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Predicting the Impact of the Physician Payment Sunshine Database

This blog by is William Sacks, Vice President, a co-founder of HCCS, Inc., a HealthStream company.

The Physician Payment Sunshine Act requires that all manufacturers of drugs, devices, and biological and medical supplies covered by federal health care programs report all financial relationships with physicians and teaching hospitals to the Centers for Medicare and Medicaid Services (CMS). The goal of the law is to enhance patient safety by increasing the transparency of financial relationships between health care providers and pharmaceutical manufacturers.

Pharmaceutical and Medical Device companies are required to track and report all payments or “transfers of value” to physicians and teaching hospitals that exceed $10.00.

Unless something changes in the next month, on September 30th, 2014, CMS will make available the searchable, public-facing website displaying payment data from pharmaceutical and medical device companies to physicians and teaching hospitals. Despite some glitches in the pre-release website that physicians can use to review and dispute the data, CMS is holding to its planned publication date.

Even though this data will be incomplete (it covers only the period from August-December 2013, and as much as one third of the data gathered is being withheld temporarily due to questions of data accuracy), there will be millions of payments reported to tens of thousands of physicians from thousands of manufacturers.  With just a month to go, we can begin to speculate on the likely impact be of the publication of this data. (Note: Even if the release is delayed, as ICD-10 has been several times, there is every expectation that the data willeventually be released.)

The database will receive significant publicity. The “Sunshine” database was a part of the
Affordable Care Act and it is likely that the Obama administration will want to put a positive spin on its efforts to increase transparency, reduce cost, and show that it can do something right, after the healthcare.gov website disaster. This is not to say that everything will go right, but the website will be publicized, either by proud supporters if it does go well, or gloating
detractors if it does not.

Local newspapers and other media outlets will devour this data, looking for payments they can describe as “scandalous”. Nothing sells papers like scandal, and few local outlets have the expertise, or will take the time and space to explain in detail the complexities of payments for legitimate consulting, research or continuing education.

Some hospitals will be surprised and embarrassed by what is revealed. Many hospitals will find that members of their voluntary and even their employed physician staff have been receiving tens or hundreds of thousands of dollars from industry. Hospital/Physician relationships in some cases will be tested when hospital administrators receive calls from the local press asking about payments to physicians that the hospital knew nothing about.

Some patients will begin to ask questions. Physicians who are included in the database should be prepared to explain to their patients what legitimate services these payments were for. Many patients may react favorably, happy to see that their personal physician was highly enough regarded by industry to be providing consulting to them. Others will be more skeptical, and physicians should be prepared to allay their concerns.

Direct payments from industry to physicians may be reduced in the next year. As the public becomes more aware of the influence of industry on education, training, and research, industry dollars may begin to shift from individuals to institutions, eliminating direct influence and potential embarrassment. This is, after all, what the goal of the law has been all along.

Hospitals will want to get a handle on this information going forward. Hospitals that have done a half-hearted job of managing conflicts of interest in the past may become motivated to revamp their policies and procedures and upgrade their infrastructure to identify and manage potential conflicts of interest in their medical staff.

One thing is certain, payments to physicians will be under increased scrutiny and healthcare facilities would be wise to have the detailed information needed to address that scrutiny.  
Healthcare professionals should be prepared to manage the change coming, as financial relationships between industry and medicine are made available for all to see.

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The HCCS COI-SMART system provides comprehensive tools for tracking and managing Conflict of Interest (COI) disclosures. COI-SMART provides for the development of multi-level branching questionnaires, automated assignment of reviewers, the development of COI management plans, and data mining tools for auditing, tracking and reporting on potential conflicts of interest.

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