Life Science Compliance Update

April 27, 2015

Physician Payment Sunshine Act: CMS Submits Report to Congress on First Year of Open Payments

Annual report to congress

Over the weekend, the Centers for Medicare and Medicaid Services (CMS) submitted their annual report to Congress on the first year of Open Payments. Each year, CMS is required to submit a report to Congress summarizing the payments made by applicable manufacturers and group purchasing organizations to physicians and teaching hospitals, as well as any penalties CMS assessed based on noncompliance with the program. The document is an interesting “inside-look” into CMS’s activity, and offers the industry an idea of where the agency is headed with Open Payments, including program implementation improvements, and, perhaps more importantly, where CMS is focusing their enforcement efforts. 

The report, available here, first provides a high level overview of the Open Payments reporting requirements, as well as highlights from the first year of the program. CMS includes a number of familiar summary statistics, including an aggregate payment chart as well as a 50+ page appendix that lists every reporting entity and the dollar amounts attributed to that company (Appendix B, p. 33).

Penalties

The report is most interesting where CMS provides insight into its auditing process and its plans for the future. Since companies first began instituting aggregate spend systems to comply with the Sunshine Act, the question has always been, how will CMS interpret the complicated law for enforcement purposes? For now, it seems like the agency is focusing on companies who simply did not register or submit any data. 

To date, CMS has not imposed any civil monetary penalties against any applicable manufacturers or GPOs for noncompliance. However, CMS states that they will launch targeted audits to identify applicable manufacturers and GPOs that should have submitted payment information but did not for 2013.

“As of the date of this publication, CMS is engaged in an effort to increase submission compliance of specific entities that did not submit data,” CMS states. “The near-term objectives of the Open Payments compliance strategy are focused on alerting applicable manufacturers and GPOs to their failure to register and submit data in the Open Payments system." (emphases added)

Beyond the first program year, applicable manufacturers and GPOs will be notified of their failure to report in a timely, accurate and/or complete manner, notes CMS.  

Open Payments System: Planned Improvements for Program Participants

As we have outlined in a number of articles, the Open Payments platform has not always been very user friendly from either the submitting entity's standpoint, or the reviewing physician's. CMS states that they are making multiple system enhancements based on stakeholder feedback to address this.

The report states that the 2015 reporting cycle will include the following upgrades:

  • More intuitive and user-friendly system screens, including just-in-time guidance via on-screen messages, which provide guidance directly at the point in the process where users require it.
  • Record download capability for applicable manufacturers and GPOs, allowing them to download records already reported into the Open Payments system.
  • Improved user identity management approach that ensures fully synchronized user accounts between EIDM and Open Payments.
  • Enhancements to enable deactivation of users no longer requiring access to the system.
  • Enhancements to the review and dispute functionality for physicians and teaching hospitals, including enabling covered recipient primary investigators to dispute their associations with the research study to which the reported payment was related.
  • Enhanced matching logic used to attribute transactions reported by applicable manufacturers and GPOs to correct covered recipients. The upgraded matching logic will minimize the chances of conflicting data being processed by the system and data being attributed improperly.

Summary of System Enhancements

Planned Enhancements to Open Payments Website

The report also lays out CMS’s planned enhancements to the Open Payments website. CMS plans to provide summary information of all Open Payments data in a data dashboard layout. Similar to the data summary fact sheet CMS already provides on the Open Payments website, this dashboard will give visitors an aggregate view of all Open Payments data by providing statistics such as total dollar amount of all payments and transfers of value, total number of entities that made payments, and total number of physicians who received payments.

CMS also continues to solicit stakeholder assistance to make enhancements to the public website. "Combining this feedback with 2014 data to be published in June, 2015, CMS will provide more opportunities for all site visitors, from the advanced data user to the general public, to discover meaningful information in the Open Payments data published by CMS," the report states.

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By outlining the Sunshine Act's reporting requirements, providing an overview of the first year of data collection, and shedding a bit of Sunlight onto CMS's own internal processes and future plans, the report is an important document for both those newly acquainted with Open Payments, and seasoned aggregate spend experts. 

CMS submitted this report to Congress in the midst of the "review and dispute" period of the current reporting year. During this time, physicians and teaching hospitals are able to enter Open Payments and review what records have been reported to ensure the accuracy of the information. In the report to Congress, CMS states that during the first year, 26,000 physicians registered in the Open Payments system to review payments attributed to them. This is out of 366,000 physicians--so only around 7 percent registered into the website. It will be interesting to see whether the second year of the dispute process attracts more interest from physicians.

Updated 4/27/2015: In addition to physician traffic to the review portal, CMS also cataloged their public website traffic. "[C]lose to 1 million visitors accessed Open Payments data through the search or Data Explorer tool" from September 31 through December 31, 2014, noted CMS. "Major news outlets such as the Wall Street Journal and the New York Times, professional journals including the Journal of the American Medical Association, and special interest groups like Pro Publica have all published articles, blogs, and data visualizations based on the published Open Payments data."

CMS also stated that the Open Payments website "hit an all-time high for pageviews in direct response to an increase in social media attention." During the week of February 8, 2015, to February 14, 2015, the Open Payments search tool and data explorer delivered approximately 2.5 million unique pageviews to site visitors, according to the report.

View CMS's report on Open Payments to Congress here.

April 24, 2015

Kickback Concerns Shouldn't Prohibit Manufacturers From Offering Assistance For Drugs Without Cheaper Alternatives

Infusion Association Asks For Kickback Safe Harbor For Expensive Biologics

NICA

Drug manufacturers routinely offer copayment coupons to reduce or eliminate the cost of patients' out-of-pocket payment for certain drugs. This financial assistance can be especially beneficial for patients who require expensive biologic therapies with large co-pays. Last year, the Department of Health and Human Services’ Office of Inspector General (HHS-OIG) released a report that such coupons may run afoul of the federal anti-kickback statute if they encourage the purchase of drugs paid for by government funded programs. Essentially, the OIG is worried that companies will offer Medicare patients co-pay reimbursement or other financial assistance to entice them to choose expensive brand-name drugs that the government will have to pay for, instead of readily available generics.

The National Infusion Center Association (NICA) recently released a position paper arguing against the government’s prohibition of such financial assistance for certain revolutionary biologic therapies. “The problem with the government’s well‐intentioned statute,” the Association argues, “is that it only works when there IS a cheaper generic alternative medication available.”

Indeed, “biologic specialty medications and IVIG [Intravenous Immune Globulin] have no cheaper generic alternative options, leaving many government funded patients backed into a financial corner with limited treatment options,” states the paper.     

NICA provides an illustration of how copayment assistance can help a person who takes Remicade for Crohn’s disease, for example. Remicade currently is not available in a generic (or “biosimilar”) form—the alternatives are “much older standby therapies,” notes the article.

A Medicare Patient receiving an every 8 week infusion of Remicade 600mg for a chronic condition known as Crohn’s disease.   At the time of this article, the Medicare reimbursement for this medication is approx: $4,590 per treatment or $32,132 per year (7 Treatments) for the medication alone. For a Medicare patient without a secondary insurance or supplemental coverage, the out of pocket cost for the medication (20%) is: $918 per treatment, or about $6,426 per year.  

“The majority of government payer patients who cannot afford the premiums for the secondary or supplemental coverage they need, will also not be able to afford the $6,000‐10,000 annual out of pocket cost for biologic or IVIG medications,” NICA states.

While NICA agrees that co-pay reimbursement or financial assistance programs could result in shifting patients to more expensive branded drugs, that risk simply doesn’t exist for biologics like Remicade. Thus, as a solution, NICA recommends that the OIG, HHS, CMS and other governing authorities should develop a clear cut safe harbor for manufacturers that allows patients with government funded health insurance to participate in manufacturer copayment financial assistance programs when there is not a cheaper generic alternative medication option available to the patient.

View the National Infusion Center Association’s full position paper here

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