Thomas Sullivan
President, Rockpointe
March 2015
Thomas Sullivan
• Former political consultant who founded
Rockpointe, Inc., an accredited biomedical education company in 1995
• Authority in changing medical education
environment and economy
• Author of Policy and Medicine, the
leading online coverage of the Sunshine
Act, a resource informing the medical
community on trends, threats and
changing processes
• Disclaimers: Information provided is for
educational purposes and should not
be construed as legal advice
Agenda
• Overview of Sunshine Act
• Review 2013 Data
• A Look at Three Years of
Massachusetts Data
• Discuss Reaction
• Recommendations
• Resources
Overview of Sunshine Act
Background on the Sunshine Act,
Section 6002 of the Affordable Care Act
• Senator Grassley of Iowa and former Senator
Kohl of Wisconsin introduced unsuccessful
versions of a Sunshine bill in 2007 and again in
2009, focused on public disclosure of the
financial relationships between physicians and
the pharmaceutical, device, and biologics
industries.
• The Sunshine Act was finally enacted as a small provision in the much
larger Affordable Care Act in 2010 (Section 6002).
• The Centers for Medicare & Medicaid Services (“CMS”) was delegated
the task of creating the necessary regulations to implement it.
• Following numerous delays, CMS released the final regulations on
February 8, 2013.
In General
• The Sunshine Act requires applicable manufacturers (AM) of
“covered” drugs, devices, biologics, or medical supplies to report
annually to the Secretary of HHS certain payments or other transfers
of value to covered recipients (CR)--physicians and teaching hospitals.
• The Sunshine Act does not “ban” any payments but simply requires
reporting of payments and transfers of value.
Who Reports?
• (1) Applicable manufacturers of covered drugs,
devices, biologicals, and medical supplies covered by
Medicare, Medicaid, or CHIP are required to report on
their transfers of value
• (2) Applicable Group Purchasing Organizations (GPOs)
– Report only physician ownership, investment interests
– Definition includes physician owned distributors (PODs) that
purchase products for resale
• Excludes OTC-only makers
Covered recipients, including colon and rectal surgeons,
have no reporting obligations. Only manufacturers are
subject to Civil Monetary Penalties for noncompliance.
Who Is Reported On?
• Physician/and or group practice
– MD’s, DO’s, Dentists, Dental Surgeons, Podiatrists, Optometrists,
or Chiropractors
– All physicians that have a current license regardless of whether
enrolled with CMS, or whether treating patients
• Ownership interests of employees of manufacturers and
immediate family members
• Payments to non-CRs meant to pass through to physicians
must be reported as indirect payments
• Sunshine Act excludes: payments to bona fide employee of
applicable manufacturer (except ownership interest),
residents, nurse practitioners, physician assistants,
pharmacists, physicians in their capacity as payments
Who Is Reported On?
Teaching hospital
–
Any Institution receiving payments
under:
 Indirect medical education (IME)
 Direct Graduate Medical Education
 Psychiatric hospital IME
–
–
–
CMS publishes an annual list
identifying the teaching hospitals
that are affected (over 1200)
Does not include payments to nonhealthcare departments at
universities affiliated with hospital
Must report indirect payments as
required
What is Reported?
Three Open Payments Databases
• General
• Ownership
• Research
General Database
What information is reported?
•
•
•
•
•
Covered recipient name and business address
NPI Number and Specialty
State professional license #(s), at least one State
The amount and date of payment
Form of Payment
– Cash or cash equivalent
– In-kind items or services
– Stock, stock option, ownership interest
– Dividend, profit or other return on investment
• Nature of such payment (16 categories)
– If payment or transfer relates to marketing, education, or research of a
drug, device, biological, or medical supply, the related product must also
be identified
• Product Market Name and NDC Code
• Context: 200 characters
General Database
Nature of Payment
Travel
Gifts
Lodging
Entertainment
Consulting
Food and Beverage
Research
Speaking
Ownership
Interests., Royalties
and Licenses
Education
Ownership
• Employees of manufacturers, as well as their
immediate family members, with ownership
interests in privately held companies with
marketed products must be reported:
– Spouse
– Natural or adoptive parent, child or sibling
– Father, mother, daughter, son, brother or sisterin-law
– Stepparent, stepchild, stepbrother, or stepsister
– Grandparent or grandchild
– Spouse of grandparent or grandchild
• CMS gives an exemption on this requirement if the manufacturer or GPO
does not know of the relationship
• Only 224 of the reported entries in 2013 were owned by immediate
relatives, worth $51,675,944
Research
• All payments made in connection
with an activity that meets the
definition of research, and that
are subject to a written
agreement, contract, or research
protocol, or both, are reported
under “special rules.”
• List Principle Investigators under
total amount of the study
• Certain research payments made
to a CR by an AM under a product
research or development
agreement may be delayed from
publication on the Web site.
Must also report indirect payments
• Direct Payment
– Manufacturer pays physician or hospital directly
• Indirect Payment
– Manufacturer pays a 3rd party directly, the 3rd party then
pays a physician or Hospital
Payment Exclusion Categories
1. Indirect payments where AM is
unaware of identity of CR
2. Payments <$10 unless annual
>$100
3. Product samples, vouchers,
coupons
4. Educational materials/items that
directly benefit patients or intended
for patient use, value of services to
educate patients
5. 90 day equipment loans
6. Items/services under contract
warranty
7. Physician as patient
Continuing Medical Education
• The Sunshine Act first included a specific exemption for accredited
CME speaker fees if the program was accredited by one of five
specific bodies. CMS deleted this original language, but effectively
incorporated the CME exemption for speakers and attendees at
accredited CME events.
• Where sponsors do not “require, instruct, direct, or otherwise cause
the [CME] event provider to provide the payment…to a covered
recipient,” such payments are not reportable. CMS indicates
manufacturers meet this threshold when they do not (1) select or
pay the speaker directly, or (2) provide the CME provider with a
distinct list of speakers to consider.
• CMS notes they “will provide sub-regulatory guidance specifying
tuition fees provided to physician attendees that have been
generally subsidized at continuing education events by
manufacturers are not expected to be reported.”
Review & Dispute
• Prior to data publication in June 2015,
register with the Open Payments
system at cms.gov/openpayments in
order to review data that will be made
public, resolve data disputes, and
request data corrections during the
45-day review and dispute period.
• The Open Payments system will alert the reporting applicable
manufacturer or GPO of the dispute. After being alerted, the AM
or GPO will work with you directly to resolve the dispute. Any data
that needs to be changed will be re-reported. AMs and GPOs then
have 15 days to resolve and submit corrections. Disputed data that
is not resolved by the end of the 15-day period will be published on
the public website, but will be marked as disputed.
• In 2014 only 4.8 percent of physicians and 29.8 percent of
hospitals registered to review their data
2013 Data
What Can We Glean From Year 1?
A lot of missing payments
Total
Identified
Yet to Be
Reported
Percent
Missing
546,000
360,000
186,000
34.1%
Teaching Hospitals
1,360
873
487
35.8%
AM’s and GPO’s
1,419
1379
40
02.8%
Records
4,400,000,
2,700,000
1,700,000
38.7%
Amounts
$3.5 Billion $1.3 Billion $2.2 Billion 62.8%
Entity
Physicians
Does not include $1.1 billion of disputes and delayed research (full total = $4.6 billion)
Source: Compiled from U.S. Department of Health & Human Services data
openpaymentsdata.cms.gov
Many Payments Lack Names
Citing data
inconsistencies and
uncertainty, the
federal government
withheld the names
of doctors and
hospitals for 40% of
payments. This
chart shows the
percent of money
that was withheld.
– ProPublica 10/1/14
Most Payments Were Very Small
Greater than $100,
356,617, 14%
Less than $10,
366,113, 14%
Between $20$100, 562,241,
21%
Between $15-$20,
465,816, 18%
Payments
Number
<$1.00
24,897
<$.50
9,437
<$.01
646
Between $10-$15,
875,887, 33%
Source: Compiled from U.S. Department of Health & Human Services data openpaymentsdata.cms.gov
Estimate to Collect Information
• Centers for Medicare and
Medicaid Services
estimated that the
program would cost
physicians and industry
$629,479,56
1 over 3
years
Source: Open Payments Final Rule, Federal Register February 2013
Payments by Recipient Type
[VALUE],
[PERCENTAGE]
Physicians
[VALUE],
[PERCENTAGE]
Teaching Hospitals
Payments by Physician Type
Identified 2013 Data
Doctor of Dentistry
8%
Chiropractor
0%
Doctor of
Optometry
0%
Doctor of
Osteopathy
2%
Doctor of Podiatric
Medicine
3%
[CATEGORY NAME]
[PERCENTAGE]
Source: Compiled from U.S. Department of Health & Human Services data openpaymentsdata.cms.gov
Payments by Company
Courtesy Huron Consulting
Nature of Payments Detail
Nature of Payments
Research
Royalty or License
Services Other than Consulting
Consulting Fee
Food and Beverage
Travel and Lodging
Grant
Education
Honoraria
Gift
Faculty at Non Accredited Event
Current or prospective ownership or
investment interest
Facility Fees (TH Only)
Speaking at Accredited Event
Charitable Contribution
Entertainment
Total
Total
$1,486,242,674
$302,474,187
$202,557,342
$158,200,318
$92,816,309
$74,075,322
$38,126,886
$26,667,323
$25,544,566
$19,213,865
$14,844,660
Percent of Total
60.34%
12.28%
8.22%
6.42%
3.77%
3.01%
1.55%
1.08%
1.04%
0.78%
0.60%
$10,567,522
0.43%
$4,744,889
$4,221,536
$2,531,755
$157,333
$2,462,986,488
0.19%
0.17%
0.10%
0.01%
Source: Compiled from U.S. Department of Health & Human Services data openpaymentsdata.cms.gov
Hospital Payments/Category
Category
Research
Royalty or License
Grant
Speaking/Faculty/NonCME
Consulting Fee
Gift
Education
Facility Fees (TH Only)
Charitable Contribution
Honoraria
Food and Beverage
Speaker/Faculty, Non Accred
Total
Raw Data: Courtesy of Huron Consulting
Nationwide
% Total
New Jersey % Total
$175,614,096
42.18% $1,519,736 68.92%
$147,707,114
35.48%
$100,000
4.54%
$32,960,055
7.92%
$72,040
3.27%
$16,776,971
4.03%
$134,872
6.12%
$14,402,011
3.46%
$44,266
2.01%
$13,871,646
3.33%
$77,678
3.52%
$7,143,789
1.72%
$44,097
2.00%
$4,744,889
1.14%
$79,155
3.59%
$2,356,541
0.57%
$111,650
5.06%
$174,567
0.04%
$14,720
0.67%
$112,622
0.03%
$6,453
0.29%
$13,002
0.00%
$250
0.01%
$416,332,265
$2,204,917
0.53%
Payments by Physician Specialty
Rank Physician Specialty
1
2
3
4
5
6
7
8
9
10
Orthopedic Surgery
Internal Medicine
Cardiology
Neurology
Neurological Surgery
Gastroenterology
Psychiatry
Endocrinology, Diabetes
and Metabolism
Family Medicine
General Surgery
# Payments
Total
Average
52,962
379,165
149,271
82,503
21,837
88,981
84,901
$73,165,243
$24,562,672
$21,797,429
$15,825,438
$13,507,585
$13,468,983
$13,465,762
$1,381
$65
$146
$192
$619
$151
$159
54,811
$12,195,751
$223
387,290
37,268
$10,905,193
$9,934,689
$28
$267
Open Payments General Payment Database (Identified Records) 2013
General Payments to Hospitals in NJ
Teaching Hospital Name
Masked by CMS
Ahs Hospital Corp.
Princeton Healthcare System
Deborah Heart And Lung Center
Robert Wood Johnson University Hospital, Inc
Meridian Hospitals Corporation
The Cooper Health System
Englewood Hospital And Medical Center
Hudson Hospital Opco Llc
St Josephs Hospital And Medical Center
Saint Barnabas Medical Center
ATLANTICARE REGIONAL MEDICAL CENTER
SOMERSET MEDICAL CENTER
Trinitas Regional Medical Center
South Jersey Hospital Inc
Raw Data: Courtesy of Huron Consulting
Total Payment
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
336,351.06
54,126.67
50,249.54
31,763.00
28,101.93
21,035.48
20,255.26
18,207.22
14,387.72
13,364.00
13,266.58
13,112.06
10,517.04
7,253.56
6,934.34
% of Total
49.09%
7.90%
7.33%
4.64%
4.10%
3.07%
2.96%
2.66%
2.10%
1.95%
1.94%
1.91%
1.54%
1.06%
1.01%
Ownership Interests by Specialty
Rank
Specialty
Invested
Current
Interest
% Return
1
2
3
4
5
Orthopedic Surgery
Obstetrics & Gynecology
Gastroenterology
Cardiovascular Disease
Ophthalmology
Surgery/Hospice and Palliative
Medicine*
Neurological Surgery
Anesthesiology
Radiology/Diagnostic Radiology
Urology
Internal Medicine
$51,458,363
$44,833,476
$44,407,718
$36,413,038
$8,408,034
$73,839,114
$42,701,714
$41,910,224
$35,744,398
$31,160,069
43.5%
-4.8%
-5.6%
-1.8%
270.6%
$0
$21,733,719
Infinity
$13,353,588
$4,057,986
$2,068,745
$6,196,856
$4,490,437
$20,818,359
$13,718,687
$10,794,529
$10,783,906
$8,959,934
55.9%
238.1%
421.8%
74.0%
99.5%
6
7
8
9
10
11
* Represents 1 investor and one company
Ownership Interest NJ Docs
Last Name
Piskun
Hensle
Reiley
Dello Russo
Kindermann
Parekh
Lanteri
PETROSINI
HOLLAWELL
GORMLEY
DWYER
Husserl
ZANGER
Piccoli
Initial Investment
Current Value
$0
$1,150,224
$1,150,224
$1,334,150
$144,000
$450,000
$37,700
$286,244
$203,002
$200,000
$114,400
$104,418
$103,392
$199,996
$21,733,719
$4,208,291
$4,098,921
$1,332,500
$790,800
$581,250
$576,179
$367,906
$289,815
$200,000
$114,400
$104,418
$103,392
$102,562
Research
Policy and Medicine 10/1/14
Research by Specialty
Rank
Specialty
1
2
3
4
5
6
7
8
9
10
11
Medical Oncology
Internal Medicine
Ophthalmology
Hematology & Oncology
Pediatric Hematology-Oncology
Pulmonary Disease
Other Service Providers/ Specialist
Radiation Oncology
Family Medicine
Rheumatology
Surgery
Total Research
Payments
$5,121,943
$3,389,810
$3,247,256
$3,180,196
$3,017,692
$2,793,114
$2,491,590
$2,391,436
$2,249,035
$1,362,191
$1,250,718
Research Payments to NJ Teaching Hospitals
Teaching Hospital
Research
Payments
to NJ
Percent
Payment
Teaching Hospitals
of Total
Masked by CMS
$698,014
45.9%
Ahs Hospital Corp.
$233,317
15.4%
University of Medicine and Dentistry of NJ
$171,322
11.3%
The Cooper Health System
$103,762
6.8%
Saint Barnabas Medical Center
$76,763
5.1%
Meridian Hospitals Corporation
$60,343
4.0%
Deborah Heart And Lung Center
$43,786
2.9%
Saint Michael'S Medical Center
$33,300
2.2%
Centrastate Medical Center Inc.
$23,412
1.5%
Winthrop University Hospital Association
$16,250
1.1%
Englewood Hospital And Medical Center
$13,900
0.9%
Open Payments 2013 Data – Policy and Medicine
A Look at Massachusetts
Total Companies Reporting in Massachusetts
Total
Payments
Average
Payment
Median
Payment
2010
2011
2012
Difference
2011-2012
Difference
2010-2012
$64,572,273
$62,451,397
$55,615,073
-12%
-13.9%
17,162.00
16,443.00
19,549.00
16%
13.9%
$3,763
$4,265
$2,845
-50%
-24.4%
$124
$147
$124
-18%
0.0%
Massachusetts Top 20 Companies
2010
Total Payments
# of Payments
Payment Size
Recipients
Payment/Recipient
2011
2012
$38,038,051 $35,106,567 $27,162,992
18,715
15,956
18,213
$2,032
$2,200
$1,491
5,836
4,824
6,706
$6,518
$7,277
$4,051
% Change % Change
2011-2012 2010-2012
-23%
14%
-32%
39%
-44%
-29%
-3%
-27%
15%
-38%
Breakdown of Payments 2012 – Massachusetts
Other
4%
Food
3%
Marketing Studies
3%
Charatable
Donantions
2%
Education/Training
4%
CME Conferences
9%
Grants/Education
17%
Compensation
58%
Mass Education 2010-2012
Charitable Donation Total
2010
2011
2012
3 Years
%
$2,949,818
$1,109,588
$1,447,269
($1,502,549)
-51%
CMEs, third-party Conferences,
$7,647,238 $8,908,006 $5,085,729 ($2,561,509)
or Meetings Total
Compensation for Bona Fide
$35,070,883 $32,627,559 $32,097,007 ($2,973,876)
Services Total
-33%
-8%
Education/Training Total
$2,516,437
$2,509,912
$2,170,666
($345,771)
-14%
Food Total
$1,181,526
$1,114,095
$1,556,465
$374,939
32%
Grants/Educational Gifts Total
$11,491,092 $11,717,624
$9,642,140
($1,848,952)
-16%
Marketing Studies Total
$1,222,770
$704,989
$1,507,442
$284,672
23%
Other Total
$2,345,808
$3,759,625
$2,059,638
($286,170)
-12%
Grand Total
$64,425,572 $62,451,397 $55,566,356 ($8,859,216)
-14%
Breakdown of Recipients 2012 Massachusetts
Pharmacists
Nurses
2%
3%
Clinical Labs
13%
Accute Hospital
19%
Clinic
5%
Dentist
1% NP's
1%
PA's
0%
Podiatrists
0%
Chiropractor
0%
Optomitrists
0%
Physicians
56%
Massachusetts Top 50 Physicians
2010
2011
2012
$8,874,882
$8,692,011
$8,878,302
Average
$177,497
$181,510
$177,566
Median
$164,893
$152,926
$140,354
-2.06%
2.10%
Total
Change
Massachusetts Top 50 Physicians
Of Massachusetts
those listed four times
in theTop
top 50
only 10 for all
four years
Data
50–Doctors:
2009-2012
Physicians
Average/Year
1 Year
2 Years
3 Years
4 Years
59
25
17
10
$135,746
$155,017
$154,346
$187,811
Massachusetts Hospital Data Top 50 Hospitals
2010
Total
2011
$16,715,739 $12,744,273
2010-2011
Difference
2012
2011-2012
Difference
2010-2012
Difference
-24%
$5,218,848
-59%
-69%
Average
$303,922
$245,082
-19%
$89,980
-63%
-70%
Median
$14,290
$5,419
-62%
$5,729
6%
-60%
Reaction
Reaction Thus Far
So Much For Transparency, Open Payments Database Toggles the Mind
– The Wall Street Journal
Another Government Website Rollout That Is Found Wanting
– The New York Times
Doctor Payments Show Little Value at Launch Time – US News
Open Payments Site Launches to User Complaints – Health Leaders
The Open Payments or “Sunshine Act” is
designed to prey on the ancient physician
prejudice that earning money is somehow
beneath the profession, much like
physician advertising was once taboo and
frowned upon by the old guard.
–Physicians Practice Magazine
Augusta Examiner
As the inventor of a solution that preserves eye tissue for
surgery, Bloomington’s Dr. Richard Lindstrom has given
sight to legions of people worldwide and become highly
sought after for speeches and consulting deals.
He has been handsomely rewarded for his work.
Lindstrom received $330,452 in payments just during the last
five months of 2013 from companies whose ophthalmology
products he prescribes for patients, according to a newly
published federal database. (Minneapolis Star Tribune)
Innuendos
“…doctors reaping over half a million dollars each…”
“…murky financial ties between physicians and the health care industry…”
“…lucrative arrangements are just some of the findings…”
“For some doctors, treating patients isn’t the only way to make money.”
“A Michigan plastic surgeon was paid more than $300,000 to travel the
world teaching doctors about new cosmetic products like a breast implant.”
“The retired chief executive of the Mayo Clinic, who once helped write its
conflict of interest policy, received more than $237,000 in compensation
for serving on multiple corporate boards.”
Going Forward:
Who Will Use The Data?
• Prosecutors
–
–
–
–
Anti kickback
False claims
Stark II
Consumer protection
• Plaintiff Attorneys
– Malpractice and product
liability suits
– Qui Tam
– Divorce and business
– Consumer protection suits
• Media
• IRS
• Employers
• Journal Editors
• FDA/PHS/CDC/NIH
• Academic Medical
Centers
• Medical Societies
• Students
Recommendations
Physician Recommendations
• Be sure to utilize the review period.
This past year, physicians saw that
improper payments were paired next
to their names.
• Payments were also mixed between
doctors with similar first and last names.
• CMS took Open Payments offline to work out these problems.
They de-identified at least one-third of the system’s data
because of potential accuracy issues.
• Begin the Open Payments registration process early;
physicians this past year indicated the process was very time
consuming and had some technical glitches.
Faculty Considerations
• Updated Disclosure Forms that are accurate
• Is the NPPES Data Correct
• Register for Open Payments
• Do I know all the interactions that I have had
• Do I know the “value” of travel, lodging and meals for
non CME activities (Consulting, IRB, Non Accredited)
• Am I compliant with Intuitional Requirements
• Omission is a future problem
Prepare Your Faculty
For Speakers, Consultants and Researchers
• Have signed copies of all agreements for services
– Make sure agreements comply with applicable antikickback statues
– Compensation needs to reflect fair market value for
services delivered
• Keep a running file of your events, honorarium payments
• Request a cost statement for each event from the
company hiring you – including, meals, all forms of
transportation, and lodging
Teaching Hospital Considerations
• Know which departments and offices are interacting with
industry
• Manage all research and consulting contracts through a
central office to ensure accuracy
• Conduct internal FMV tests to ensure that you are now
over billing (Kickback)
• Secure access to key faculty accounts on open payments
– do the hard work for faculty
• Review the data when it comes out – There may be some
surprises
• Know your disclosure policies may not match Sunshine
Database (Cleveland Clinic)
• Review your Contracts for Clauses Around Sunshine
Further Recommendations
• While the Open Payments database was missing a lot of
data, CMS has reportedly improved its technical
processes. In June of next year, many more payments will
likely be posted.
• If patients ask about these relationships, help your faculty
to understand to be honest. Focus on why working with
industry is important:
– Practicing surgeons are a vital source of information for
companies and are also essential for training other
surgeons going forward
– Innovative devices and therapies stem from collaboration
Remember Other Disclosures
• Physicians and Institutions financial relationships with medical
products industry is required to be reported by numerous
organizations:
–
–
–
–
–
–
–
–
National Institutes of Health (NIH)
Food and Drug Administration (FDA)
Universities
Hospitals
Accredited Education
Medical Journals
Institutional Review Boards
Associations
• States with Disclosure Laws: Massachusetts, Vermont, Minnesota,
West Virginia, Connecticut, D.C.
• International Disclosure: Several countries have adopted similar
Sunshine language; dozens of European member companies have
adopted disclosure provisions
Remember Other Laws
•Anti Kickback
•False Claims Act
•IRS Reporting
•Stark
•State Regulations
Open Payments Resources
• Centers for Medicare and Medicaid Services
– http://www.cms.gov/Regulations-and-Guidance/Legislation/National-Physician-PaymentTransparency-Program/index.html
• Policy and Medicine
– http://www.policymed.com/physician-payment-sunshine-act/
• American Medical Association
– www.ama-assn.org/go/sunshine
• Partners for Healthy Dialogs
– http://www.healthydialogues.org/health-care-professionals
• Advamed
– http://advamed.org/issues/16/physician-payments-sunshine-law
• CME Coalition (Including Guide and Q&A)
– http://cmecoalition.org/resources
• Medscape (CME Accredited Web courses)
– http://www.medscape.org/viewarticle/780900
– http://www.medscape.org/viewarticle/807771
Life Science Compliance Update
• False Claims Act and Qui
TamDevelopments
• Health Care Fraud Alerts and
Enforcement Trends
• Corporate Integrity
Agreements
• Physician Payments Sunshine
Act
• FDA Guidance and Warning
Letters
• International Regulations
and Enforcement
• Best Practices For
Compliance
www.Lifescicompliance.com
For More Information
Thomas Sullivan
[email protected]
202-309-3507
www.policymed.com
www.rockpointe.com