Teach­ing hos­pi­tals got $315 mil­lion in in­dus­try pay­ments, CMS data show

Modern Healthcare - - NEWS - By Jaimy Lee

A new era in health­care trans­parency opened last week when the fed­eral gov­ern­ment for the first time pub­lished de­tailed in­for­ma­tion about the fi­nan­cial re­la­tion­ships be­tween med­i­cal prod­uct man­u­fac­tur­ers and physi­cians and teach­ing hos­pi­tals.

The goal of the new Open Pay­ments web­site, man­dated by the Physi­cian Pay­ments Sun­shine Act, is to let the pub­lic find out about fi­nan­cial ties be­tween med­i­cal providers and in­dus­try that could lead to con­flicts of in­ter­est and in­ap­pro­pri­ate clin­i­cal care. The web­site was rolled out Sept. 30 with­out any ma­jor glitches, though crit­ics said it was slow and not user-friendly for the gen­eral pub­lic.

A Mod­ern Health­care anal­y­sis of the data found that med­i­cal de­vice and drug com­pa­nies gave teach­ing hos­pi­tals more than $315 mil­lion dur­ing the last five months of 2013 in re­search fund­ing and gen­eral pay­ments in­clud­ing roy­al­ties, grants, gifts, and fa­cil­ity rentals.

Two-thirds of the fund­ing—$209.2 mil­lion—went to­ward gen­eral pay­ments, while $107.9 mil­lion was for re­search.

“We cer­tainly hope that the pub­lic at­ten­tion and scru­tiny around th­ese types of pay­ments to teach­ing hos­pi­tals will raise ques­tions about the ap­pro­pri­ate­ness of cer­tain types of pay­ments,” said Wells Wilkin­son, se­nior pol­icy an­a­lyst at Com­mu­nity Cat­a­lyst, a con­sumer ad­vo­cacy or­ga­ni­za­tion.

The site was man­dated by the Sun­shine Act, a pro­vi­sion of the Pa­tient Pro­tec­tion and Af­ford­able Care Act that re­quires dis­clo­sure of trans­fers of value larger than $10. The CMS or­ga­nized the records sub­mit­ted by man­u­fac­tur­ers into three cat­e­gories: re­search pay­ments, non­re­search gen­eral pay­ments and physi­cian own­er­ship or eq­uity. The CMS has pro­posed re­quir­ing dis­clo­sure of pay­ments by man­u­fac­tur­ers to doc­tors pro­vid­ing ac­cred­ited con­tin­u­ing med­i­cal ed­u­ca­tion, but those data were not in­cluded in the first round.

In to­tal, man­u­fac­tur­ers made 4.4 mil­lion pay­ments to­tal­ing at least $3.5 bil­lion to 546,000 physi­cians and 1,360 teach­ing hos­pi­tals from Aug. 1, 2013, to Dec. 31, 2013, ac­cord­ing to the CMS. The gov­ern­ment with­held about 40% of the records over ac­cu­racy con­cerns and plans to publish them next year.

Most news or­ga­ni­za­tions fo­cused their cov­er­age on in­di­vid­ual physi­cians who re­ceived large pay­ments from man­u­fac­tur­ers, such as the $7.4 mil­lion re­ceived by San An­to­nio ortho­pe­dic sur­geon Dr. Stephen Burkhart, mostly in roy­alty pay­ments from Arthrex for prod­ucts and tech­niques he de­vel­oped for shoul­der arthroscopy pro­ce­dures, the Wall Street Jour­nal re­ported.

But this is the first time that data about ties be­tween aca­demic med­i­cal cen­ters and man­u­fac­tur­ers have been made pub­lic. Some ex­perts said the dis­clo­sures aren’t likely to raise eth­i­cal ques­tions but may be used by man­u­fac­tur­ers and hos­pi­tals for business pur­poses. Most gen­eral pay­ments are for roy­al­ties, li­cens­ing fees, grants and rental fees as­so­ci­ated with ed­u­ca­tion.

“Most aca­demic in­sti­tu­tions are re­ally mo­ti­vated to ad­dress re­search con­flicts and how that re­flects on the in­sti­tu­tions,” said Danielle Sloane, a part­ner at law firm Bass, Berry & Sims.

City of Hope, a can­cer re­search hos­pi­tal in Duarte, Calif., re­ceived about $122 mil­lion in gen­eral pay­ments, with 99% at­trib­uted to roy­al­ties or li­cens­ing agree­ments.

The hos­pi­tal re­ceived more money than any other hos­pi­tal in the gen­eral pay­ments cat­e­gory. “City of Hope re­ceives roy­alty rev­enue from com­pa­nies that li­cense and com­mer­cial­ize City of Hope’s tech­nolo­gies,” a spokes­woman said in a writ­ten state­ment. Most of that comes from one li­cens­ing ar­range­ment with Ge­nen­tech, she added.

Dana-Far­ber Can­cer In­sti­tute, a Bos­ton can­cer hos­pi­tal, col­lected the most re­search pay­ments of any aca­demic cen­ter, gar­ner­ing $14.9 mil­lion, ac­cord­ing to the Open Pay­ments web­site. It re­ceived three of the 10 largest pay­ments by all teach­ing hos­pi­tals, to­tal­ing $7 mil­lion from Bris­tol-My­ers Squibb Co. for three clin­i­cal tri­als.

But a Dana-Far­ber spokes­woman said the hos­pi­tal is dis­put­ing some pay­ment in­for­ma­tion re­ported by Bris­tol-My­ers Squibb be­cause the val­u­a­tion of the drugs sup­plied for clin­i­cal tri­als is in­ac­cu­rate and the to­tal may have in­cluded drugs sup­plied to other hos­pi­tals. “We en­cour­age CMS to re-eval­u­ate whether pub­lish­ing the com­mer­cial value of drugs sup­plied in-kind for clin­i­cal tri­als … is truly mean­ing­ful data in this con­text,” the spokes­woman said.

De­spite such con­cerns, sup­port­ers of the Sun­shine Act say the Open Pay­ments launch is an im­por­tant first step in pro­vid­ing trans­parency around in­dus­try pay­ments to health­care providers. The CMS said it plans to in­tro­duce new tools to make the Open Pay­ments data­base eas­ier to use. Some ob­servers, how­ever, ques­tion how many con­sumers will pay at­ten­tion to the dis­clo­sures, and say the data more likely will be used by gov­ern­ment in­ves­ti­ga­tors, in­sur­ers and health sys­tems track­ing doc­tors’ prac­tice pat­terns.

Some ex­perts said the dis­clo­sures of the ties be­tween aca­demic med­i­cal cen­ters and man­u­fac­tur­ers aren’t likely to raise eth­i­cal ques­tions, but may be used by man­u­fac­tur­ers and hos­pi­tals for business pur­poses.

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