Life Science Compliance Update

November 10, 2015

2016 Data Collection and Submittal Changes under the Open Payments System

A representative of the Open Payments Team at CMS, hosted a Webinar on Thursday, October 29, 2015 about Open Payments and the new submittal and data collection changes for CY2015 data and CY 2016 data, respectively. This webinar comes on the heels of a presentation by Mr. Brown, presented at the Sixteenth Annual Pharmaceutical Regulatory and Compliance Congress and Best Practices Forum, in late October.

Both presentations shed light on the progress CMS has made on data submission and answered some open questions, a summary of which is laid out below.

Stakeholder Feedback Changes

The representative mentioned that they had received a lot of stakeholder feedback and were working on making some responsive changes, including the ability to exchange reporting entity and covered recipient contact information to help facilitate the review and dispute process. The system will now ask you what contact information you want shared with the individuals/organizations reviewing your records, and you can input the most convenient way to contact you.

CMS also received a lot of comments on the special character restrictions; most of the unnecessary special character restrictions have now been removed.

The ability to download reported records will also be enhanced in the update: the downloaded records will now be enhanced to include dispute information and be extended to covered recipient uses. Each download is limited to 400,000 records, which stands in contrast to the upload limit of 250MB. Therefore, CMS recommends that your uploaded data be less than 250MB and 400,000 records so the same files that are uploaded can be downloaded all at once.

One more change CMS has made from stakeholder feedback is that the covered recipient interface will allow users to distinguish whether a record identifies them as a covered recipient or a principal investigator.

Help Desk Feedback Changes

In addition to stakeholder feedback, CMS received feedback from their help desk. One of the new updates will be that reporting entities may delete records that have a status of "system processing."

Additionally, recipient type and details on payment records and principal investigator information on research records cannot be changed after final submission. Changes require the original record to be deleted and a new record with updated information to be submitted. CMS wanted to draw attention to the fact, however, that while reporting entities can delete old records and replace them with new records, the Open Payments system will treat them as new submissions and it may appear as though the records were submitted late.

The final change being made in response to help desk feedback is the character limit for physician/principal investigator state license number has been increased. The character limit will now be twenty-five characters for manual submission and 28 characters for bulk file upload (25 license, 1 hyphen, 2 state code).

Validation Edits

In the 2015 program year, CMS will reject records that are submitted with an NDC (National Drug Code) but without a marketed name. NDCs will also be validated for proper format – dashes must be included in the appropriate positions. The drug name is required in addition to the NDC for several reasons, (1) it is a requirement in the Open Payments Final Rule, and (2) as a more technical point, Open Payments data is not connected to the drug data directly, so for consumers to understand the publicly available information, the marketed name is an important component.

Also, in the next year, research and general payment amounts may not contain a "$0" value amount. For ownership records, "$0" may only be entered in "Total Amount Invested" or "Value of Interest" field, but not both at the same time. If both the total amount invested and the value of interest are equal to zero, there is nothing to report.

For records that contain data in physician-specific fields and hospital-specific fields simultaneously, those records will now be rejected. CMS only wants either the hospital reported or the physician-covered recipient, not both.

Teaching Hospital Complications

Last year, there was some confusion as to which organization should be listed in the Open Payments database: the teaching hospital on the list is the organization that you make the research or general payment to directly. CMS provided this slide during the webinar in hopes that it would shed some light on the confusing hierarchy.


Also related to Teaching Hospitals, CMS provided the below flow chart to use in determining when and how to report payments to Teaching Hospitals.


Stock as a Form of Payment

CMS also touched upon how to handle stock as a form of payment. Essentially, if the stock is publicly traded, it should be reported as a General Payment, Form: Stock. If the stock is not publicly traded, it should be reported as a General Payment and as Ownership.

Stock Options as a Form of Payment

Stock Options as a form of payment is a little trickier. If the stock is publicly traded, payment of transfer of value in the form of stock options should be reported as a General Payment, Form: Stock Options. If the stock is not publicly traded, it should also be reported as a General Payment, Form: Stock Options, but if the options are exercised also need to be reported as Ownership or Investment Interest. If the options are not exercised, they are just reported as General Payment, Form: Stock Options.

Ownership and Investment: Stock

If you have an ownership interest in stock and it is publicly traded, there is nothing more to report. If you have an ownership interest in the form of stock, and it is not publicly traded, new holdings need to be reported in "Dollar Amount Invested" and total holdings should be reported as of the last feasible valuation date in "Value of Interest."

GPOs and PODs

A manufacturer must report each payment to a physician owned distributor (POD) (e.g., LLC, etc.) as an indirect payment to a covered recipient physician. PODs, as a subset of GPOs, must report their physician ownership interests annually.

2015 Physician Fee Schedule Reminders

The 2015 Physician Fee Schedule, implemented November 13, 2014, made some regulation changes to allow for consistency in reporting. For data collected in CY2016, the device and medical supply names will be required and therapeutic area and product category will be optional. CMS wants to move to a more uniform way of reporting medical devices and drugs, making it easier on consumers and patients to read and understand their physicians' reports.

CME Payments

Additionally, with regard to CME payments, compensation (either direct or indirect payments) for physician speakers at accredited or certified continuing education events must be reported if the payment was directed towards a specific physician. However, CMS did update their section on CME payments because they would like for patients to be able to understand their physicians' reports. CMS states that if you are making a direct or an indirect payment to a covered recipient physician, within the context of providing the CME, then that is a reportable event. If by virtue of the relationship you have with the CME organization, it does not meet the definition of a direct or indirect payment, then it is not a reportable event.

Essentially, when determining whether to report a CME payment or not, always review whether it fits into the definition of a direct or indirect payment. If it does, it is reportable; if not, do not report. CMS has outlined in several FAQ's the criteria for determining if the CME payment qualifies as a payment.


Failure to timely, accurately, or completely report each payment or transfer of value, or ownership or investment interest is subject to a penalty of $1,000 - $10,000 per payment/interest, with a maximum annual penalty of $150,000.

Knowingly failing to timely, accurately, or completely report each payment or transfer of value, or ownership or investment interest is subject to a penalty of $10,000 to $100,000 per payment/interest, with a maximum penalty of $1,000,000.

Resources Available

CMS announces periodic webinars and Q&A sessions for industry professionals and offers a Help Desk email:


October 20, 2015

Open Payments: Research Payments Distorted by Including Value of the Medicines and Devices


The Open Payments program, an element of the Affordable Care Act (the "Sunshine Act"), has required the healthcare industry to adhere to a complex transparency program since its implementation in 2014. The Act is an attempt to track payments and transfers of value between life sciences manufacturers and healthcare professionals, and requires any payments and transfers of value to be reported publicly on the Open Payments website. Many have been concerned that such a requirement has the potential to do more harm than good, especially since the reliability of the data has been called into question.

According to the Wall Street Journal, a group from Johns Hopkins University argues that the required reported information creates a “distorted” image of the money that doctors might receive, because for the research template it does not break out a specific value to medicines that pharmaceutical companies provide for clinical trials. “Donated drugs are intended for use by patients and do not provide direct monetary value to physician-investigators. The Open Payment rules for research cloud this critical distinction. One may presume that the public may have difficulty distinguishing between donated drugs for research and transfers of financial value to physicians.”

Given that there is such great concern about the perceived image of a physician being listed on the website as receiving industry money just for receiving medicine samples to pass on to patients, or for speaking and/or attending an industry conference or training session, there are questions as to whether physicians will abandon decades of constructive activity with the pharmaceutical industry, and vice versa. 

A 2014 survey of physicians conducted by MedPanel, however, has found that the impact of the Open Payments Website has not been as dramatic as previously feared. Nearly half of the 461 physicians surveyed said they had not visited the Open Payments website, and over half of the physicians said they were not even very familiar with Open Payments itself. For those who did find the time to visit the site, their motivation typically stemmed from general curiosity about what was being reported about them and their concerns about the accuracy of the reported information.

Of the surveyed physicians who had visited the Open Payments website, about half of them found inaccuracies in the reported data, with thirty percent indicating that payments by manufacturers had been attributed to them that they were not aware of. Additionally, fourteen percent of the surveyed physicians who visited the site said that payments they know they received were not reported.

Advanced Health Media did their own solicitation of views on Open Payments as part of its 2015 Third Annual Industry Conference. One of their panels, Real-Life Perspectives, included five physicians who were active in promotional meetings and training activities. More than one of those five physician panelists had viewed the Open Payments website only because they needed to prepare for participating in the panel. All panelists also indicated that none of their patients had ever asked them about data on the Open Payments website, but if asked, at least one would tell his or her patient that the reason he or she is on the website is because they speak at events. Though certain patients and the government may be concerned about conflicts of interest with healthcare providers speaking and participating in industry-promotional programs, the content provides a cutting-edge learning source for physicians.

In addition to the solicitation of views by Advanced Health Media, they also examined promotional programs conducted by some of their compliance technology and services clients throughout the Open Payments implementation period. They found that the total volume of annual meetings decreased by twenty percent from 2011 to 2013, prior to the Open Payments implementation, but there was a thirty percent increase in the volume of annual meetings from 2013 to 2014, including the period immediately after the Open Payments program was in full swing.

In the 2014 MedPanel survey, seventy-six percent of physicians reported that their level of paid participation in promotional programs remained largely unchanged after Open Payments going into effect. As stated by an Advanced Health Media panelist, “People come out to hear good speakers. We need to continue to have good speakers who actually see patients and have clinical experience.”

While it doesn’t seem as though Open Payments has materially altered the way physicians interact with life sciences companies, cost pressures will likely eventually force some level of changes to how healthcare providers and pharmaceutical manufacturers deliver and consume education. 

October 09, 2015

Provider Payment Sunshine Act: Senators Grassley and Blumenthal Introduce Bill to Expand Open Payments Reporting Requirements to Nurse Practitioners and Physician Assistants


On October 7, Sen. Charles Grassley (R-Iowa) and Sen. Richard Blumenthal (D-Conn) introduced a bill that would expand the Open Payments reporting requirements to include nurse practitioners and physician assistants. Currently, to comply with the Sunshine Act, pharmaceutical and medical device manufacturers are required to report payments and other transfers of value to physicians and teachings hospitals. While the definition of physician is broad—and includes doctors of medicine, osteopathy, dentists, podiatrists, optometrists and chiropractors who legally authorized to practice by a state—the law currently does not cover NPs or PAs.

Proponents of the change to Open Payments, including ProPublica, have argued that these professionals are able to prescribe medicine and should be included in the transparency language just like doctors.

Provider Payment Sunshine Act - S.2153 - A bill to amend title XI of the Social Security Act to require applicable manufacturers to include information regarding payments made to physician assistants, nurse practitioners, and other advance practice nurses in transparency reports submitted under section 1128G of such Act.

Currently, only a summary of the bill is available; we will add specific of the bill as they are released.

The Senators’ bill comes after Connecticut passed a similar law in 2014 that they have since delayed to 2017. Introduced as part of a bill giving Advance Practice Nurse Practitioners (APRNs) the opportunity to practice independent of physicians if they met certain requirements, Connecticut added a transparency provision to include this new set of covered recipients above and beyond Federal Open Payments requirements.

Perhaps spurring the Federal discussion, the U.S. Attorney’s Office of the District of Connecticut recently announced that an APRN practicing in the Connecticut admitted to receiving $83,000 in kickbacks—mostly as a speaker at dinner programs—from a drug manufacturer. The DOJ stated that Heather Alfonso was a “heavy prescriber” of a drug used to treat cancer pain. They noted that a review of Medicare Part D prescription drug events for prescribers of the drug showed that Alfonso was responsible for more than $1 million in claims and was the highest prescriber of the drug in Connecticut. However, the government found through interviews with Alfonoso’s Medicare Part D who were prescribed the drug, revealed that most of them did not have cancer, but were taking the drug to treat their chronic pain.

Transparency advocates have pressed for a more expansive “covered recipient” definition in several public forums.  Last month MedPac staff suggested expanding reporting to other providers, though the members of MedPac were less enthusiastic. In February, the National Coalition on Healthcare recently held a discussion on the Physician Payments Sunshine Act that featured insight from Senators Grassley's staff. There, Adriane Fugh-Berman, MD, associate professor of Pharmacology at Georgetown and alternative medicine specialist, whose organization,PharmedOut, advocates against pharmaceutical marketing influence in medicine, stated the Sunshine Act is not doing enough to weed out pharmaceutical company influence. Open Payments “only picks up about 20 percent of what is required to be reported,” she stated (though it is difficult to understand where her source comes from). “Some states or non-states [referring to DC’s AccesRX Act] have reporting laws that are even more stringent, and I would make a plea for keeping them.” Additional requirements imposed by these laws include reporting payments to nurse practitioners and physician assistants. Fugh-Berman also points to the influence of social workers and receptionists, and even a doctor's social contacts.  

Massachusetts 2013 Payment Reporting  
Advanced Practitioners       Total #of Payments         % of Total
Nurse Anesthetist (RN/NA) $15,057 76 0.04%
Nurse Midwife (RN/NM) $3,427 27 0.01%
Nurse Practitioner (RN/NP) $292,888 1,015 0.81%
Physician Assistant $178,781 635 0.49%
Total Advanced Practitioners $490,153 1,753 1.36%
Total Payments All Practitioners in Massachusetts   $36,155,332

*source Massachusetts Manufacturers Payment Reporting Database 2013

This bill is important to watch for manufacturers who may need to expand their reporting requirements if passed. However, in our analysis of Massachusetts physician payment reports (which has had Sunshine-like requirements for a wide range of recipients for several years), we found that PAs and NPRNs together received less than 1.4% of the share of payments for Massachusetts in 2013, the last year of available reporting.  

It is not clear that one example of a provider gone amok would have been exposed any sooner within the 15.7 million records that Open Payments has amassed in the last 17 months of public reporting, or that it would have been easier to find the bad apple amongst all that data.  With the reams of data currently on Open Payments, adding NP's and PA's may only add more confusion to an already crowded database.

Link to Bill Language: Provider Payment Sunshine Act




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