Life Science Compliance Update

December 06, 2016

Money in Medicine Report


In late November, a report was released that focused on money in medicine, and the top thirty drugs that were associated with pharmaceutical industry payments to Oregon doctors. Interestingly, the top thirty list did not include many drugs that are known to be household names. For example, the top three drugs – Bydureon, Invokana, and Toujeo – are prescribed for diabetes, a highly prevalent disease in America. Three others on the list are prescribed for multiple sclerosis, a debilitating condition that is incurable and can be hard to live with. Hysingla, an abuse-deterrent hydrocodone pill, is also high on the list.

According to the series, $2.6 billion in non-research payments were made by drug and device developers to U.S. teaching hospitals and physicians in 2015. In Oregon, 100 doctors collected $9 million in payments from industry.

This is interesting, in part because the media is always harping on the pharmaceutical industry for spending money and having “influence” on physicians. However, this article and the data show that the drugs (at least in Oregon) that are most associated with pharmaceutical industry payments tend to be drugs for diseases that are highly prevalent or diseases that are hard to beat. The author of the series also gives much time and attention to the physicians themselves, who help her (and the public) understand the benefits.

Doctors who receive the payments state that they are “being compensated for their time and expertise, or in several cases, the technology they devised to advance patient care.” They also “argue that safeguards are in place to prevent undue influence from industry, such as a prohibition on receiving royalties from your own practice or even region.”

Dr. L. Nelson Hopkins, a neurosurgeon and president of the Gates Vascular Institute at Buffalo General Medical Center, believes it is important for physicians and industry to have a good relationship, “To say that physicians shouldn’t work with industry is to say that innovation shouldn’t happen. If physicians weren’t working with industry to develop concepts and to advise industry on how it’s going in the marketplace, and working with industry to iterate the product to get better and better, then that technology would be stymied.”

Gerald Williams, Jr., both a practicing physician and the president of the American Academy of Orthopaedic Surgeons, notes that it makes sense that many of his group’s members account for a large portion of the non-research compensation because their practice areas account for almost 40 percent of the total health care spending in the United States. Williams states that many orthopedic surgeons fund their own product and equipment innovations, and that even more are asked by device makers to lend their expertise in developing new tools and approaches to delivering care.

Dr. Bryan Mehlhaff, a Springfield urologist who makes presentations about cutting-edge prostate cancer drugs, sums it up quite well, “this is very FDA regulated. A lot of my patients know I’m a speaker and that I participate on advisory boards and ask if I’ve heard anything new. A lot of them like that I’m on top of new developments and on the cutting edge of what might be possible for them.”

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

Screen Shot 2016-08-07 at 8.11.38 AM

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.


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