Physician Payments Sunshine Act

On February 22, the Wall Street Journal published an article about the tissue graft manufacturer MiMedx Goup, Inc. and its failure to report payments to physicians under CMS’s Open Payments Program established by the Centers for Medicare & Medicaid Services under the Patient Protection and Affordable Care Act (P.L. 111-148, Sec. 6002, amending Social Security Act Sec. 1128G), also known as the Physician Payments Sunshine Act (PPSA).  MiMedx executives claim that such reporting is unnecessary because the company’s products are tissues, which are not explicitly included in the regulatory definition of “covered drug, device, biological, or medical supply” to which the Open Payments Program apply (42 C.F.R. 403.902). As a result of falling outside this definition, MiMedx argues that it is not an “applicable manufacturer” required to disclose payments to physicians and teaching hospitals.  MiMedx’s product-specific reasoning aside, the company’s argument brings up an interesting point about the evolution of FDA-regulated products and the enforcement of the Open Payments Program requirements: Does the PPSA, and its corresponding regulations, require manufacturers of tissue-based therapies to disclose payment information? Continue Reading Are HCT/Ps a Dark Spot in the Sunshine Act Requirements?

The Centers for Medicare & Medicaid Services (CMS) recently added to the trend toward greater health care data transparency by releasing data about the prescription drugs that physicians and other health care providers prescribed in 2013 under the Medicare Part D Prescription Drug Program.  CMS’s press release touted the data as “part of the Obama Administration’s efforts to make our healthcare system more transparent, affordable, and accountable.” Following the Physician Payments Sunshine Act, which makes public the financial arrangements that pharmaceutical and medical device manufacturers have with physicians and teaching hospitals through the “Open Payments” program, and the release of 2012 physician Medicare Part B fee-for-service data, which my colleagues discussed in a previous post, the 2013 Part D data adds to the growing universe of publicly available information about the health care system. Continue Reading Medicare Part D Data Release Continues Transparency Trend

Bloomberg BNA recently published a Health Care Fraud Report entitled Outlook 2015: Uptick Expected in Stark, Anti-Kickback FCA Cases, Self-Disclosures, which examines the top issues for health care providers and suppliers to watch in 2015.  

My colleagues Tom Crane and Larry Freedman were quoted extensively in the article, and they discussed a broad range of health care fraud and abuse issues to watch, including the:

  • Continuing growth of provider self-disclosures to the Centers for Medicare & Medicaid Services (“CMS”) and the Office of Inspector General (“OIG”);
  • Possible collateral uses by relators of the information about financial relationships between drug and device manufacturers and physicians and teaching hospitals disclosed as part of CMS’s Open Payments program (i.e., the “Sunshine Act”);
  • Proposed new safe harbors to the Anti-kickback Statute and the so-called “gainsharing” Civil Monetary Penalties Law;
  • Use of statistical sampling as evidence of a wider scope of false claims to prove liability in litigation under the False Claims Act (“FCA”);
  • Increasing focus by the Department of Justice and relators on FCA claims based upon physician compensation arrangements with hospitals, including potential Stark Law violations;
  • Continuing questions about the viability of a “worthless services” theory of liability under the FCA; and
  • Recovery Audit Contractor program changes.

Written By: Kimberly Gold and Karen Lovitch

GlaxoSmithKline (“GSK” or the “Company”) announced yesterday that it will stop paying health care professionals to promote its drug products and will no longer tie the compensation of its worldwide sales force to individual sales targets. In addition, GSK will extend its long-standing prohibition on providing direct financial support to health care professionals attending conferences in the United States to other countries.

Implementation of the new “patient-focused approach” to sales compensation will begin in 2014, and the new system will be in place in all countries in which GSK operates by early 2015. Rather than set individual sales targets, the Company will reward employees for their technical knowledge, quality of service, and overall performance. The company successfully introduced this concept in the United States in 2011, and it now intends to extend the changes to its worldwide business. The New York Times reported on Monday that GSK is among the first of major drug companies to make such changes to its compensation system, but that other drug companies are expected to follow suit. Continue Reading GlaxoSmithKline Announces Further Limits on Payments to Physicians and on Sales Compensation