CMS Struggles to Fix Sunshine System

November 16, 2014
Jill Wechsler, Pharm Exec's Washington Correspondent

Jill Wechsler is Pharm Exec's Washington Corespondent

Pharmaceutical Executive

The feds have “a long way to go” to get the Open Payments system operating effectively and user friendly, according to officials in charge of the financial disclosure program.

The feds have “a long way to go” to get the Open Payments system operating effectively and user friendly, according to officials in charge of the financial disclosure program. “Sunshine” went live September 30, 2014, as scheduled, but incomplete and contradictory data listings made it necessary to withhold nearly one-third of financial transaction reports from pharma and medical device companies.

“This was our first shot at getting the data out there,” acknowledged Doug Brown, acting director of the Data Sharing & Partnership Group at the Center for Program Integrity, which runs the Open Payments program for the HHS Centers for Medicare and Medicaid Services (CMS).

Brown explained at the November Pharmaceutical Regulatory and Compliance Congress in Washington, D.C. how CMS is fixing the program for next year. Of the 4.4 million records posted by Open Payments Sept. 30, 1.7 million records (involving $2.2 billion in payments) had to be de-identified because of discrepancies in physician identifiers. In addition, CMS did not post 199,000 records - most (190,000) delayed for legitimate research purposes (the program permits companies to postpone disclosure of payments to investigators conducting clinical studies until the research and product registration is complete). About 9,000 records – which involve a notable $500 million in payments - remained under dispute, but are scheduled to be resolved and posted in December, Brown explained.

CMS expects manufacturers to correct and resubmit all the incomplete, withheld data from 2013 over the coming months for disclosure June 30, 2015, at the same time financial transactions for 2014 will be made public. Pharma companies have been able to retrieve their de-identified data from CMS, but many say they can’t detect errors and remain uncertain about what corrections are needed. While Brown’s office continues to refine methods for correctly distinguishing health professionals with similar names, manufacturers will be updating their systems for collecting and reporting 2014 payment information to CMS next February-March.

So far, the errors and omissions have limited the program’s value to industry and transparency advocates alike. ProPublica reporter Charlie Ornstein noted at the Compliance Conference that his website is not posting this year’s Open Payments data because it is “too incomplete and inaccurate,” and he advised other journalists to take a similar approach. A general analysis by Ornstein indicates that three-fourths of reported payments involve royalty/license fees, consulting fees and promotional speaking; the vast number of reports detail food, travel, honoraria and other fees, but those transactions involve only about one-fourth of the money.  The 80/20 rule seems to apply here, with 80% of transactions involving 20% of payments (and vice versa).

CMS added an online search tool to the system in October, which makes it possible to identify physicians and hospitals by name, as well as certain payment categories. But it’s still hard to calculate aggregate payments to an individual doctor, and, as noted above, the data is incomplete.

The early results indicate that much of industry payments to physicians involve research and royalties – which only extreme cynics would consider unhealthy and inappropriate. Collecting and reporting all these transactions is a real cost for industry – especially for handling disputes and for the many small biotech and medical device firms new to this process. Pharma companies would like a higher reporting threshold of $50 to eliminate the need to track the thousands of $10 transactions that don’t add up to much money. Marketers also want more “context” to be posted with payment information to clarify the nature and value of larger financial transactions.

For now, CMS does not plan further program changes, Brown said. A CMS final rule issued Oct. 31 [see PharmExec blog, Nov. 3, 2014] made some late revisions to tracking and disclosure policy, and there may be further clarification of the program’s methods for identifying recipients. But broader policy revisions will have to wait - unless Congress decides to include Open Payments issues as part of broader Republican legislation addressing Obamacare.