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Sunshine Data Helps Feds Uncover Fraud


$7.5 billion in pharma “transfers of value” made in 2015 has caught the attention of the DoJ and federal and state prosecutors investigating fraud. Jill Weschler reports.

The $7.5 billion in “transfers of value” made in 2015 by pharma companies to physicians and hospitals through the federal Open Payments program has caught the attention of the Department of Justice (DoJ) and federal and state prosecutors investigating fraud throughout the health care system. Enforcement agencies see this wealth of industry data as a ready resource for uncovering unusual arrangements or heavy spending to certain providers that can help identify illegal and questionable activities.

Investigators are looking for “outliers” among the millions of routine interactions involving speakers’ programs, consulting arrangements and sales calls disclosed under the “Sunshine” initiative. The program was established by Congress in 2010 to promote transparency in how relationships involving pharma and medical device companies and physicians may influence prescribing. Consequently, the Centers for Medicare and Medicaid Services (CMS) Open Payments system now has 28 million records on $16.8 billion in transactions for 2013 -2015. More than 1800 companies have submitted data on payment transfers to more than 800,000 physicians and 1200 teaching hospitals; data for 2016 will be added in June 2017.

CMS so far has not cited manufacturers for failing to submit data that is timely, accurate and complete, but it has sent letters to organizations that have failed to enroll in the program. As the system matures, though, CMS is indicating that it will become more aggressive. Attorney Seth Lundy of King & Spalding noted at CBI’s Forum on Transparency & Aggregate Spend in Washington, D.C. Aug. 16 that Congress expects CMS to fund the Sunshine program by collecting civil penalties from transgressors, which will encourage the agency to ramp up its enforcement efforts.

Such action may be spurred by the HHS Office of the Inspector General (OIG), which plans to issue a report in 2017 on how CMS is implementing Open Payments and the extent of problems due to missing or inaccurate data. The underlying issue is whether Medicare pays more for drugs and supplies ordered by physicians with strong financial relationships with pharmaceutical companies and hospital group purchasing organizations.

In addition, CMS is soliciting comments from industry and other stakeholders on a range of issues related to Open Payments policies & operations, and indicates it will propose regulatory changes in a year or so. Teaching hospitals and physicians complain about confusion over payment figures and would like to eliminate reporting on the value of medical education and on text books and journals, but such modifications are not likely.

Prosecutors examine data

Meanwhile, the growing volume of detailed, public reports now in the CMS data base provides a ready resource for investigators seeking information to support potential fraud cases. Prosecutors already are using Open Payments data in ongoing criminal and civil actions, with anti-kickback schemes a prime target. A recent case involved high payments by former pharma company employees to physicians for speaking engagements. Sunshine data appears highly suited to corroborate whistleblower allegations and to help prosecutors build bribery cases.

DoJ’s fairly new health care fraud strike force increasingly is analyzing health care system data to identify wrong-doing, pointed out Laura Kidd Cardova, assistant chief of the DoJ Criminal Division’s Fraud Section. She outlined at the Forum what investigators are looking for and how a company may take action to keep out of trouble.  In weighing how well a company supports compliance, she noted that investigators are interested in how management responds when preventive efforts fail. Does the company discipline or fire employees that break the rules? Does it change policies to prevent violative conduct? Does management “turn a blind eye,” she queried, or does it show commitment to “doing what’s right”?

Investigators are looking specifically for outliers in data reports related to certain activity. For example, Open Payments data for 2015 indicates a spike in industry payments to health professionals that are made as charitable contributions, along with grants to hospitals that appear to coincide with large sales transactions.

While compliance with Open Payments requirements may help a pharma company avoid trouble with enforcement agencies, the process of collecting and evaluating the vast amount of transaction data required by the program can be valuable to a firm’s internal assessment of risks and performance. This information can help a company analyze its interactions with healthcare professionals, as well as to ensure compliance with standards, codes of conduct and federal laws, pointed out Medispend president Michaeline Daboul.

These developments in the U.S. are fueling a global transparency movement, notes a white paper from Porzio LifeSciences. More highlights of the Open Payments program and its importance for corporate risk management is available from Tom Sullivan’s latest issue of Life Science Compliance.



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