On August 1, manufacturers of pharmaceuticals and medical devices began tracking their payments to physicians and teaching hospitals. With at least $1 billion paid out in the last year by the country’s largest pharmaceutical companies, patients will finally have a chance to see whose money their physician is taking.
This annual data collection is a part of Obamacare and is known as the Open Payments Program (also known as the Sunshine Act). At the end of each year, the data will be sent to the federal Centers for Medicare & Medicaid Services (CMS), which will make it available for public review by the following September.
The goal of Open Payments is to promote transparency in the financial relationships between physicians and industry. Payments are currently difficult to tally because some companies only disclose to the extent necessary by state law (an initiative that started in Minnesota in 1993 but has only spread to a few states). Hospitals, including many in the Philadelphia area, have also responded by creating policies that prohibit physicians from accepting any gifts and by requiring annual disclosures of stock interests.
While the payments often represent legitimate compensation for research work or royalties from a patent, the concern is that some payments can affect professional judgment or create conflicts of interest for physicians. Studies have shown that doctors are more likely to prescribe brand name drugs when they receive payments from a manufacturer. The Department of Justice has conducted numerous investigations and achieved multi-million dollar settlements with some manufacturers that paid physicians to prescribe their drugs.
The Open Payments Program divides payments into 16 categories, including outlays for gifts, food, and educational materials. Any physician ownership or investment interests in the manufacturer must also be disclosed, including stock owned by a physician’s family members. There are exceptions for payments of less than $10 as long as they do not add up to more than $100 in a year, and for payments made to medical residents, physician assistants and nurse practitioners. (The full list of categories can be found here.)
Physicians and teaching hospitals will have a chance to review their data before it becomes public to dispute any information they feel is incorrect. However, to ensure that manufacturers don’t over-report, or that physicians and hospitals don’t over-dispute, severe fines will be imposed on anyone who doesn’t make a good faith report or who knowingly misrepresents information.
Some worry that the data won’t sufficiently show the difference between a physician receiving textbooks or a research grant, and the more troubling stock options or vacations. Even those who pass along their payment to charities will find their names posted on the website when it goes live next September, along with the amount and name of the charity.
Once Open Payments goes live, will it be informative? Without question, it will be. Could the data be misleading? There is a good chance it could be. However, the information can be used to improve communication between physicians and patients, which may inspire more patient confidence.
Ultimately, anything that can increase patient satisfaction is likely to strengthen the health care system.
Krystyna Dereszowska is a third year student at the Earle Mack School of Law at Drexel University concentrating in health law. She has previously worked at Health Care for All! in Maryland as an ACA outreach and education coordinator.
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