewed medical journals to busy practitioners.

Many physicians have supported the Sunshine Act’s goal to promote transparency, but are concerned about the potential for misrepresentation of information in public reports, and possible diminished innovation resulting from more limited physician-manufacturer relationships. 

The American Medical Association (AMA) has advocated specifically for more time for doctors to check the payment reports for accuracy. Physicians were allotted 45-days for a “dispute resolution” period with the companies that submitted data before the information went “live." This process was mired with a complicated registration process, missing data, and continuing website shutdowns. View our in-depth article on the physician registration and review period here

Things to consider when searching for doctors in the Open Payments system:

First, one of the fundamental issues that distorts the payment data is the fact that CMS will initially be withholding more than one-third of all the data from the system due to potential inaccuracies. Last month, we found issues in the way CMS matched doctor data for its system. The system relies heavily on physicians’ NPPES numbers, but we noted that this database is notoriously inaccurate. Physicians may have several NPI numbers, they may have entered the state license number incorrectly, or they may have moved states. Unless there is a particular time stamped date that CMS matches a company’s data with, even a completely identical transcription from NPPES to the Open Payments spreadsheet could be outdated and incorrect the very next day.

Second, payments may be incorrect.  One Massachusetts doctor we spoke with typed his name into the system to find that most of his payments were entered into the wrong Open Payments category--research and travel went in consulting, other payments went in travel, etc. No physician wants to see his or her name in the newspaper as receiving a huge sum of money from industry when that information is either untrue or misleading. However, due to the cumbersome "review and dispute process," many physicians were unable to check their data. This issue comes to a head when doctors have agreed not to accept consulting fees, and would have to explain why they have been reported. Thus, it is important for physicians to review and dispute the incorrect information they find next to their name.  The ability to dispute is always available to physicians even after the data is published.

Furthermore, because physicians do not have the option to register and view teaching hospital data, many physicians will be unable to view all of their allotted payments. Teaching hospital research payments in the thousands or millions of dollars may be attached to a single physician’s name who never had the opportunity to review the data for accuracy. The “review and dispute” process, in other words, will typically only reveal payments made by companies directly to the physician.

Due to potential inaccuracies, yesterday, the American Osteopathic Association, the professional membership organization for more than 104,000 osteopathic physicians and medical students, noted that the reports will cause further confusion to the public if released at this time. 

Third, this reporting year only includes data from August to December of 2013. 

Fourth, "payments" under the Sunshine Act are rarely money in a doctor's pocket. The best parallel for misleading reporting came out just a few months ago when CMS released the Medicare payment data. We saw a lot of "Find Out How Much Your Doctor Receives from Medicare” stories that were actually very misleading.  The least researched stories involved a doctor who worked at the Mayo Clinic, and was reported to have received $11 million from Medicare. All doctors at the Mayo clinic receive a salary. This doctor's name was just attached to a huge amount of payments because the Clinic conducts a large amount of research and employs a giant staff. A similar situation could happen with Sunshine Act reporting where the full expense of clinical trials are reported against one "principal investigator" physician. View our Medicare article here

Fifth, a fundamental issue with the Sunshine Act reporting requirements is that manufacturers will have drastically different methodologies for how they calculated certain types of payments--even when they may be for the exact same thing. For example, medical journal reprint valuation was a hotly contested issue among companies--are they worth the cost to the manufacturer, or the cost a physician needs to pay to order them? What if they are available for free online? Because the public will not have access to a manufacturer's "assumptions documents," a fair comparison is truly impossible.

Sixth, no one knows what kind of actual context CMS is going to post on or near the payment site, as CMS has kept this under wraps for months.

Seventh, many payment categories may be misinterpreted by those unfamiliar with the healthcare sector. For example, food and beverage expenses--what we anticipate to be one of the largest categories by number of payments but not dollar value--are often tied in with educational programs where the physician is learning about the safety or efficacy of a vital product. Thus, these meals (or trips for that matter) are almost never improperly lavish as certain articles may portray them to be. 


Concerns over the pending Sunshine Act data release are fairly simple: doctors don't want to be slammed in the press over either inaccurate payments or payments that reflect beneficial collaborations with industry.

We will follow the media coverage of the Sunshine payments in the coming days, as well as updates from CMS. 

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