Life Science Compliance Update

November 15, 2017

CMS Not Moving Forward With October Update of Hospital Compare


The Centers for Medicare & Medicaid Services announced it will not update its overall hospital quality star ratings on Hospital Compare in October. “CMS decided not to proceed with the October update to continue its examination of potential changes to the Star Rating methodology based on public feedback,” the agency said. The star ratings released last December will remain on the Hospital Compare website until the next update, CMS said.

Flawed Methodology and Hospital Criticism

When the ratings were posted in July 2016, they were heavily criticized by hospital groups and the Medicare Payment Advisory Commission (MedPAC) for “flawed methodology” and not accounting for socioeconomic factors in a hospital’s patient population.

The AHA has continued to ask CMS to suspend the star ratings until the “methodology is improved” and consider scrapping the overall rating for ratings separated by topic areas like patient safety, patient experience and cardiac care. “The measures included in the ratings were never intended to create a single, representative score of hospital quality,” wrote Ashley Thompson, AHA’s senior vice president for public policy, in a September 25 letter to CMS.

AHA has been a frequent critic of the star ratings program, saying it has “significant concerns about the conceptual underpinning” of the program and is concerned about the “reliability and accuracy” of the methodology used to determine the one-to-five star rankings. In June it asked the CMS to suspend the program entirely.

In general, hospitals have never been a fan of the star ratings program. CMS issued the first results in July 2016, and only 2.2% of hospitals received the full five stars. AHA has said some hospitals have been incorrectly classified, and that the ratings themselves are too simplistic, as well as misleading and confusing for patients. They also say the program puts too much regulatory burden on hospitals.

How Current Rankings Work

Each year hospitals that bill Medicare must complete a Hospital Consumer Assessment of Healthcare Providers and Systems Survey, also known as Hospital CAHPS, a survey designed as a standardized methodology for measuring patients’ perspectives on hospital care.

The ratings are relatively new. The first star rankings appeared on in July 2016 and were updated in October. The star ratings are based on self-reported data points from each hospital encompassing 64 quality measurements in seven categories that include mortality, safety of care, readmissions, patient experience, effectiveness of care, timeliness of care and efficient use of medical imaging. CMS then uses an algorithm to assign a 1-5 star rating on about 3,700 hospitals nationwide, which consumers can view on the Hospital Compare section of

October 23, 2017

Coming Soon to a State or Even City Near You - Part 1 Pricing Transparency


As opposition to and concern about the activities of drug manufacturers continue to mount, increasingly states, and even cities, are stepping in to regulate pharmaceutical companies. This is the first in a two-part series focusing on the notable proposed state and city actions and laws and ordinances that have been or soon will be enacted in 2017. The article will focus on drug pricing transparency disclosure legislation that is being introduced at an ever-increasing rate. The pharmaceutical industry cannot fight each and every state and city action successfully. The truth of the matter is that the industry is losing ground and leadership within companies cannot begin to sacrifice their compliance and legal departments.

It is a basic principle of physics that nature abhors a vacuum, and thus will move quickly to fill the void. The same is true in the compliance world. Since the implementation of the Open Payments system, the Federal government has done little with the data other than post it. Nor has Congress attempted to address other pharmaceutical related issues like pricing.

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October 10, 2017

Belgian Sunshine Act Decrees Issued, Providing Guidance


On June 23, 2017, the Belgian “Sunshine Act” became law, requiring life science companies to disclose relationships with healthcare actors in the country. The Decree confirmed that the first publication of data under the statutory transparency regime will cover transfers of value for the year 2017 and will be published on by June 30, 2018.

The June 23 Decree notes that the provisions of the Sunshine Act apply to “premiums and benefits granted during calendar year 2017 to healthcare professionals, healthcare organizations and/or patient organizations.”

A second Decree was issued on August 22, 2017, which designated the ethical health platform Mdeon as the organization that will handle the practical aspects of disclosure on behalf of the Federal Agency for Medicines and Health Products (FAMHP). Mdeon will be managing theh publicly accessible website that will disclose the premiums and benefits that pharmaceutical and medical device companies grant to healthcare professionals and organizations, as well as patient organizations, annually.

It is unclear whether this determination causes the Sunshine Act to have retroactive effect in that it would require firms to notify and publish the transfers of value that occurred during all of 2017.

There are, however, certain benefits and premiums granted to these beneficiaries that do not have to be notified. These exceptions are (i) premiums and benefits of limited value that concern the practice of medicine, dentistry, pharmacy or veterinary medicine; (ii) meals and drinks supplied during scientific events; (iii) premiums and benefits that are part of ordinary-course purchases and sales of medicinal products or medical devices by and between a pharmaceutical or medical devices company and the beneficiary; and (iv) samples of medicines.

Before the implementation of the Sunshine Act, only industrial codes of conduct were adopted in order to enhance the transparency of transfers of value from pharmaceutical and medical devices companies to HCPs and HCIs. The transparency obligations were only mandatory for companies that were members of an association that had a code of conduct in place. 

The transparency obligations are now mandatory for all companies under the Sunshine Act. Considering the scope of the definition of “notifiers”, this practically covers all companies in the healthcare sector. Therefore, the scope of the notification obligation is very broad.

Sometime in September 2017, plans to organize an information session for the industry to explain – in detail – the new legal framework, including the differences with the current transparency in self-regulation.


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