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'Open Payments': Government posts information about $3.5B in gifts from drugmakers to doctors, hospitals

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Information about nearly $3.5 billion in payments and gifts made by drug and medical device makers to doctors and teaching hospitals in 2013 is being posted online Tuesday by the federal government. That marks the launch of the “Open Payments” program, mandated by the Affordable Care Act to “help consumers understand the financial relationships between the health care industry, and physicians and teaching hospitals.”

The federal Centers for Medicare & Medicaid Services said Open Payments lists consulting fees, research grants, travel reimbursements and other gifts the health care industry — such as medical device manufacturers and pharmaceutical companies — provided to physicians and teaching hospitals during the last five months of 2013.

CMS said the data contains 4.4 million payments valued at nearly $3.5 billion. This initial data release has information on payments to about 560,000 doctors and 1,360 teaching hospitals nationwide.

However, because of issues with the data, CMS said about 40 percent of those 4.4 million payments on the database don’t identify the physician or hospital that received the money. CMS said that, for those payments, CMS was not able to consistently match the payments to the recipients.

Future reports will be published annually and will include a full 12 months of payment data, beginning in June 2015.

“CMS is committed to transparency, and this is an opportunity for the public to learn about the relationships among health care providers, and pharmaceutical and device companies,” CMS Administrator Marilyn Tavenner said. “This initial public posting of data is only the first phase of the Open Payments program. In coming weeks, we will be adding additional data and tools that will give consumers, researchers and others a detailed look into this industry and its financial arrangements.”

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Financial ties among medical manufacturers’ payments and health care providers do not necessarily signal wrongdoing, CMS said. Given the importance of discouraging inappropriate relationships without harming beneficial ones, CMS said it is working closely with stakeholders to better understand the current scope of the interactions among physicians, teaching hospitals and industry manufacturers. CMS said it encourages patients to discuss these relationships with their health care providers.

“Using this new data, it is now possible to conduct a wide range of analyses of payments made by drug and device manufacturers,” said Dr. Shantanu Agrawal, deputy administrator and director of the Center for Program Integrity at CMS. “Open Payments does not identify which financial relationships are beneficial and which could cause conflicts of interest. It simply makes the data available to the public. So while these data could discourage payments and other transfers of value that might have an inappropriate influence on research, education and clinical decision-making, they could also help identify relationships that lead to the development of beneficial new technologies.”

Manufacturers submitted data to CMS this summer and CMS performed initial matching to aggregate payments to a single physician or teaching hospital. After the data were collected and displayed, registered physicians and teaching hospitals had the opportunity to review payments reported about them and dispute information they believed inaccurate.

More than 26,000 physicians and 400 teaching hospitals registered in the Open Payments system to review payments attributed to them. During the review and dispute period, CMS identified payment records that had inconsistent physician information, such as National Provider Identifier for one doctor and a license number for another.

CMS said the data will be “fully identifiable” in 2015 after the reporting entity submits corrected data, and physicians and teaching hospitals have a chance to review and dispute.

Over time, CMS said, it expects to make enhancements, such as introducing new tools to allow for easier data searches. This improved search functionality will allow users to more easily review payments received by their personal physician, or search on criteria such as specialty, location or types of payments received.

Dean J. Paranicas is chief executive of the HealthCare Institute of New Jersey, whose members include pharmaceutical research firms like Merck. He said HINJ supports the goals of the Open Payments program, "which will provide transparency in life sciences industry collaborations with teaching hospitals and physicians, and report physician ownership and investment interests in life sciences activities in a way that continues to foster patient access and innovation."

Paranicas added: “Health care interactions are extraordinarily complex and multifaceted. We therefore look for reported data to include clear background information and context regarding such relationships. In this manner, patients will be presented with an accurate description of the collaborations between the life sciences and the medical provider community as they partner to innovate new medical advances that save and improve patients’ lives.”

Kerry McKean Kelly, spokeswoman for the New Jersey Hospital Association, said: “What this program is really intended to do is simply provide transparency. Pharmaceuticals and device makers very often are partners with physicians and teaching hospitals in research and clinical trials, so this program provides disclosure of those type of arrangements and relationships and provides transparency to consumers.”

Kelly added: “We would caution consumers that just because something is listed on this site does not mean it is an improper relationship. The reality is that a lot of the work that manufacturers do with teaching hospitals and physicians is in the research and clinical trial area, and that is very important work that advances health care. We don’t want members of the public to look at this database and think that this is improper work. This is very important work to advance medicine.”

Larry Downs, chief executive of the Medical Society of New Jersey, said Open Payments “is an effort toward more transparency in terms of payments to physicians for things they do outside their clinical practice, like consulting and working with industry to develop new and better pharmaceuticals and medical devices to benefit patients.”

He pointed out that CMS withheld a significant amount of the data in this first go-round because of questions about the accuracy of  the data.

“If patients or consumers have any questions about the information in the database, I would encourage them to speak to their doctor directly about it,” Downs said. “Patients would be wise to consult with their physicians about the database before making any judgments.”

Payments by drug and device makers to doctors are controversial, with critics arguing that in some cases doctors are compensated for advocating on behalf of these products.

“Just because physicians take payments in exchange for work they do as an expert or a consultant doesn’t necessary translate to the fact that it will infringe on the clinical decision-making,” Downs said. He said doctors “pride themselves on their independent thinking” and in most instances will not prescribe a drug or device “just because a colleague recommends it.

"I think it is in the vast minority of cases where that influence takes place.”

Linda Schwimmer, vice president of the New Jersey Health Care Quality Institute, said: "I think this move by CMS is terrific. How can we change and improve without open data? This starts the dialogue and leads to consumers asking questions about their care, which is good."

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Beth Fitzgerald

Beth Fitzgerald

Beth Fitzgerald reports on health care, small business and higher education. She joined NJBIZ in 2008 after a 34-year career at the Star-Ledger and has been reporting on business in New Jersey since 1978. Her email is beth@njbiz.com and she is @bethfitzgerald8 on Twitter.

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