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Sunshine Act ‘Open Payments’ Database Sheds Dim Light on Transparency

On September 30th, the CMS launched its “Open Payments” database, publicly displaying data reported on pharmaceutical and medical device industry payments and other transfers of value to physicians and teaching hospitals. This first release of data covers a reporting period of five months, from August through December 2013. The information is categorized in three databases:

  • General Payments: payments or other transfers of value made for various things, including consulting fees, charitable contributions, royalties, entertainment, gifts, honoraria and meals not made in connection with a research agreement or research protocol

  • Research Payments: payments or other transfers of value made in connection with a research agreement or research protocol

  • Physician Ownership Information: information about physicians who have an ownership or investment interest in an applicable manufacturer or applicable Group Purchasing Organization

The information posted in the datasets includes:

  • Amount of individual payments and transfers of value

  • Name of the physician or teaching hospital receiving the payment or transfer of value

  • The applicable manufacturer making the payment

  • Date of payment or transfer of value

  • Location of receiving physician or teaching hospital

  • Type of payment or transfer of value

Through our own analysis of the data provided in the category of general payments, we’ve identified the distribution of payment types in the chart below:

Payments

As illustrated in the chart, the great majority of payments within the general payment category – 85% – fall in the “Food & Beverage” bucket. The meaning or implications of this breakdown – and others – is unclear. Just prior to the release of reported data, several industry trade groups contended that the release of this information to the public could be damaging, if proper context for reported payments and other transfers of value is not clearly illustrated. In a collectively authored letter submitted to the Administrator of CMS, the Advanced Medical Technology Association (AdvaMed), the Biotechnology Industry Organization (BIO) and the Pharmaceutical Research and Manufacturers of America (PhRMA) expressed their concern that the release of inaccurate information could “lead to misinterpretations, harm reputations and cause patients to question trust in their physicians.”

We’ve also identified the breakdown of general payment amounts within each type of payment or transfer of value, illustrated in the chart below:

In contrast to the high number of payments for “Food and Beverage” illustrated in the previous chart, the largest dollar amount falls within the “Royalty and License” category. This further emphasizes the challenges in understanding the context and meaning of this data.

In addition, while this data report provides the first public view of industry-to-physician and teaching hospital payments, some are asking if the 5 month span is a large enough timeframe. Also, about 40% of the information was “de-identified” because the government could not confirm the information’s accuracy, and about one-third of the payment data has not been released because of inconsistencies and other problems. Furthermore, about 9,000 of the 12,579 records that were disputed remained unresolved at the end of the review period. Upon release of the data, officials cautioned that the government has not drawn any conclusions about the disclosed payments, nor should anyone else.

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About this Author

The Health Care Practice Group has represented the health care industry for more than 90 years, and we currently maintain one of the largest national practices in the representation of health care organizations. Our practice serves clients nationwide and our health care lawyers have in-depth knowledge of this complex, highly regulated industry and the rapidly changing issues that impact the various sectors of the health care industry (including providers, health care vendors, health professional...

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