CMS lets the light in on $6.49B in 2014 Open Payments

CMS published 2014 financial transaction data through the Open Payment system created by the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). The 2014 data covers 11.4 million financial transactions involving over 600,000 physicians and over 1,000 teaching hospitals. The value of the transactions included in the released data totals $6.49 billion.

ACA

The ACA mandated Open Payments system requires drug and device manufacturers to report transfers of value to health care providers. Transfers of value include research grants, direct payments to providers, and industry investments held by providers. The system is monitored in part by voluntary provider review of the payment information submitted by manufacturers. For example, CMS indicated in a press release on the data availability that physicians and teaching hospitals reviewed almost 30 percent of the reported data for 2014.

Data reliability

According to acting CMS Administrator Andy Slavitt, in its second year, the Open payments system is now a “highly searchable resource to provide transparency to over 1 1/2 years’ worth of financial transactions between drug and device companies and physicians and teaching hospitals.” For the 2014 and 2013 data, CMS was able to validate 98.8 percent of all records submitted. Records that could not be verified to correspond with an associated covered recipient were not included in the system.

Payments

Of the $6.49 billion in payment data released, $2.56 billion corresponded to general physician payments, $3.23 billion was paid for research purposes, and $703 million represented physician investment interests. Of the 11.41 million payments made, 10.82 million were general payments, 585,000 were made for research purposes, and 4,785 corresponded to ownership or investment interests. In total, 1,444 different companies were responsible for the $6.49 billion in physician and teaching hospital payments.

The CMS Open Payments website has a search tool and download mechanism to allow consumers to conduct specific searches of the newly reported data.

Kusserow on Compliance: OIG work planning driven by CMS program mandates

The HHS Office of Inspector General (OIG) Mid-Year Update to the OIG Work Plan for fiscal year (FY) 2015 described ongoing OIG audits, evaluations, and certain legal and investigative initiatives, as well as removed items that have been completed, postponed, or canceled. The report explained that the OIG work planning is a dynamic process and adjustments are made throughout the year to meet priorities and to anticipate and respond to emerging issues within the constraints of available resources. Priorities are set as a result of assessing relative risks confronting the more than 100 HHS programs and in identifying areas most in need of attention. The agency then allocates its available resources accordingly. A number of factors are considered in generating specific task work for any given period including:

  • Legal, regulatory, and other mandates;
  • Requests by Congress, HHS management, or the Office of Management and Budget;
  • Top management and performance challenges facing HHS;
  • Work generated by partner organizations;
  • Management’s actions in response to recommendations from previous reviews; and
  • Timeliness of issues.

It should be noted however that the entire process is distorted by funding requirements, which direct more than three quarters of their resources be devoted to the Medicare and Medicaid program. As such, the OIG Work Plan devotes most of its resources to reducing Medicare Parts A and B and ensuring quality, including quality in nursing home, hospice care, and home- and community-based care. As a result, the overarching OIG planning efforts reflected in the current fiscal year and beyond involve the following:

Quality of care: Planned work will examine settings in which the OIG has identified gaps in program safeguards intended to ensure medical necessity, patient safety, and quality of care. It will also continue its focus on access to care, including beneficiary access to durable medical equipment prosthetics, orthotics, and supplies (DMEPOS) in the context of new programs involving competitive bidding.

Appropriate payments: Planning is ongoing to expand OIG’s portfolio examining inefficient payment policies or practices, including comparison among government programs to identify instances when Medicare paid significantly different amounts for the same or similar services or when less efficient payment methodologies were used. Planning is ongoing for work addressing Medicare costs incurred because of deficiencies in services or defective medical devices, as well as noncompliance or other vulnerabilities in care settings with high payment error rates.

Oversight of payment and delivery reform: Planning is underway to expand OIG’s work addressing changes to Medicare programs designed to improve efficiency and quality of care and to promote program integrity and transparency. OIG will consider work examining the transition from volume- to value-based payments and the soundness and effectiveness of the payment structures, care coordination, and administration of these new payment models. Work expected to begin in 2015 and beyond includes examinations of data and metrics to document and measure quality and performance.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

Connect with Richard Kusserow on Google+ or LinkedIn.

Subscribe to the Kusserow on Compliance Newsletter

Copyright © 2015 Strategic Management Services, LLC. Published with permission.

Michigan hospitals conspired to hide information from consumers

Four hospital systems in south-central Michigan had an unlawful marketing territory agreement that deprived consumers and physicians of important information about competing providers for years, according to the Department of Justice (DOJ), which filed a lawsuit against the hospital systems in the Eastern District of Michigan. “These hospitals conspired to deprive consumers and physicians of important health information and education,” said Assistant Attorney General Bill Baer of the DOJ’s Antitrust Division. “Instead of putting patients first, these hospitals secretly agreed not to compete.”

Unlawful agreement

Hospitals compete to attract patients by advertising, including the use of direct mailings to patients, outreach to physicians and employers, conducting health fairs, and offering free health screenings. According to the DOJ’s complaint, four hospitals—each the only hospital in its respective county—entered into agreements to limit the marketing of competing health care services. As a result, patients and physicians were deprived of information needed to make informed health care decisions, and some were prevented from receiving free medical services like health screenings and physician seminars that, in the absence of the unlawful agreements, they would have received.

The hospitals sued by the DOJ are:

  • Hillsdale Community Health Center (Hillsdale)—a Michigan corporation headquartered in Hillsdale, Michigan, with a general acute care hospital located in Hillsdale County, Michigan. Hillsdale has 47 beds and a medical staff of over 90 physicians.
  • Community Health Center of Branch County, Michigan (Branch)—a Michigan corporation headquartered in Coldwater, Michigan, with a general acute care hospital located in Branch County, Michigan. Branch has 87 beds and a medical staff of over 100 physicians.
  • ProMedica Health System Inc. (ProMedica)—an Ohio corporation headquartered in Toledo, Ohio, with locations in northwest Ohio and southern Michigan, including Bixby and Herrick Hospitals in Lenawee County, Michigan. Bixby is a general acute care hospital with 88 beds and a medical staff of over 120 physicians. Herrick is a general acute care hospital with 25 beds and a medical staff of over 75 physicians.
  • A. Foote Memorial Hospital, doing business as Allegiance Health (Allegiance)—a Michigan corporation headquartered in Jackson, Michigan, with a general acute care hospital located in Jackson County, Michigan. Allegiance has 480 beds and a medical staff of over 400 physicians.

The complaint alleges that Hillsdale curtailed competition for years by entering into agreements with Allegiance, Branch, and ProMedica to limit the marketing of competing health care services.

Settlement

Three of the hospital systems—Hillsdale, Branch, and ProMedica—agreed to settle the charges, while the DOJ will continue to litigate against Allegiance. The proposed settlement would prohibit the three systems from entering into agreements with other health care providers, including hospitals and physicians, to limit marketing or to divide any geographic market or territory. It also prohibits communications among the hospital systems about their marketing activities and requires them to implement compliance measures tailored to prevent the recurrence of these types of anticompetitive practices in the future.

The proposed settlement will be published in the Federal Register. Written comments may be submitted within 60 days of its publication.

Kusserow on Compliance: OIG Advisory Opinion: proposed use of preferred hospital network in connection with Medigap plan

The HHS Office of Inspector General (OIG) issued a new Advisory Opinion regarding the proposed use of a preferred hospital network in connection with a Medicare Supplemental Health Insurance (Medigap) plan. The Requestor, “a licensed offeror of Medigap policies and other insurance products,” asked for an Advisory Opinion regarding the use of a preferred hospital network as part of Medigap policies, whereby it would indirectly contract with hospitals for discounts on the otherwise-applicable Medicare inpatient deductibles for its policyholders and, in turn, would provide a premium credit of $100 off the next renewal premium to policyholders who use a network hospital for an inpatient stay (the “Proposed Arrangement”).

Under the Proposed Arrangement, if a policyholder is admitted to a hospital other than a network hospital, the Requestor would pay the full Part A hospital deductible, as provided under the applicable Medigap plan. Savings realized by the Requestor under the Proposed Arrangement would be reflected in the Requestor’s annual experience exhibits (which reflect loss ratios) filed with the various state insurance departments that regulate the premium rates charged by Medigap insurers. Thus, the savings realized from the Proposed Arrangement would be taken into account when state insurance departments review and approve the rates.

Based on the totality of the facts and circumstances, and given the sufficiently low risk of fraud or abuse and the potential for savings for beneficiaries, the OIG stated it would not impose administrative sanctions on the Requestor under the Anti-Kickback Statute (AKS) or the prohibition on inducements to beneficiaries in connection with the Proposed Arrangement for the following reasons:

  • Neither the discounts nor the premium credits would increase or affect per-service Medicare payments. With the exception of certain pass-through payments and outlier payments, Part A payments for inpatient services are fixed; they are unaffected by beneficiary cost-sharing.
  • The Proposed Arrangement would be unlikely to increase utilization. In particular, the discounts effectively would be invisible to policyholders, because they would apply only to the portion of the individual’s cost-sharing obligations that the individual’s supplemental insurance otherwise would cover. In addition, the OIG has long held that the waiver of fees for inpatient services is unlikely to result in significant increases in utilization.
  • The Proposed Arrangement should not unfairly affect competition among hospitals, because membership in the contracting preferred hospital organization’s (PHO’s) hospital network would be open to any accredited, Medicare-certified hospital that meets the requirements of applicable state laws.
  • The Proposed Arrangement would be unlikely to affect professional medical judgment, because the policyholders’ physicians and surgeons would receive no remuneration, and the policyholder would remain free to go to any hospital without incurring any additional out-of-pocket expense.
  • The Proposed Arrangement would operate transparently in that the Requestor certified that it would make clear to policyholders that they have the freedom to choose any hospital without incurring additional liability or a penalty.

 

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

Connect with Richard Kusserow on Google+ or LinkedIn.

Subscribe to the Kusserow on Compliance Newsletter

Copyright © 2015 Strategic Management Services, LLC. Published with permission.