Life Science Compliance Update

June 25, 2014

Physician Payment Sunshine: Survey Offers Insight Into Companies’ Phase One Registration Experiences

There was a recent survey of 32 compliance and regulatory officers and legal counsel from life science companies about their experience with the Phase 1 reporting process of the Physician Payments Sunshine Act conducted by Polaris. Companies were responsible for submitting Phase 1 aggregate spend data by March 31, and will be responsible for Phase 2 submissions of detailed data by June 30. Most companies noted they were "somewhat satisfied" in their Phase 1 reporting processes, but many answers reveal that companies will have a busy sprint to the finish here as Phase 2 reports come due.

All but one respondent noted that they expected at least some variance between their Phase 1 and Phase 2 reports. Nearly half said there would be significant (12.5%) to moderate (34.4%) variances in what they report by the end of June. Particularly interesting, 22% of companies noted they discovered "several" specific payments that raised compliance concerns or necessitated significant follow-up.

In terms of companies' experiences with the technical side Phase 1 aggregate data submission, 30% noted that their file was not accepted and validated on their first attempt or that their file was still pending acceptance and validation. Respondents stated that they spent the most time for Phase 1 on transactional data validation (50%), HCP demographic validation (28.1%), submission formatting (12.5%), and CMS registration (9.4%).

We recently covered all the comments surrounding the Dispute Resolution process. Many physicians stressed the need for companies to notify them about any transfers of value before the data goes public. Polaris asked companies if they had notified any covered recipients prior to reporting data in Phase 1. Only 3 respondents indicated that they had. More than one-third of the respondents noted they were not planning to. Twenty-five percent plan to notify following submissions; 28% were likely still in the process of figuring it out.

Polaris asked whether companies were planning on reporting physician data as found exactly in the NPPES database verses their own information. We have reported on how notoriously inaccurate this database is. More than half the respondents (53%) indicated that they planned to use a hybrid of NPPES and their own internal data. A quarter of respondents stated they would use exactly what they found on the NPPES database; 19% noted they would use exclusively their own data source. One company said they would use neither of those methods.

More than a year after CMS' Final Rule, and following countless FAQs, many companies remain rightfully confused about many aspects of capturing and reporting data. "Delayed publication," and "teaching hospital identification," topped the list; 2 respondents stated "reprint valuation," and the last 7 respondents were most unclear about another aspect of reporting.

We have been covering companies' experiences with Phase 2 reporting over the last few weeks. So far, we have heard of several confusing idiosyncrasies with the system. Furthermore, many people have had to re-register with CMS for this process even after registering for Phase 1. This could take an addition few hours before the actual data submission can even begin, so we encourage companies to start this process sooner rather than later. We will be following these issues closely.


June 23, 2014

Physician Payments Sunshine Act: PhRMA Urges CMS To Push Back June 30 Deadline For Phase 2 Data Submission

Last week, the Pharmaceutical Research and Manufacturers of America (PhRMA) wrote a letter to the Centers for Medicare and Medicaid Services (CMS) asking them to push back the June 30th deadline for Phase 2 data submission under the Physician Payments Sunshine Act. PhRMA stressed that many of their members have reported significant difficulty when attempting to register as applicable manufacturers and upload data to the Open Payments website. We have heard similar accounts from companies, and recently compiled a list of frequent issues to watch for here.

PhRMA notes that foreign manufacturers and foreign affiliates of US-based manufacturers have had an especially tough time. "Registration glitches appear particularly acute" for foreign entities, PhRMA notes, "and they are compounded by the fact that Open Payments helpdesk hours do not accommodate European or Asian time zones."

CMS' timeline for manufacturers to submit their data does not leave much room for error. From June 9 to June 30—16 business days—companies are required to finish the second step of Phase 2, which includes completing the final data submission and attesting to its accuracy. However, companies must successfully register with CMS before they are able to submit their data. Glitches in the Open Payments system have set companies back. The original window is "now substantially and meaningfully reduced for many manufacturers through no fault of their own," PhRMA states.

PhRMA requests CMS grant a 30-day extension of time for all manufacturers to complete the data submission process once CMS confirms Open Payments is "fully operational and the technical problems have been resolved."

Additionally, PhRMA highlights two issues with the data submission process that could affect the accuracy of the data that manufacturers submit. First, PhRMA addresses payment credits. Their letter states: "it is our understanding that manufacturers will not be permitted to list instances in which payments or transfers of value have been refunded by a covered recipient." These situations "routinely occur with research grants—after a clinical trial has been completed and a covered recipient completes a process to 'true up' the research grant with the expenses incurred, the covered recipients refunds any unused grant amounts."

Last year, we covered a study in which 43 percent of physicians said that inaccurate reporting would adversely affect their interactions with industry. Twenty-one percent said they would sever the relationship with the company that reported incorrect information. Physicians might be unhappy that their name gets attached to large research payments, but they will be more so if companies report money that physicians have refunded.

Second, PhRMA asks CMS to accept typographical characters, such as parentheses and certain symbols, in manufacturers' assumptions text box that will accompany the payment data. They are concerned that this restriction will diminish the accuracy of the data. For example, "with respect to research payments, manufacturers have attempted unsuccessfully to mirror descriptions of clinical trials identified on It would serve the goals of accuracy and consistency for manufacturers to be able to report the same information on both government websites."


AMA's request seems reasonable given that CMS announced last February that they would not be fining applicable manufacturers for data submitted before August 1, 2014.   The idea that the system is only open for 21 days is difficult to imagine given all the delays that have affected this program thus far.

May 23, 2014

Physician Payments Sunshine Act: Phase 2 Data Submission and Attestation Begins June 1 and Ends June 30th

On June 1, applicable manufacturers and applicable group purchasing organizations (GPOs) will start Phase 2 of Open Payments registration and detailed data submission.

Important Information:

  • Like the two phase process of Phase 1 and 2 for Open Payments, Phase 2 is being split into an additional two steps (described below).
  • All Phase 2 activities (Steps 1 and 2) must be completed by June 30. This gives companies just 30 days to become familiar with the Open Payments submission system, and attest to the information. CMS said "no fewer than 30 days" for this process, and they were not kidding. We believe exactly 30 days is too short a window. CMS is likely compressing in the submission process in order to get the data published publicly by their September 30th self-imposed deadline. However, we think that giving companies the time to focus on accuracy of data is more important than meeting a deadline and having problems down the road.
  • For the 2013 program year, CMS will not enforce penalties for reporting non-compliance until after the close of Phase 2 registration and data submission.
  • The physician and teaching hospital review and dispute phase will begin later this summer; additional information regarding the review and dispute processes will be announced soon.
  • Assumptions cannot be longer than 4,000 characters (including spaces).

The following outline provides details about the two steps of Phase 2:

Step 1: From June 1 through June 30, 2014, authorized officials of applicable manufacturers and applicable GPOs will be required to:

  • Complete Open Payments system registration for authorized officials of applicable manufacturers and applicable GPOs and their reporting entity.
    • This stage is essentially Phase 1, where authorized officials must complete Open Payments registration the reporting entity and themselves.
    • CMS notes that authorized officials will be required to provide additional profile information than what was submitted in Phase 1.
    • In order to access Phase 1 pre-populated data for the reporting entity, the authorized official who registered in Phase 1 must be the first person to log into the Open Payments system for the reporting entity, using their same EIDM ID established in Phase 1.
    • Authorized officials who did not register in CMS' Enterprise Portal in Phase 1 (the gateway to CMS' Enterprise Identity Management system), must complete that registration first, in order to access the Open Payments system in Phase 2. (This takes 15 days)
  • Confirm the accuracy of the reporting entity profile data submitted for Phase 1.
  • Delegate roles and responsibilities by nominating system users to fill specific user roles.
    • When going through this first-time registration in the Open Payments system, the authorized official must identify him/herself or other individuals to fill all three available user roles (officer, submitter, or attester). These individuals will then be able to perform the required actions associated with their user role, such as submitting and attesting to the data for the 2013 program year.
  • The Submitter may during this stage perform test file uploads and submit data files to validate the file structure and contents of the file.
    • By completing this step, the Open Payments system will validate the structure of the file to determine if the formatting of the file is acceptable. Data submitted during the test submission will not be uploaded for reporting
  • Utilize the error report produced by the Open Payments system to fix data errors (if any) in submitted files.
    • Users must submit their file on the Upload Payments page. Submitting the file to Open Payments first validates the file structure (same as in the Optional action #4). If the structure check passes, the contents of the file (such as all required fields are populated, contain valid characters, are of required length, etc.) are also validated.
    • If submitted files contain content errors, users will receive an email alerting them that errors were detected, along with instructions for how to retrieve the error report from the Open Payments system. Users will then be able to download the error report and use error descriptions included in the User Guide (chapter 4.9) to fix the errors either manually or through resubmitting the file.

Once the test data files have been successfully uploaded and validated at this step, industry users can move on to Step 2.

Step 2: Starting June 9 through June 30, 2014, the Open Payments system will allow:

  • Submitters to perform final data submission (which includes a series of checks to match the reported data to the appropriate physicians and teaching hospitals);
    • This step is where the submitter attests to the accuracy of the detailed 2013 payment data. Starting June 9, "Final Submission" functionality will be available in the Open Payments system. To be able to perform final submission, all validation errors identified in Step 1 when "Submit Files to Open Payments" was completed.
    • All records need to be in "Ready for Submission" status. After final submission is performed, submitted records will be matched to physician and teaching hospital profiles. If the system is unable to match some or all of the reported transactions, the reporting entity will be notified and will have the opportunity to either correct the data and repeat the matching process by performing the final data submission, or overriding the failed matching status and proceeding with submission.
  • Attesters to attest to the accuracy of their submitted detailed 2013 payment data.
    • After all records successfully complete the matching process (or unmatched status is manually overridden) and are in "Ready for Attestation" status, they must be attested to by the reporting entity's authorized official or representative. Review chapter 4.10 of the User Guide for details on the attestation process.
    • Note: Open Payments reporting will not be considered complete until the official attestation is received. Official attestation must be received by June30.


CMS now has amassed many resources about the technical aspects of data submission.

Review the Physician and Teaching Hospital web pages for details on the phased approach to physician and teaching hospital registration that begins on June 1. 

For Phase 2 detailed data submission details information, review the Phase 2 Instructions, the materials available in the following sections, and the Open Payments User Guide. All of these resources are to be used by reporting entities during the Phase 2 detailed data submission process.

Data Submission Requirements and Timeline
Data Submission Resources
        Submission Data Mapping Document [Updated May/June 2014]
        Bulk Data Upload Instructions [December 2013]
        XML Schema and XML Sample Files [Updated April/May 14]
        CSV Sample Files [Updated May/June 2014]
Industry Attests to Data


CMS announced in February that they were not going to fine companies that filed before August 1, 2014. It will be interesting to see if they have changed their minds and will not honor their original statement, which has since been taken down from the Open Payments Website. The 30 day window is a serious problem if the website which has not been tested with large volume live data does not work as promised. Given the track record of the vendor CGI Federal and the insurance exchange, buckle up for a potentially bumpy ride.


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