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Open Payments: A Matter Of Maintaining Trust



February 27th, 2014

For decades, it’s been no secret that some physicians have financial relationships with health care manufacturing companies. For example, a pharmaceutical firm might fund a cardiologist at an academic medical center to research an experimental medication for lowering cholesterol. Or, an orthopedic surgeon might receive a consulting fee from a medical device manufacturer for counsel about an artificial hip.

These widespread collaborations can involve gifts, meals, speaking fees, travel support, or payment for research activities. The good news is that these joint efforts have led to the discovery, design, and development of landmark drugs and life-saving devices, as well as numerous other major therapeutic inventions and innovations.

However, these commonplace transactions between physicians and the makers of drugs, devices, biological and medical supplies, or group purchasing organizations (GPOs) also cause considerable controversy. That’s because such payments from manufacturers to providers sometimes introduce conflicts of interest. Improper influence over research, education, and clinical decision-making can be exerted. Clinical integrity and patient care can be compromised. More explicitly, a physician may tout one drug over another during a continuing education session, primarily because he happens to be receiving a grant from its manufacturer.

Among consumers’ most serious concerns is that such financial relationships have always occurred privately, known only to the parties directly involved while the public remained in the dark.

In 2009, the Institute of Medicine released “Conflicts Of Interest In Medical Research Education and Practice,” a report calling for the nation to establish and implement a national program that would once and for all disclose such payments. In 2010, congressional researchers found that some physicians at academic medical centers failed to disclose drug company payments of millions of dollars, despite university requirements to do so. Federal prosecutors claimed those payments amounted to kickbacks for illegal or excessive prescribing. As reported last year in The New York Times, “about a quarter of all doctors take some cash payments from drug or device makers and nearly two-thirds accept meals or food gifts.”

The Physician Payments Sunshine Act

Open Payments (also known as the Physician Payments Sunshine Act) was enacted in March 2010, as part of the Affordable Care Act. The provision mandates that certain manufacturers of covered drugs, devices, biologicals, and medical supplies, as well as applicable GPOs, annually report to The Centers for Medicare & Medicaid Services (CMS) payments and other transfers of value they make to physicians and teaching hospitals (“covered recipients”). The provision also called for applicable manufacturers and GPOs to report ownership and investment interests held by physicians and their family members. For the period from August to December 2013, reporting was required to be complete by early 2014. CMS will then collect the data on the nature of these financial relationships, aggregate it, and publish it on a publicly accessible website by the fall of 2014.  Compliance is being taken seriously. Violations of the reporting requirements will carry annual civil penalties of up to $150,000 for failure to report and $1,000,000 for knowingly failing to report.

Open Payments, admittedly long overdue, is designed to do precisely what laws are supposed to do: acknowledge, reflect, and squarely address a growing public concern, in this case, about the often coupled issues of transparency and accountability in health care.

The law is already facing some obstacles. Too few manufacturers appear to be fully aware of the new regulations. Some misunderstand and are skeptical about the law, while others express worry about coping with new reporting requirements. And still others claim the health care profession is already regulated enough. Last year, a column in The Wall Street Journal called Open Payments “a boondoggle for accountants, compliance bureaucrats and the legions of lawyers whom companies will hire to interpret and manage the regulations.”

The Role of CMS

In fact, CMS has made every effort to minimize the burden on industry. We’ve given all parties ample time to prepare to submit data. Our website offers all the basic information needed for reporting in plain language. All participants will also have 45 days to review, dispute, and correct any information believed inaccurate before its publication.

By establishing an accessible national database of such financial relationships, Open Payments replaces secrecy with transparency and accountability. It will prevent undue influence on research, education, and decision-making as well as compromises in clinical integrity and patient care.

In equal measure, the program promises to be both good medicine and good policy. Ultimately, the details made available to the general public will equip patients and families to reach better health care decisions, including how to go about choosing a doctor. Sustaining trust in the integrity of physicians, and in the care consumers get from those physicians, remains our highest priority.

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1 Response to “Open Payments: A Matter Of Maintaining Trust”

  1. jim jaffe Says:

    this is one of those peripheral issues, not unlike campaign finance, that a few people care about a lot and most of us suspect the enforcement mechanisms are more trouble than they are worth. if a doc finds a product he thinks is good, it is logical for her to use it and to invest in the company that makes it. in fact, I’d wonder about a doc that simultaneously used a product on me and shorted the stock. from there it seems like a short step to participating in funded research or aiding with promotion.

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