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Learn About “Open Payments”

The Open Payments dataset annually issued by the Centers for Medicare & Medicaid Services (CMS) provides an unparalleled source of relationships between the life science industry and healthcare providers. While motivated by the desire to improve public transparency, the use of Open Payments goes beyond transparency and can be a source of exceptional business intelligence and market insight.

Healthcare Transparency

The life science industry has been mandated to pay billions of dollars in settlements with the United States Department of Justice (DOJ) based on false-claims, off-label promotion, kickbacks and other inappropriate interactions.  Furthermore, industry organizations like the American College of Physicians have expressed concerns over the “introduction of bias” when physicians meet with, collaborate in and or develop and invest with life science companies.  As a result, there has been a growing demand for transparency which has manifested in many ways including  clinicaltrials.gov, the public disclosure of Medicare payments and the congressionally mandated Physician Payments Sunshine Act (PPSA). 

“Physician Payments Sunshine Act”

The PPSA, as codified in section 6002 of the Affordable Care Act (ACA) of 2010, demanded transparency from life science companies (e.g., medical product manufacturers), specified service providers (e.g., group purchasing organizations, medical suppliers) and certain United States healthcare providers that these companies interact with (e.g., physicians, teaching hospitals).  The ACA strove to balance this demand for transparency against the need to encourage the development of “beneficial arrangements” by requiring the disclosure of specific financial relationships:

  • General Payments: Payments or other transfers of value not made in connection with a research agreement or research protocol.
  • Research Payments: Payments or other transfers of value made in connection with a research agreement or research protocol.
  • Physician Ownership Information: Information about physicians who have an ownership or investment interest in an applicable manufacturer or applicable GPO.

“Open Payments” Database

Since its inception, significant investment has been made in the reporting and attestation requirements demanded by PPSA, and CMS has made this data publically available via the “Open Payments” website.  However, there has been considerable debate over the cost and public utility of this available Open Payments data.  Considering their mandated investment, industry participants can take this opportunity to leverage these data as a source of novel business intelligence and market insight.

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