Life Science Compliance Update

October 08, 2015

Physician Payments Sunshine Act: Comments For and Against CMS Including Open Payments Data on "Physician Compare" Profiles

Physician Compare

On July 15, 2015, the Centers for Medicare & Medicaid Services (CMS) published its proposed rule to update the Medicare physician fee schedule for 2016. Among the many proposals, CMS sought comment on whether to add Open Payments data to its “Physician Compare” website. The comment period closed last month; we have provided a list of comments listed by whether they were supportive or against the proposal.


CMS launched the first phase of Physician Compare on December 30, 2010, and so far the website mainly contains physician identification information as well as whether they participate in various “Quality” programs, including the Physician Quality Reporting System (PQRS), Electronic Prescribing (eRX) Incentive Programs, and Electronic Health Records. (You can search your doctor by name or specialty here). In its recently released Call for Comment (see page 123), CMS proposed to add additional data to each doctor’s Physician Compare page, including Open Payments data.

According to CMS, “[c]onsumer testing has indicated that [Open Payments] data are of great interest to consumers.” Open Payments is a searchable database that lists physicians next to the payments or transfers of value they receive from the pharmaceutical and device industry--such transactions may include meals, consulting arrangements, travel expenses, research payments, speaking fees, and a host of other industry interactions. “Consumers have indicated that this level of transparency is important to them and access to this information on Physician Compare increases their ability to find and evaluate the information.”

Thus, CMS sought comment about including Open Payments data on individual physician pages. “Although these data are already publicly available, consumer testing has also indicated that additional context, wording, and data display considerations can help consumers better understand the information,” the agency states. “We are now seeking comment on adding these data to Physician Compare.”

Comments Received

Many stakeholders contributed comments opposed to the proposed change to Physician Compare. AdvaMed, for example, noted that Physician Compare focuses solely on high level data, and lacks the proper context to allow patients and other consumers the ability to understand the details surrounding a doctor’s industry relationship. Such context is necessary to avoid “discouraging beneficial interactions critical to the development and safe and effective use of innovative medical technologies.” They propose instead that CMS provide a reference or a link to Open Payments on a physician’s profile.

BIO, the trade association representing biotech companies, similarly urged CMS to provide a reference or hyperlink to Open Payments rather than a simple dollar figure, if the agency follows through on the proposal at all. “This approach is consistent with the rather spare content and format of the information currently presented on the physician profiles of Physician Compare, BIO writes. “It also avoids the need to determine how best to present the necessary context on Physician Compare to help users understand the voluminous and potentially confusing information available on CMS’s Open Payments website.”

The American Medical Association (AMA), the largest association of physicians in the US, spoke out strongly against CMS including Open Payments financial data on Physician Compare. “The AMA does not support the inclusion in Physician Compare of any data that has not been validated for accuracy by a covered recipient,” AMA wrote. “Though the Open Payment Program was established to increase transparency in the financial interactions of physicians and manufacturers of drugs, devices, and medical devices, CMS has not implemented adequate measures to ensure the accuracy of the data submitted by the industry.”

PhRMA’s comment against the addition of Open Payments to Physician Compare is worth a full read (see page 9), but they essentially argue that instead of CMS expending resources into making Open Payments data available on a separate website, the agency should instead “devote its resources to the continued development and enhancement of the Open Payments website.”

“Our members report repeated instances in which users are confused by the current presentation of data,” PhRMA writes. “For example, physician principal investigators continue to dispute research payments and transfers of value made to an institution, because they believe that the Open Payments site represents that the total research payment is affiliated with only the principal investigator.” PhRMA member companies similarly “report confusion regarding other third-party payments” such as where “a company provides a grant to a patient advocacy organization, and the organization uses some portion of that grant to fund awards to physicians, the payment may be reported in the name of the recipient physician as an indirect payment.” PhRMA is concerned that while “the name of the third party is also reported, we understand that some physicians have expressed concern that the manner in which the payment is displayed on the Open Payments website incorrectly suggests a direct financial relationship between the physician and patient advocacy organization.” The Association is concerned that a dollar figure on a Physician Compare profile will not provide necessary context to how a doctor works with industry.

While most of the comments in favor of the proposed change do not explain the position beyond noting their support of the additional Physician Compare metrics, the American Academy of Physician Assistants (AAPA) explained that including Open Payments data in a link would be the best approach. Thus their recommendation would be consistent with some of the associations and societies opposed to the proposed change.

View the full list below:

Against the Proposed Change

In Favor of the Proposed Change



Dignity Health


American Academy of Hospice and Palliative Medicine

Consumer Purchaser Alliance

American College of Rheumatology

American Academy of Physician Assistants (by providing links to Open Payments)

Alliance of Wound Care Stakeholders

American College of Physicians

Association of American Medical Colleges

Hospital Sisters Health System


Trinity Health

Society of Vascular Surgery


Infectious Disease Society of America


American Society of Radiation Oncology


American Osteopathic Association


American College of Emergency Physicians


American College of Surgeons


American College of Gastroenterology


American Gastroenterological Association


American Society of Gastroenterological  Endoscopy


American Association of Hip and Knee Surgeons


Biotech Industry Association (BIO)


Heart Rhythm Society


American Medical Association


American Association of Neurological Surgeons


American Urological Association




American Association of Orthopedic Surgeons


American Association of Clinical Endocrinologists


Emergency Department Practice Management Association


American Academy of Ophthalmology






Phillips North America





October 01, 2015

Rand Questions Surgeon Scorecard


ProPublica’s attempt to create a searchable database of physician quality for the public, the “Surgeon Scorecard,” has run into some credibility issues. The Surgeon Scorecard was launched in July 2015 and is a database that catalogues and provides the public with individual surgeon’s death and complication rates for eight different medical procedures. ProPublica created this database to help patients determine which surgeons, not necessarily which hospitals, are the best at each particular surgery. This foray into transparency in the medical field has had its fair share of issues and is not currently recommended to be a serious source of information for patients.

The most recent set of problems is brought to light in a nineteen-page Rand Corp. report that takes issue with the Scorecard’s methodology. Rand finds the issues with methodology to be so serious that patients should not view the Scorecard as “a valid or reliable predictor of the health outcomes any individual surgeon is likely to provide.”

One of the issues Rand takes with the Scorecard is that the Scorecard “masks hospital-to-hospital performance differences, thereby invalidating comparisons between surgeons in different hospitals.” This data omission results in a misleading of patients in a “systematic, albeit unintended, fashion.”

Another issue with the Scorecard is the questionable “accuracy of the assignment of performance data to the correct surgeon.” Rand states that claims data submitted to Medicare is what forms the basis of the Scorecard, and that because claims data is notorious for being inaccurate in individual provider assignments, the reliability of the entire Scorecard is negated.

These latest issues compound with previously mentioned concerns about the chilling effects such improperly culled information can have on patient care. In early August 2015, we reviewed a report issued by the American College of Cardiology. That report found that in Massachusetts and New York – two states with mandatory public reporting requirements – patients with myocardial infarction were much less likely to undergo a percutaneous coronary intervention than patients in states without public reporting mandates. As we have previously written, “public reporting and efforts at increasing the transparency of surgical procedures have a laudable goal in mind of guiding patients to the best care. While it is easier to point out the flaws in a reporting system than come up with a perfect methodology, the public reporting of PCI study shows that true patient harm can result if the reporting metrics continue unchanged.”

Rand Corp. reminds patients to ask all prospective surgeons about the risks of any procedures they may be contemplating, and for hospitals to monitor the quality of work their employees are performing, including surgeons.

Rand issued some recommendations for ProPublica to take under advisement that would improve the reliability of the Surgeon Scorecard. One of those recommendations was to conduct a validation study that compared claims-based surgeon assignments with those derived from medical records to help determine the frequency of misattributed events. Rand also recommended ProPublica establish minimum acceptable thresholds for measurement reliability, as that is considered best practices and this omission appears to impose a high risk of misclassifying surgeons and misdirecting patients and other report users.

Additionally, to their credit, ProPublica has made one clarification and one correction since the Surgeon Scorecard has been released, which shows that they have been willing to make necessary corrections to make the Surgeon Scorecard a more reputable source for patient information.  

It seems that as time goes on, the Surgeon Scorecard may be a reliable indicator and a benefit to patients nationwide; however, right now, with the current issues, the Surgeon Scorecard is not recommended to be taken seriously by patients.  

September 15, 2015

Sen. Bernie Sanders Announces "Prescription Drug Affordability Act of 2015"

Pushes for Lower Drug Prices Through Variety of Measures Including Drug Pricing Transparency; Allowing Part D Negotiations; Imports Of Cheaper Drugs from Canada; Increased Fraud Penalties

Bernie Sanders

Taking a break from campaigning for President, Sen. Bernie Sanders (I-VT) and House Oversight and Government Reform Committee Ranking Member Elijah Cummings (D-MD) introduced legislation to address high prescription drug prices called the “Prescription Drug Affordability Act of 2015.” Announcing the Act, Sandars said: “the American people pay, by far, the highest prices for prescription drugs in the entire world” and the “greed of the pharmaceutical industry…has got to stop.” The main provisions of the Act would allow Medicare to negotiate pharmaceutical prices, allow consumers to import cheaper drugs from Canada, ban pay-for-delay schemes, add additional penalties for companies who settle with the government, and require companies to disclose the costs related to particular products and prices they charge in other countries.

View Sanders’ Press Release here.

Sanders listed a number of grievances he had with the pharmaceutical industry. “It is unacceptable that the top three pharmaceutical companies made a combined $45 billion in profits last year and spent more on sales and marketing than they did on research and development,” he said. He also was critical of the fact that “total spending on medicine in the United States has gone up by more than 90 percent since 2002” and that “the monthly cost of cancer drugs has more than doubled over the last ten years to $9,900. “

The Prescription Drug Affordability Act seeks to address some of these over its six sections.

(1)  Medicare Part D Negotiation: The legislation would instruct the Secretary of HHS to negotiate drug prices under the Medicare Part D prescription drug program. President Obama made a similar proposal earlier this year (see Reuters).  For an interesting counter to allowing government negotiation in this area, read a recent article by Robert Moffit entitled “Why Government Price Controls Would Reduce Access to Drugs,” which notes that under the proposal, “seniors will not have the same access to the same broad range of drug therapies that they do today.”

(2)  Prescription Drug Reimportation from Canada: “This bill would allow individuals, pharmacists, and wholesalers to import prescription drugs from licensed Canadian pharmacies where drug prices are 40 percent lower per person than they are in the U.S,” explains Sanders, who added: “You’re looking at the first Member of Congress who took a busload of seniors to Canada to purchase prescription drugs in 1999.  I will never forget the tears in the eyes of women who were able to buy the breast cancer drug tamoxifen at a tenth of the price that they were paying in the U.S.”

He asks all “who tout the benefits of ‘free trade’ to support this concept,” adding that “[i]f we can import lettuce and tomatoes from Mexico, there is absolutely no reason why we cannot import safe and affordable prescription drugs from Canada.”

(3)  Medicare and Medicaid Rebates: The bill would restore the minimum rebate on drugs covered under Medicare Part D for low income Medicare beneficiaries, which was eliminated with the creation of Part D. The bill states that according to CBO, rebates would save $103 billion over 10 years. The legislation would also require generic drug manufacturers to pay an additional rebate to Medicaid if their drug prices rise faster than inflation, mirroring the current requirements for brand name drug makers. According to CBO, these rebates would save $1 billion over 10 years. The bill would also close the Medicare Part D donut hole for brand and generic drugs by 2017, three years earlier than under current law.

(4)  Prohibit Pay for Delay Deals: The bill would prohibit anti-competitive arrangements between brand and generic drug makers where the brand name drug manufacturers pays the generic manufacturer to delay bringing their generic alternative to market. According to the FTC, these anticompetitive deals cost consumers and taxpayers at least $3.5 billion in higher drug costs every year. 

Also last week, U.S. Senators Amy Klobuchar (D-MN) , and Chuck Grassley (R-Iowa) reintroduced the "Preserve Access to Affordable Generics Act," which likewise seeks to end pay-for-delay arrangements. 

(5)  Penalties for Fraud Convictions: The legislation has some fairly draconian measures for companies who either settle fraud charges or are convicted. It would terminate any remaining market exclusivity period on any product found in violation of criminal or civil law through a federal fraud conviction or settlement. Earlier this year, Senator Elizabeth Warren (D-Mass) proposed adding further monetary penalties against companies that enter into major settlements. Pushback to such legislation often centers on the fact that if companies are penalized when they settle, they may instead continue through expensive, time-consuming litigation in order to fight their case. 

(6)  Drug Pricing and Transparency: Finally, the bill includes a drug cost transparency provision, similar to state bills we have written about.  This would require pharmaceutical companies to publicly report information that affects drug pricing, according to the bill, which would include

  • (1) the total expenditures of the manufacturer on (A) research and development;  (B) clinical trials; (C) materials and manufacturing; (D) acquisition costs, including costs for the purchase of patents and licensing; and (E) marketing and advertising for the promotion of the drug to consumers and prescribers;
  • (2) the total profit to the manufacturer attributable to such drug;
  • (3) the total amount of financial assistance the manufacturer has provided through patient prescription assistance programs with respect to such drug, if any;
  • (4) any Federal benefits received by the manufacturer, including tax credits, grants from the National Institutes of Health, and other Federal benefits with respect to such drug; and
  • (5) any additional information the manufacturer chooses to provide related to drug pricing decisions, such as total expenditures on R&D or clinical trials on drugs that failed to receive approval by the FDA.

While most of these provisions are the same as state drug cost legislation transparency, this bill adds section (5), above, that  companies may choose to report total expenditures on R&D or clinical trials for drugs that did not make it to market. However, industry stakeholders have pointed out a number of issues with similar drug price transparency measures, including the fact that the breadth of reporting required could force companies to disclose otherwise protected trade secret or non-commercial information.

What is also unique about this provision from previous state measures is that it includes a section “Reporting on Foreign Sales” that requires reporting of “information about the price of the drug, and profits from and volume of sales of the drug, in each foreign country in which the drug is sold, as applicable.”


Sanders concluded his speech by cautioning his audience that he "know[s] how hard it will be to pass this legislation [and] to defeat the prescription drug industry. In fact, to my knowledge the prescription drug industry has never lost a battle on Capitol Hill." However, he added that "at a time when a huge majority of the American people want us to take action, when 74 percent of Republicans and 93 percent of Democrats, want the federal government to negotiate with the drug companies top lower prices, the time has come to say enough is enough."

Click here for a link to the bill

Click here for Sanders' statements



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