Last week, the Centers for Medicare and Medicaid Services (CMS) released the second year of Open Payments data, detailing the transfers of value made from pharmaceutical and device manufacturers to physicians and teaching hospitals in 2014. While the data release did not garner quite as much attention as in 2013, articles this year did focus on the improved CMS data compared to last year and the top line totals—industry payments were $6.5 billion, with research ($3.23 billion) and royalties ($803 million) as the top payment types (See NY Times, Washington Post, Reuters, and Wall Street Journal).
A number of outlets have dug into the numbers in the week since CMS released its data.
Medical Device Royalty Payments
Minnesota based Post-Bulletin ran an in-depth story looking into royalty payments made to Mayo Clinic doctors. These payments often reflected innovative orthopedic products. "We are very proud of our invention activity," Dr. Clark Otley, Medical Director of Mayo Clinic Ventures states, as quoted in the article. "We invent all different sorts of devices, tests, imaging technologies, drugs and information technologies. We feel we handle them very responsibly through a royalty sharing plan which brings a large portion of the revenue back to Mayo Clinic and our three shields."
Indeed, “[s]ince royalties are shared with the clinic,” much of the physicians’ reported royalty payments was shared with Mayo Clinic, states the article, which also noted that one doctor’s royalty revenue reflects the popularity of an uncemented hip replacement. Dr. Otley called it "one of the best designs over the past 10 years.” He added: "Many of the most successful implants in the world today are generated from Mayo Clinic research."
ProPublica and Obsidian HDS Analysis
ProPublica’s Dollars for Docs has used the 2014 Open Payments data for a number of articles with the help of Obsidian HDS, the developer of PharmaShine (www.pharmashine.com), an online service for the management of data on pharmaceutical and device industry payments to healthcare professionals.
Frequency of Payments
An article published in ProPublica, and simultaneously in NPR and MedPage Today, focused on doctors that are paid most often as defined by separate line items in the Open Payments database. Entitled A Pharma Payment A Day Keeps Docs’ Finances Okay, the article uses the dates corresponding to expenses and frequency of payments to rank doctors in the order of how many days per year they received payments.
While the article provides an interesting look at industry-physician interaction, it is important to understand how the structure of the Open Payments database affects the accuracy or interpretations of such analysis.
For one, ProPublica takes aim at a doctor who received around $6,000 throughout 2014. “She received payments on 286 days of 365, more than anyone else,” notes ProPublica. Taking a quick look at her 2014 payments shows that 100 payments were for $1.75 or less—all for “Food and Beverage”—and odds are for coffee. The vast majority of her payments are for $10 or less. While the crux of ProPublica’s article is on the frequency of daily interactions, CMS has specified that “manufacturers have flexibility to determine the methodology for reporting when the date of the transfer of value was ‘provided.’” CMS notes: “For example, in the instance of travel benefits, there is flexibility for reporting travel because the purchase date (of airline tickets, for example) may be different than the date the transfer of value is actually “provided” to the covered recipient (i.e., when the physician takes the flight).” Furthermore, CMS gave manufacturers “flexibility to report payments made over multiple dates either separately or as a single line item for the first payment date.” See FAQ 10086 and FAQ 8153.
Thus, it is worth noting that one company’s $20 entry may be another company’s 5x$4 (or 20x$1) entry.
CMS’s FAQs also shed light on another basic, yet important, clarification regarding payment breakdown and frequency--how expense sheets work. For example, if you imagine a fairly routine speaker program, the individual line items add up for simply giving a presentation. An expert may have a cab fare from her home to the airport, air fare, cab ride to the hotel, hotel expense, cab fare from the hotel to the speaking venue, a coffee, snack, and lunch, cab ride back to the airport, flight home, and then a return cab from the airport within a 24 hour period. While the ProPublica articles are correct in that these constitute transfers of value under the Sunshine Act, costs associated with time in a cab do not sound particularly exciting, nor will such payments “keep[ ] docs’ finances okay.” Furthermore, companies may report these payments on different days based on their own internal processes. Thus, five or even ten different small transfers may represent the travel logistics of getting a doctor to a speaker program.
Covered Recipients Do Not Include Nurses
Another recent article argued for including nurse practitioners in the Open Payments database (Transparency Program Obscures Pharma Payments to Nurses, Physician Assistants). This came a few days after an Advanced Practice Registered Nurse (APRN) in Connecticut was charged with accepting kickbacks from a drug company. ProPublica noted that “when the federal government released data Tuesday on payments by drug and device companies to doctors and teaching hospitals, [these] payments were nowhere to be found.”
The article argues that nurses should be included as well in the database, though it does not mention the cost of each manufacturer instituting such tracking. It bears mentioning here that in our analysis of Massachusetts payment data (whose state law considers nurses to be “covered recipients"), less than one percent of payments went to APRNs.
Payments Added Up
Media reports have tended to add payments from 2013 to 2014 to better support “Dr. X is awash in cash” type articles. Currently the Dollars for Docs search tool, though similar to Open Payments, lists payments over 17 months next to a doctor’s name when you use their database. We can expect this trend to only continue as the Open Payments rolls out in 2016 and beyond.
We will continue to look into interesting trends in the Open Payments database as well as the media response.