What in the world is this Open Payments thing? In a nutshell, it is a portion of the Patient Protection and Affordable Care Act (PPACA), commonly called the Affordable Care Act (ACA) or Obamacare, that requires the reporting of “… payments drug and device companies make to physicians and teaching hospitals for things like travel, research, gifts, speaking fees, and meals.” The information is reported to the Centers for Medicare and Medicaid (CMS) and kept in a public, searchable database. The best generic terms I can come up with to describe what they mean are gifts or transfers of value. The reporting is divided between general payments (food, travel, lodging, speaking fees, etc.) and research payments. The data collection began in the second half of 2013. The data is available annually, in June, for the previous calendar year. We now have data from 2013 to 2015. Let’s break it down into some practical situations:
- If a medical device manufacturer representative buys a teaching hospital employee or a physician a cup of coffee in the hospital cafeteria, does that manufacturer have to report it to CMS? Yes. There is no dollar value that is exempt.
- If a pharmaceutical manufacturer asks a teaching hospital employee or a physician to speak at a national conference or produce a web-conference and pays them for their time, must it be reported? Yes.
- If a manufacturer loans a piece of equipment to a teaching hospital to evaluate free of charge, is that a gift that must be reported? Yes. If the evaluation lasts longer than 90 days, it becomes a gift. The Open Payments program recognizes that teaching hospitals will often evaluate products and equipment at no cost or obligation prior to purchasing them … do you ever buy a car without a test-drive? However, after a reasonable timeframe (90 days), it is no longer an evaluation … it is seen as a gift. Have you ever test-driven a car for 90 days and then given it back?
- If a teaching hospital and/or a physician is performing research that is sponsored by a medical device company or pharmaceutical manufacturer and that research is approved by the hospital’s Institutional Review Board (IRB), must that company report their sponsorship? Yes, if that sponsorship involves transfers of value.
Why it matters
Should we care? What’s in it for the Value Analysis department of a hospital? How might this information impact us? First, let’s examine some more specifics. Open Payments is a searchable database that is publicly available to anyone — patients, hospitals, doctors, insurance companies, etc. The CMS website explains it this way:
Open Payments gives the public more information about the financial relationships between physicians and teaching hospitals and applicable manufacturers and GPOs. Specifically, the program:
- Encourages transparency about these financial ties
- Provides information on the nature and extent of the relationships
- Helps to identify relationships that can both lead to the development of beneficial new technologies and wasteful healthcare spending
- Helps to prevent inappropriate influence on research, education and clinical decision making
Most of the bullet points above mesh very well with the philosophy of value analysis (analyzing value with product selection in terms of clinical efficacy and cost appropriateness). In a hospital Value Analysis Department, we may perform project management techniques on medical devices prior to their implementation into our hospital formulary, or prior to evaluating them. Part of these processes may involve vetting the product and from a regulatory/legal standpoint. This can include checking with the Food and Drug Administration (FDA) for a 510(k) on the item, ensuring the product is legal to sell and buy in the United States. It may also involve checking the manufacturer with the Office of the Inspector General (OIG) to make certain there aren’t any irregularities for that particular company with billing Medicare / Medicaid. How far a leap would it be to include an Open Payments search in this checklist of process steps? I’m advocating that it’s a worthy endeavor.
Scenario: Dr. Smith submits a new product request form for an implantable medical device sold by Company X for use in the Cardiac Cath Lab. If your facility has a Value Analysis Committee for such requests, might they be interested if Dr. Smith receives $100,000 annually in honoraria for speaking fees from Company X?
Knowledge is power
This scenario is not farfetched. I would argue it is incumbent upon us to gather this information as part of our due diligence in vetting a project. In most hospitals, the physicians don’t actually work for the hospital. Even in teaching institutions, there’s usually some kind of practice plan that is separate from the hospital itself. It is the hospital that’s purchasing the medical devices, not the physician. In essence, when an MD requests a new product, she’s spending the hospital’s money. Is it not relevant if the request involves paying a higher price on an item than the facility currently pays and the MD has a financial relationship with the manufacturer selling the product?
In fact, use the CMS link (https://openpaymentsdata.cms.gov/search#physician) and perform your own searches just to see what’s out there. Check out physicians you know. If you work in a teaching facility, look yourself up. It can be extremely interesting. Pick a well-known pharmaceutical company that you can’t help but know from television commercials. Looking them up on the website you’ll undoubtedly notice they give out tens of millions of dollars in gifts, each calendar year, to physicians and teaching hospitals.
If you look up some of the well-known teaching hospitals in the United States, you’ll notice some of them receive tens of millions of dollars in gifts from these medical device and pharmaceutical manufacturers every year. You can even download and sort the list to see which companies gave money to these facilities and how much. If you were a member of the public, would you care that your favorite hospital received substantial money from vendors, yet has asked your state to use tax money to fund a new inpatient bed tower? Might that be a bit embarrassing for your favorite hospital? Should it be?
What if, in checking out your personal physician, you see he’s received thousands of dollars from a certain drug manufacturer. Then when you think back to the last prescription he wrote for you, he said, “I’m not going to give you the generic, many of my patients say it’s a harder pill to swallow.” Do you wonder about his motives? After all, he’s receiving money from the drug company that makes the more expensive brand-name medication that he prescribed. Should your insurance company care that he’s not prescribing the less expensive generic medication? Does that smell fishy at all?
What if you don’t have medical insurance and you need a joint replaced? “Self-pay” status in a hospital can cost you tens of thousands of dollars for that joint replacement. If you question the hospital as to why it costs so much, they may tell you that the actual implant is really expensive. It is! In searching the Open Payments database, you may find that the implant manufacturer gives away millions of dollars to hospitals and doctors every year — including your hospital — in hopes that their implants will be used, rather than a competitor’s products. Does that alter your opinion about the hospital, physician or medical device company? Might you feel a bit skeptical about all of this? There’s a lot of money moving around, but you’re the one stuck with a very large bill!
Another perspective
Let’s look at it from a different angle. Does this mean that showing up in the Open Payments database is a bad thing? Perhaps not. I had a very energetic orthopedic surgeon who was new to my hospital submit a request for a product. He was very forthcoming about the gifts that he’d received from the device manufacturer. He told me, “Look … I get paid to speak at national conferences about this implant. Don’t you think I’ve done my homework to make certain it’s the best thing out there? Would I attach my name to a bad product and risk my reputation? I want it here because I know it’s the best thing on the market, because I’ve done the research and I believe the evidence. Why wouldn’t I want the best thing available for my patients?”
It was hard to argue with his logic. When he presented his case to the Perioperative Value Analysis Committee, he was very open about his involvement with this manufacturer, assured them he wouldn’t be getting royalties from any hospital purchases (a Stark Law violation), and convinced the committee that bringing the product in was the right thing to do. His colleagues evaluated the product themselves and ended up agreeing with his assessment. By vetting a product in this manner, the hospital’s decision becomes transparent, evidence-based, and defensible. All of the cards are on the table. When you’ve got nothing to hide, you don’t mind audits or surveys that dig into your decision-making processes.
So, I would make the argument that being listed in the Open Payments database is not a bad thing. Neglecting to be transparent about it is a different story. In the scenario involving Dr. Smith, if he neglects to indicate his involvement with this device company then his colleagues may view that as disingenuous. When he champions Vendor X’s product to the committee, why not look up his transfers of value from that company right there on the spot? We’re probably already projecting a PowerPoint presentation on a screen at the meeting anyway. Why not make it standard operating procedure to look up every requestor on the agenda? As long as they know it’s coming in advance of the meeting, what’s there to hide? Remember, this is public data that their patients can see.
Ideally, physicians sign a Conflict of Interest statement every year for the hospital’s Compliance Department, where they outline any relationships they have with outside entities. Shouldn’t this be matched up to the Open Payments website? Again, I’d say yes. As with the orthopod who came to me in the beginning of his project: There’s nothing to hide when you’re transparent. If you’re not, it’s very appropriate for a Value Analysis Committee to ask why.
Make it a standard
In summary, if our Value Analysis Committees are truly analyzing value and not just a clearing house for new product introduction, I’d submit that an Open Payments search should be a part of every product request. I’d also open it up to pharmaceuticals and make it a part of a hospital’s Pharmacy and Therapeutics (P & T) Committee. If an MD is requesting a new (and possibly very expensive) drug to be added to a hospital’s formulary, wouldn’t it be prudent to know if the physician receives substantial transfers of value from that pharmaceutical company? I’d say yes.
I understand that this may be an uncomfortable subject and some may even view it as privileged information. It’s not. I also understand that, in the good old days, lavish gifts were commonplace. I remember some pretty incredible instances when manufacturers paid the cost of global vacations for whole families. I’ve had vendor representatives tell me that in the past, some physicians would openly ask for lavish gifts (plane tickets, hotel rooms, etc.) before even knowing what that rep was selling! As Billy Joel might say, “The good old days weren’t always good.” Anyone who’s been in this business for a while knows those days are over. I’d submit that it’s a good thing. Who do you think was paying for those gifts anyway?
In an era of ever increasing transparency, I’d advocate that opening up your value analysis decision-making process for everyone to see is a good thing and should be the norm. If there’s anything even slightly embarrassing to anyone about what shows up on the Open Payments website, it may be time to examine it and clean it up, if necessary. As our Value Analysis departments get ever closer to basing decisions on evidence and data, rather than emotion and relationships, I’d advocate that including a search in the Open Payments database with every new product request is an appropriate and necessary step in a hospital providing optimal cost-effective patient care.
References
1. https://www.cms.gov/openpayments/
2. https://www.cms.gov/OpenPayments/About/Open-Payments-Data-in-Context.html
