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CMS Names Names in Disclosing Provider Payments

By John Reichard, CQ HealthBeat Editor, and Rebecca Adams, CQ HealthBeat Associate Editor

September 30, 2014 -- The Centers for Medicare and Medicaid Services (CMS) on Tuesday released a trove of data surrounding physicians and academic hospitals’ financial ties to drug and device makers, identifying recipients of 4.4 million payments totaling nearly $3.5 billion during the last five months of 2013.

Forty percent of the payments were stripped of personal identifiers because the agency could not verify that the payments were accurately attributed to a single physician or teaching hospital. Those payments are expected to be re-published with identifiers next year, said CMS Deputy Administrator Shantanu Agrawal on a call with reporters.

Records of another 199,000 payments were not released, either because a physician or hospital disputed the accuracy of the data during a review or because the law allows manufacturers to request a delay in data releases linked to ongoing research for up to four years or until the FDA has acted on the product’s approval.

CMS officials said they will unveil a consumer-friendly website within a month to make it easier for patients to search the records.

“This is just the first phase,” said Agrawal.

CMS emphasized such payments can hasten medical breakthroughs. But the release of the data is likely to put the medical establishment on the defensive. Doctors and teaching hospitals will face questions about whether the payments led to decisions to prescribe costly pharmaceuticals and order expensive medical procedures.

The financial links “do not necessarily signal wrongdoing,” CMS said in a statement announcing the first phase of the “Open Payments” program. But the agency implicitly acknowledged the transparency effort may arouse public confusion and suspicion.

“Open Payments does not identify which financial relationships are beneficial and which could cause conflicts of interest,” Agrawal said. “It simply makes the data available to the public.”

Consumers and health plans will be left to sort out how the payments affect the quality of care they receive.

“While these data could discourage payments and other transfers of value that might have an inappropriate on research, education, and clinical decision making, they could also help identify relationships that lead to the development of beneficial new technologies,” Agrawal said.

The sheer sum of the payments identified on Tuesday appeared to vindicate the efforts of Sen. Charles E. Grassley, the Iowa Republican who championed the data release, saying extensive financial connections within the health sector and their potential for inappropriate care were little understood.

Grassley has cited an example of a doctor who declined to reveal how much she received from the maker of the antipsychotic drug Seroquel.

The physician was behind a study recommending the drug for bipolar disorder in teenagers, even though only eight teens completed the study. She later disclosed receiving income from eight drug companies, including all five makers of drugs like Seroquel.”

Consumers Union policy analyst Lisa Swirsky praised the data release, saying drugmakers “need to put more focus on research, less focus on marketing, and we hope this kind of financial transparency will encourage that.”

But American Society of Hematology President Linda Burns warned that research and development efforts could be harmed.

Transparency is “critically important,” but industry sponsored research and development “has paved the way for significant scientific discoveries that have benefitted millions of patients.”

Similar releases of data in the past have not persuaded patients to drop their doctors if they value the relationship, said Dan Mendelson, president of the Avalere Health consulting firm. “I tend to believe that the value of this kind of a data release is in terms of long-term signaling to providers as opposed to wholesale change in which provider a patient is seeing.”

Mendelson added the life sciences industry already is shifting its strategy away from paying doctors as a form of marketing.

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