Life Science Compliance Update

September 20, 2016

Legislation Introduced to Modify Hospital Quality Star Ratings Release


We have previously covered another of CMS’ transparency initiatives—its hospital star ratings—and some of the concerns industry has with the program. After a delay, CMS released the star ratings amid significant industry criticism. At the same time, a recent bipartisan bill would require CMS to take down overall hospital quality star ratings. Of note, according to a recent analysis, these rankings have been found to actually further confuse consumers, rather than provide actionable data to improve health care choices and the market overall.

Bill in Congress

Reps. Kathleen Rice (D-N.Y.) and James Renacci (R-Ohio) introduced the bill (Hospital Quality Rating Transparency Act of 2016, H.R. 5927) that would require CMS to remove its newly published overall hospital quality star ratings from its Hospital Compare website and delay the ratings' release for one year. On July 25, it was referred to the House Committee on Energy and Commerce.

Tom Nickels, the American Hospital Association’s executive vice president for government relations and public policy, in a statement said, "We continue to urge CMS to work with hospitals and health systems to provide patients with a rating system that accurately reflects the quality of care provided at their facilities, and will work with Reps. Renacci and Rice to move this legislation forward"

225 members of Congress previously wrote to CMS in April with their concerns over the hospital ratings system. Part of the letter states, “Many prominent hospitals that are in the top echelon of other quality rating reports, and handle the most complex procedures and patients, will receive one or two stars (out of possible five), indicating that they have the poorest quality in comparison to other hospitals".

The lawmakers' specific concerns included CMS' insufficient disclosure of its methodology and the possibility the rating system gives excessive weight to the "patient experience of care" category, as reported by patients, which accounts for 25 percent of a hospital's score, according to CMS's Quality Net website. The remaining criteria categories are outcome (40 percent), efficiency (25 percent), and clinical process of care (10 percent).

The Ratings

According to CMS, the methodology for the new Overall Hospital Quality Star Rating was developed with significant input form a Technical Expert Panel and refined after public input. CMS says it will continue to analyze the star rating data and consider public feedback to make enhancements to the scoring methodology as needed. The star rating will be updated quarterly, and will incorporate new measures as they are publicly reported on the website as well as remove measures retired from the quality reporting programs.

The agency notes it hosted two opportunities for public input and hosted two National Provider Calls with over 4,000 participants. Hospitals had an opportunity to review their Overall Hospital Quality Star Rating, ask questions, and provide feedback during a “dry run” in July and August 2015.

Ultimately, 3 out of a possible 5 stars was the most common rating, earned by 1,770 hospitals, or about 39 percent. The ratings summarize the findings from 64 existing quality measures already reported on the Hospital Compare website and summarize them into a unified rating of one to five stars. The ratings include measures for care provided when treated for heart attacks and pneumonia, as well as hospital-acquired infections.

Industry Reaction to Ratings

Hospital groups were strongly opposed to the ratings, writing in July to CMS the following: “We urge CMS to share additional information with hospitals and the public about how accurately star ratings portray hospital performance. We also urge CMS to address several significant underlying methodological problems with its star ratings. Until CMS has taken the time to address these problems and share information with hospitals and the public demonstrating that its star ratings methods offer a fair and accurate assessment of hospital quality, we strongly urge the agency to continue to withhold publication of the flawed star ratings.”

The letter was signed by the American Hospital Association, the Association of American Medical Colleges, America’s Essential Hospitals, and the Federation of American Hospitals.

Despite their objections, the ratings were released. Rick Pollack, President and CEO of the American Hospital Association released a statement strongly opposing CMS’ move. “The new CMS star ratings program is confusing for patients and families trying to choose the best hospital to meet their health care needs. Health care consumers making critical decisions about their care cannot be expected to rely on a rating system that raises far more questions than answers. And it adds yet another to a long list of conflicting rating and ranking systems,” said Pollack.

He added, “We are further disappointed that CMS moved forward with release of its star ratings, which clearly are not ready for prime time. As written, they fall short of meeting principles that the AHA has embraced for quality report cards and rating systems. We want to work with CMS and the Congress to fix the hospital star ratings so that it is helpful and useful to both patients and the hospitals that treat them.”

Lack of Utility and Fairness

A recent report in Health Affairs looks at the Hospital Compare ratings from the perspective of a 5-star hospital. The results are highly critical of the CMS program. While supportive of using public disclosure of provider quality data, the article notes, “as currently constructed the scores are unlikely to achieve this goal for the following reasons: roll-up scores across conditions/procedures obfuscate quality at the level of the condition or procedure where gains in quality could happen; grading on a curve fails to identify whether quality is good or bad; and measurement is incomplete and/or imbalanced both in terms of the application of existing measures across hospitals and the absence of important measures in the set.”

The continue by summarizing: “the current scores don’t help consumers pick a high-quality hospital for specific conditions or procedures and don’t promote meaningful quality improvement across hospitals. In fact, in a value-based market where financial rewards are given only to the highest performers rather than providers that achieve high quality, defining quality based on a curve rather than a meaningful threshold will prevent some high-quality hospitals from being rewarded and could discourage hospitals from sharing best practices.”

It has also been repeatedly pointed out that the CMS ratings unfairly penalize teaching and safety net hospitals. For example, the ratings fail to account for socio-demographic factors such as patients' education, race, economic status and regular access to medical care which all have a tremendous impact on health. As a result, many urban hospitals that provide stellar patient care and pioneer groundbreaking therapies, in addition to caring for large numbers of poor patients, received fewer stars than hospitals in affluent suburbs that treat fewer complex patients.

August 19, 2016

New Jersey Interactive “Transparency” Map

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NJ Spotlight, a website that highlights “news issues and insight for New Jersey” recently created an interactive map of New Jersey doctors who received transfers of value from industry in 2015. The map, which can be found here, allows interested readers to see payments by zip code and details on those doctors who received the most money on the map, in addition to individual payments to doctors by searching the databases that are arranged by last names.

According to the United States Centers for Medicare and Medicaid Services (CMS), New Jersey doctors and hospitals received nearly $59 million last year from drug companies and device makers in gifts, travel, royalties, and consulting/other fees. Of that money, doctors received more than $56 million, while forty-seven hospitals received roughly $2.8 million.

In addition to the interactive map, NJ Spotlight also dissected the payments made to physicians and arranged them in lists, by physician last name. Letters A-L and hospital payments can be found here, while letters M-Z can be found here.

Hospital Receipts

Hackensack University Medical Center was the hospital that received the most in payments - $791,980 – with almost $600,000 of that in payments from Intuitive Surgical, Inc., maker of the da Vinci robotic surgery system. That roughly $600,000 in payments were paid primarily as rental or facility fees.

Morristown Medical Center received $550,000, more than half in the form of grants, with the largest amount (almost $262,000) coming from Novartis Pharmaceuticals, a New Jersey based company.

St. Joseph Hospital and Medical Center in Paterson received $284,000, with the largest payment a $176,000 grant from Gilead Sciences, Inc.

Doctor Receipts

In addition to those hospitals, thirty-one individual doctors received more than $200,000 each. More than 23,000 New Jersey doctors, dentists, optometrists, podiatrists, chiropractors, and others received payments ranging from a few pennies to $4.4 million. That large $4.4 million payout was categorized as a dividend or return on investment, paid by Par Pharmaceutical of New York to Sharad Sunder Mansukani, a Moorestown ophthalmologist. In part because of that large payout, Mansukani received the most payments of any doctor in New Jersey ($5.1 million), mostly in dividends from Par. He also received an additional $45,000 from Par and $40,000 from Immucor, Inc., of Georgia as faculty or speaking fees.

There was only one other doctor who received over $1 million in payments – Randal Betz, an orthopedic surgeon from Lawrenceville. He received payments from a total of nine companies, including $1.4 million in royalty or licensing fees from DePuy Synthes Products, LLC. Roughly $300,000 in other payments led to a total of almost $1.7 million in total payments received.

Other Payments Made

A dozen companies made over $1 million in payments, with the biggest categories for faculty or speaking fees ($16.6 million) and consulting fees ($11.3 million). Companies also spent around $10 million on food and beverages, $4.5 million on physicians’ travel and lodging, $1.3 million in grants, $1.2 million in education, and $1 million for speaking or teaching as part of a continuing medical education program. There were also more than $5 million in investment returns and nearly $5 million in royalty or licensing fees received by doctors.

August 11, 2016

Transparency Update: Germany


We frequently write about the transparency requirements found in the United States Physician Payments Sunshine Act and the resulting statistics; however, the United States is not the only country with recently-enacted transparency laws. Germany recently released their first transparency numbers, following a push by the European Federation of Pharmaceutical Industries and Associations (EFPIA) and Freiwillige Selbstkontrolle für die Arzneimittelindustrie e.V.” (FSA).

In 2015, more than 575 million euros were given to physicians, specialist group members, and medical institutions from various drug companies. Spiegel, a highly-recognized German journal, compiled the data into a database. You can search the database in several different ways, including by zip code and city.

If there are several physicians at the same address that received money from industry, the tool will show the receiver with the highest total. All other recipients, and a breakdown by category, can also be found via a link in the tooltip. Doctors and institutions were asked for consent for the release of their data. If a particular physician or provider is not found in the database, it can mean he or she accepted no money or that he or she did not want his or her name released.


However, as with many other transparency efforts, there were some shortcomings in Germany as well. Spiegel recognized that the quality of the data was doubtful in some cases, such as when the sums specified did not match up with the listed payments. Some addresses were also partially incomplete, making it so that individual points on the map are not always entirely accurate.

As previously noted, doctors and physicians were asked for their consent to be named in the data. Under Germany transparency requirements, a doctor will only be listed by name if they agree. Of the 71,000 doctors who received grants, only about 20,000 gave their consent to be named.

Additionally, the initiative does not cover all pharmaceutical companies, the participating companies represent about 75% of the German market for prescription drugs and the sums that individual doctors receive for studies and controversial surveillance studies is not documented.

Lastly, one major concern is that there is no central repository for information, curious patients must go to each website of the fifty-four participating pharmaceutical companies and search through for information.

Interestingly, the reporters at Spiegel turn their eyes toward the United States, noting that our Physician Payment Sunshine Act is a true transparency model that ought to be followed, where the name of the physician, the reason for the payment, and the amount of the payment are all required. Then, all the data is collected and entered into a central, publicly accessible and searchable database in which everyone can search for – and find – their physicians.

The reporters over at Spiegel request that perhaps the government should get involved and draft legislation that makes the Germany transparency effort more like the United States transparency effort. However, the Health Minister of the CDU, Hermann Grohe, notes that there is no further legislation planned on the topic in Germany.


Transparency has been a buzz word in the United States for quite some time now, and transparency efforts across the pond are also underway. While we are still suspicious of the benefits of transparency, we encourage our readers to stay abreast of any changes in the transparency law of your respective country.

For a more in-depth review of Germany transparency numbers, as well as United Kingdom transparency numbers, see the August 2016 issue of Life Science Compliance Update (sub req).


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