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HEALTH CARE COMPLIANCE ASSOCIATION

EAST CENTRAL REGIONAL ANNUAL CONFERENCE

STARK, SUNSHINE, AND PHYSICIAN COMPLIANCE ISSUES

Michael A. Cassidy, Esquire

Tucker Arensberg, P.C.

1500 One PPG Place

Pittsburgh, PA 15222

Phone: 412-594-5515

Fax: 412-594-5619

Email: mcassidy@

HEALTH CARE COMPLIANCE ASSOCIATION

EAST CENTRAL REGIONAL ANNUAL CONFERENCE

STARK, SUNSHINE, AND PHYSICIAN COMPLIANCE ISSUES

Michael A. Cassidy, Esquire

Tucker Arensberg, P.C.

1500 One PPG Place

Pittsburgh, PA 15222

Phone: 412-594-5515

Fax: 412-594-5619

Email: mcassidy@

I. Introduction

A. Recent Enforcement Activity

B. Physician Contracting

1. Us ex rel Drakeford v. Toumey d/b/a Toumey Healthcare System

2. USA and Elin Baklid-Kunz v. Halifax Hospital Medical Center

C. Physician Payment Sunshine Act

II. Renewed Laboratory Enforcement

A. Enforcement Actions

1. Pennsylvania Laboratory

2. Health Diagnostic Laboratory, Inc. - HDL was paying a $20 per sample processing fee to physicians who referred tests. Stopped after June 2014 Special Fraud Alert.

a. Also ran new tests on 100% of refrigerated.

b. Individuals quoted in WSJ 9/8/14.

c. Whistleblower claim?

B. Federal Enforcement

1. Special Fraud Alert: Laboratory Payments to Referring Physicians

2. Specimen Processing Arrangements - The OIG states that characteristics of a questionable specimen processing arrangement may be evidence of unlawful purpose include but are not limited to the following:

a. Payment exceeds fair market value for services actually rendered by the party receiving the payment.

b. Payment is for services for which payment is also made by a third party, such as Medicare.

c. Payment is made directly to the ordering physician rather than to the ordering physician’s group practice, which may bear the cost of collecting and processing the specimen.

d. Payment is made on a per-specimen basis for more than one specimen collected during a single patient encounter or on a per-test, per-patient, or other basis that takes into account the volume or value of referrals.

e. Payment is offered on the condition that the physician order either a specified volume or type of tests or test panel, especially if the panel includes duplicative tests (e.g., two or more tests performed using different methodologies that are intended to provide the same clinical information), or tests that otherwise are not reasonable and necessary or reimbursable.

f. Payment is made to the physician or the physician’s group practice, despite the fact that the specimen processing is actually being performed by a phlebotomist placed in the physician’s office by the laboratory or a third party.

3. Registry Payments - The OIG has become of arrangements under which clinical laboratories are establishing, coordinating or maintaining databases and paying physicians to collect this information under the alleged guise of research and categorizing these payments as “registry arrangements”.

Characteristics of the registry agreement may be evidence of such unlawful purpose include, but are not limited to the following:

a. The laboratory requires, encourages, or recommends that physicians who enter into Registry Arrangements perform the tests with a stated frequency (e.g., four times per year) to be eligible to receive, or to not receive a reduction in, compensation.

b. The laboratory collects comparative data for the Registry from, and bills for, multiple tests that may be duplicative (e.g., two or more tests performed using different methodologies that are intended to provide the same clinical information) or that otherwise are not reasonable and necessary.

c. Compensation paid to physicians pursuant to Registry Arrangements is no a per-patient or other basis that takes into account the value or volume of referrals.

d. Compensation paid to physicians pursuant to Registry Arrangements is not fair market value for the physicians’ efforts in collecting and reporting patient data.

e. Compensation paid to the physicians pursuant to Registry Arrangements is not supported by documentation, submitted by the physicians in a timely manner, memorializing the physicians’ efforts.

f. The laboratory offers Registry Arrangements only for tests (or disease states associated with tests) for which is has obtained patents or that it exclusively performs.

g. When a test is performed by multiple laboratories, the laboratory collects data only from the tests it performs.

h. The tests associated with the Registry Arrangement are presented on the offering laboratory’s requisition in a manner that makes it more difficult for the ordering physician to make an independent medical necessity decision with regard to each test for which the laboratory will bill (e.g., disease-related panels).

C. Pennsylvania Enforcement: Act 122 enacted December 18, 2013.

1. Pennsylvania enacted amendments to the Pennsylvania Clinical Laboratory Act on December 18, 2013 (the amendments are referred to as Act 122) and the Department of Health and Bureau of Laboratories just issued additional guidance on May 28, 2014 in the form of a Letter and Frequently Asked Questions.

2. Under Act 122 it is generally unlawful for clinical laboratories to:

a. Pay or receive a commission, bonus, kickback or rebate or engage in a split-fee arrangement in any form with a health care provider/practitioner.

b. Lease or rent space, shelves or equipment or other services within a health care provider’s/practitioner’s office. This includes leasing or renting space for the purpose of establishing a specimen collection station.

c. Directly or indirectly provide personnel to perform functions or duties within a health care provider’s/practitioner’s office for any purpose regardless of whether fair market value is offered or given.

d. Permit the placement of paid or unpaid personnel to perform services (e.g., specimen collection, processing, packaging or handling or genetic counseling) in a health care provider’s/practitioner’s office.

3. Exceptions - Act 122 also contains three enumerated exceptions to these prohibitions:

a. A health care provider/practitioner that owns and operates its own clinical laboratory may place its employees in the clinical laboratory.

b. A clinical laboratory licensed by the Department can refer specimens to another clinical laboratory licensed by the Department or to a CLIA-accredited or certified clinical laboratory.

c. Clinical laboratories are allowed to own or invest in a building in which space is leased or rented for adequate and fair consideration to health care providers/practitioners.

III. USA and Elin Baklid-Kunz v. Halifax Hospital Medical Center

A. Summary

1. Initial complaint filed by Realtor under seal June 19, 2009

a. Elin Baklin-Kunz - Physician Services Director

2. DOJ intervened October 14, 2011

3. CIA and $85 million Settlement March 10, 2014

B. Non Intervention Claims

1. Medically unnecessary short stay - Summary Judgment for hospital denied January 8, 2014 because evidence at least establishes a genuine issue of material fact.

2. Anti-Kickback claims for failure to meet bona fide employment exception because physicians employed by “staffing arm” rather than “hospital”.

a. Instrumentality

3. Psychiatrist employment - Summary Judgment denied because compensation arrangement varied with volume of referrals and thus failed to meet Stark Law exception.

4. Statute of Limitations - July 1, 2014. Medically unnecessary admissions and offset impatient billing against theoretically permissible outpatient billing for medically necessary services.

C. Intervention Claims

1. Medical Oncologists

a. Summary Judgment granted to Relator

b. Corporate Integrity Agreement

c. $85 million

i. 8 x annual operating margin

ii. 18% annual revenue

2. Neurologists

a. Summary Judgment denied on November 18, 2013

b. Statute of Limitations defense rejected July 1, 2014

c. Case proceeding to trial at this point

D. Medical Oncologists

1. Six medical oncologists employed by Hospital to treat inpatients and outpatients.

2. Billing prior to March 1, 2007 had separate inpatient and outpatient claims. Billing forms identified:

a. Overall responsibility - “attending”

b. Performing - “operating”

3. Contract term in question - Beginning with the fiscal year ending September 30, 2005, an equitable portion of an Incentive Compensation pool which is equal to 15% of the operating margin for the Medical Oncology program as defined by the financial statements produced by the Finance Department on a quarterly basis. The amount of the incentive compensation distributed to the Employee shall be determined by the Medical Oncology Practice Management Group. This compensation shall be paid annually according to the operating margin for the fiscal year. Payment will be made on or before March 15 of the following year in order to provide a 90-day period of collection. The Company shall make best efforts to achieve a reasonable collection rate in light of community needs, patient mix, and relevant health care reform efforts.

4. Incentive pool share based upon individual relative productivity.

5. The Stark Law sets forth several exceptions to its broad prohibition on compensation arrangements between heath care entities and referring physicians. To avoid the referral and billing prohibitions in the statute, a hospital’s financial relationship with a physician must fall into one of the exceptions. One such exception involves what the Stark Law describes as “bona fide employment relationships”. Under the exception, amounts paid by an employer to a physician will not be considered a compensation arrangement for purposes of the Stark Law if:

a. The employment is for identifiable services;

b. The amount of remuneration under the employment -

i. Is consistent with the fair market value of the services, and

ii. Is not determined in a manner that takes into account (directly or indirectly) the volume or value of any referrals by the referring physician,

c. The remuneration is provided pursuant to an agreement which would be commercial reasonable event if no referrals were made to the employer; and

d. The employment meets such other requirements as the Secretary may impose by regulation as needed to protect against program or patient abuse.

6. The Government contends that the requirements of this exception were not satisfied because the Incentive Bonus, and therefore the Medical Oncologists’ remuneration, varied based on referrals for designated health services. More particularly, the Government points out that the pool from which the Incentive Bonus was drawn was equal to 15% of the operating margin of the Medical Oncology program, and the program’s revenue included fees for designated health services such as outpatient prescription drugs and outpatient services not personally performed by the Medical Oncologists. Thus, revenue from referrals made by the Medical Oncologists would flow into the Incentive Bonus pool, and additional referrals would be expected to increase the size of the pool. All other things being equal, this would, in turn, increase the size of the Incentive Bonus received by the referring Medical Oncologist.

7. Halifax points out that the requirement in the bona fide employment exception that the remuneration not be “determined in a manner that takes into account (directly or indirectly) the volume or value of any referrals by the referring physician,” 42 U.S.C. §1395nn(e)(2)(B)(ii), is itself subject to an exception. The final sentence of 42 U.S.C. § 1395(e)(2) provides that “[s]ubparagraph (B)(ii) shall not prohibit the payment of remuneration in the form of a productivity bonus based on services performed personally by the physician (or an immediate family member of such physician)”. The Incentive Bonus, the Defendants argue, was just such a bonus, because “it is undisputed the bonus pool was divided up based on [each] oncologist’s personally performed services.” (Doc. 317 at 11) (emphasis in original).

8. In the Summary Judgment Opinion, the Court stated this is not enough to bring the Incentive Bonus within the bona fide employment exception. The Incentive Bonus was not a “bonus based on services personally performed” by the Medical Oncologists, as the exception requires. 42 U.S.C. § 1395(d)(2). Rather, as described by the Defendants themselves, this was a bonus that was divided up based on services personally performed or referred by the Medical Oncologists. The bonus itself was based on factors in addition to personally performed services - including revenue from referrals made by the Medical Oncologists for DHS. The fact that each oncologist could increase his or her share of the bonus pool by personally performing more services cannot alter the fact that the size of the pool (and thus the size of each oncologist’s bonus) could be increased by making more referrals.

E. Fair Market Value Opinions

1. Myers and Stauffer LLC/ Kathy McNamara retained by United States to opine on neurosurgeons compensation.

2. Compensation not commercially reasonable (page 27)

a. Favorably treated relative to other physicians on staff

i. Car allowances

ii. Highest paid

iii. Only physicians exceeding 90th percentile

iv. Additional subsidies

b. Received 100% of collections

c. Hospital incurred significant expenses

d. Compensation for all call coverage

IV. US ex rel Drakeford v. Toumey d/b/a Toumey Healthcare System, Inc.

A. Decision - Financial arrangement violated the Stark Act and claims submitted by Hospital therefore violated False Claims Act.

1. Allows fines ($5,500 - $11,000) plus treble damages

2. Jury awarded $39,313,065.00

B. Key Facts:

1. Private practice gastroenterologists took steps to establish ASC

2. Hospital calculated loss of $9.6 million over 13 years

3. Hospital employed physicians on a part time basis at an amount equal to 31% greater than total collections.

C. Key Holdings:

1. Evidence was sufficient to support finding that physicians’ compensation varied with volume and value of physicians’ referrals to provider;

2. Evidence was sufficient to support finding that provider took into account the volume or value of referrals in calculating compensation plans in physicians’ contracts;

3. Evidence was sufficient to support finding that provider’s Medicare and Medicaid claims were submitted in violation of FCA, even though provider asserted that the forms did not identify a “referring physician”;

4. Evidence was sufficient to support finding that provider knowingly submitted false Medicare and Medicaid claims, for purposes of scienter under the Stark Law;

5. Provider was not entitled to new trial on damages; and

6. Trebling of United States’ jury verdict and civil penalties did not violate Eighth Amendment.

D. Key Issues:

1. Valuation - Appraiser testified that, although she had calculated net present value of surgical volume, the appraisal was not used to determine compensation.

a. A reasonable jury could have found that the volume was taken into account.

2. Definition of Referral - “Attending” vs. “other” physician

3. Advice of Counsel

a. Initial counsel

b. Replacement counsel

c. Waiver of Attorney-Client privilege: Barker ex rel U.S. v. Columbus Regional Healthcare System

E. Legal Issues: No Damages

The provider argued there was no damage to the government because all of the claims and services were medically necessary, properly documented and properly coded. The Court rejected this argument and found that a claim submitted following a referral based on a compensation arrangement that violates Stark is itself illegal, even though the government received exactly what it paid for - medically necessary and properly coded services.

F. Calculation of Damages

The $237 million verdict was calculated as follows: $39 million worth of improper claims that were based on referrals that did not comply with Stark; plus triple damages on top of the jury verdict equaling almost $118 million ($39,313,065 x 3); plus a $5,500 sanction amounting to almost another $210 million ($5,500 penalty x 21,730 improper claims submitted). Notably, the Court held that the triple damages and $5,500 per claim sanction under the FCA were neither punitive nor excessive under the circumstances. As a practical matter, this means that a deal that was extensively reviewed by legal counsel (see below) and which the government paid for medically necessary services and procedures, results in the providers having to pay the government $237 million.

G. Advice of Counsel Defense

The providers argued that they did not have any improper intent to violate the FCA because they obtained and followed advice of experienced health law counsel. The provider (who ultimately became the whistleblower) insisted that they seek yet another opinion from an attorney in private practice who was formerly the OIG’s attorney, who identified risks and concerns with the deal. The Court rejected the provider’s advice of counsel defense.

V. Physician Payment Sunshine Act Compliance Obligations

A. Introduction

1. Statute - Physician Payment Sunshine Act Final Rule implements §6002 of the Affordable Care Act, which added §1128G of the Social Security Act [42 USC § 1320a-7(h)]

2. Regulations - Final Rule published Federal Register on February 8, 2013 (Vol. 78, No. 27, pp. 9458-9528). 42 CFR Parts 402 and 403.

B. General Summary

1. Open payments creates greater transparency around the financial relationships of manufacturers, physicians, and teaching hospitals. The program requires that the following information is reported annually to CMS:

a. Applicable manufacturers of covered drugs, devices, biological, and medical supplies to report payments or other transfers of value they make to physicians and teaching hospitals to CMS.

b. Applicable manufacturers and applicable group purchasing organizations (GPOs) to report to CMS certain ownership or investment interests held by physicians or their immediate family members.

c. Applicable GPOs to report to CMS payments or other transfers of value made to physician owners or investors if they held ownership or an investment interest at any point during the reporting year.

2. HHS Publication - HHS required to publish reports on public website.

C. Purpose of the Sunshine Act

1. Stated Purposes

a. Improve transparency regarding financial relationships between healthcare industry, manufacturers, physicians and teaching hospitals.

b. Reduce the potential for conflicts of interest among industry, physicians and teaching hospitals.

c. Foster transparency and improved decision making by healthcare consumers.

D. Significant Definitions

1. Covered Recipients

a. Any physician except a physician employee of an applicable manufacturer:

i. Physicians:

• Medicine

• Osteopathy

• Dentist

• Dental Surgeon

• Podiatrist

• Optometrist

• Chiropractor

ii. Excludes Residents

• Fellows?

2. Teaching Hospital

a. Definition: For the purposes of this program, teaching hospitals are defined as hospitals that received a payment(s) under a Medicare direct graduate medical education (GME), inpatient hospital prospective payment system (IPPS) indirect medical education (IME), or psychiatric hospital IME programs during the most recent calendar year for which such information is available.

b. Teaching Hospital List

i. CMS has published a downloadable list (in .csv format, Microsoft Excel format and Adobe .pdf format) of all teaching hospitals subject to reporting for the 2013 reporting year. The teaching hospital list contains all hospitals that CMS has recorded as receiving a payment(s) under a Medicare direct GME, IPPS IME, or Psychiatric hospital IME programs during the latest full fiscal year for which such information is available to CMS.

ii. The list is an important resource to assist applicable manufacturers when determining if they are required to report payments or other transfers of value made to a hospital. The list will include the hospital’s name, address and taxpayer identification number. The list will be valid for the applicable reporting period.

iii. The teaching hospital list for future reporting years will be released for applicable manufacturers by October 1 of each year.

3. Applicable Manufacturer

a. Engaged in the production, preparation, propagation, compounding, or conversion of a covered drug, device, biological, or medical supply for sale or distribution in the United States, or in a territory, possession, or commonwealth of the United States; or

b. Under common ownership with an entity in paragraph (1) of this definition, which provides assistance or support to such entity with respect to the production, preparation, propagation, compounding, conversion, marketing, promotions, sale, or distribution of a covered drug, device, biological, or medical supply for sale and distribution in the United States, or in a territory, possession, or commonwealth of the United States.

4. Applicable Group Purchasing Organization (GPO)

a. Operate in the United States (meaning that they have a physical location within the U.S. or otherwise conduct activities in the U.S., either directly or through a legally-authorized agent); and

b. Purchase, arrange for purchase, or negotiate the purchase of a covered drug, device, biological, or medical supply for a group of individuals or organizations that is not solely for use by the purchasing entity itself.

5. Covered Product: A Covered Product is any drug, device, biological, or medical supply that is eligible for payment by Medicare, Medicaid, or CHIP either individually or as a part of a bundled payment (such as the inpatient prospective payment system), and requires a prescription to be dispensed (for drugs and biological) or required premarket approval by or premarket notification of the U.S. Food and Drug Administration (FDA) (for devices, including medical supplies that are devices).

E. Reportable Payments

1. General Rule - Payments or other transfers of value provided to any covered recipient, including payments to another individual or entity at the request of (or designated on behalf of) a covered recipient, by an applicable manufacturer or a third party (on behalf of an applicable manufacturer) must be reported to CMS by the applicable manufacturer on an annual basis.

2. Required Information - A report must contain all of the following information for each payment or other transfer of value:

a. Name of the covered recipient. If the payment of other transfer of value was provided to another individual or entity at the request of (or designated on behalf of) any covered recipient, the payment or transfer of value must be disclosed in the name of that covered recipient.

b. Business address of the covered recipient, including street address, suite or office number (if applicable), city, state and ZIP code.

c. In the case of a covered recipient who is a physician, the specialty and National Provider Identification (if applicable) of the covered recipient.

d. Amount of each payment or other transfer of value to the covered recipient.

e. Date of each payment or transfer of value to the covered recipient.

f. Form of each payment or other transfer of value.

g. Nature of each payment or other transfer of value.

h. If a payment or other transfer of value is related to marketing, education, or research specific to a covered drug, device, biological, or medical supply, the name under which the covered drug, device, biological, or medical supply is marketed. If the marketed name has not yet been selected, applicable manufacturer must indicate the scientific name. Applicable manufacturers may only report a single covered drug, device, biological or medical supply for each payment or other transfer of value.

i. The applicable manufacturer must indicate that a payment or other transfer of value is subject to delayed publication, if the payment or other transfer of value is made under any of the following arrangements:

i. In accordance with a product research or development agreement for services furnished in connection with research on or development of a new drug, device, biological, or medical supply or a new application of an existing drug, device, biological or medical supply.

ii. In connection with a clinical investigation regarding a new drug, device, biological or medical supply.

j. If the payment or other transfer of value is made to an entity or individual at the request of (or designated on behalf of) a covered recipient, the name of the other individual or entity that receives the payment or other transfer of value.

k. Whether the payment or other transfer of value was provided to a physician who holds an ownership or investment interest (as defined §403.902) in the applicable manufacturer.

3. Form of Payment - An applicable manufacturer must report each payment or transfer of value, or separable part of that payment or transfer of value, as taking one of the following forms, using the designation that best describes the form of the payment or other transfer of value, or separable part of that payment or other transfer of value. Each of the following terms has its dictionary definition:

a. Cash or cash equivalent.

b. In-kind items or services.

c. Stock, a stock option, or any other ownership interest, dividend, profit, or other return on investment.

4. Categorization of Payments - Reports will be required to categorize all reportable payments as falling within one of the following natures of payment:

a. Consulting fees

b. Compensation for services other than consulting, including serving as faculty or as a speaker at an event other than a continuing education program

c. Honoraria

d. Gifts

e. Entertainment

f. Food and beverage

g. Travel and lodging

h. Education

i. Research

j. Charitable contributions

k. Royalty or license

l. Current or prospective ownership or investment interest

m. Compensation for serving as faculty or as a speaker for an unaccredited and non-certified continuing education program

n. Compensation for serving as faculty or as a speaker for an accredited or certified continuing education program

o. Grants

p. Space rental or facility fees (teaching hospital only)

Generally, applicable manufacturers are required to report all payments, whether they are related to a covered drug, device, biological, or medical supply, or not. However, there are some exceptions. For example, applicable manufacturers that had less than 10 percent gross revenue during the fiscal year preceding the reporting year form covered products are only required to report payments or other transfers of value to covered products, not all products. In addition, certain products are excluded from the reporting requirements.

5. Exclusions from Reporting

a. $10 CY2012 individual minimum and $100 CY2012 aggregate minimum tied to CPI

b. Product samples not intended for sale and intended for patient us.

c. Educational materials that directly benefit patients or are intended for patient use.

d. Loans of covered devices not to exceed 90 days to permit evaluation

e. Warranty replacements

f. When covered recipient is a patient

g. Discounts and rebates

h. Charity care

i. Dividends or ownerships distributions from publicly traded securities or mutual funds

j. Payments from self-insured health funds

k. Payments to recipients for non-medical licensed purposes

l. Payments for services with respect to criminal or civil proceedings

m. Incidental items and snacks at large scale conferences

n. Speaker compensation at accredited programs

F. Enforcement

1. Failure to report

a. Any applicable manufacturer or applicable group purchasing organization that fails to accurately and completely submit the information required in accordance with the rules established under this subpart in a timely manner is subject to a civil monetary penalty of not less than $1,000 but not more than $10,000 for each payment or other transfer of value or ownership or investment interest not reported.

b. The total amount of civil monetary penalties imposed on an applicable manufacturer or applicable group purchasing organization under this subpart with respect to each annual submission of information will not exceed $150,000.

2. Knowing failure to report

a. Any applicable manufacturer or applicable group purchasing organization that knowingly fails to accurately and completely submit the information required in accordance with the rules established under this subpart in a timely manner is subject to a civil monetary penalty of not less than $10,000, but not more than $100,000, for each payment or other transfer of value or ownership or investment interest not reported.

b. The total amount of civil monetary penalties imposed on an applicable manufacturer or group purchasing organization for knowing failure to report under this subpart with respect to each annual submission of information will not exceed $1,000,000.

3. Determinations regarding the amount of civil monetary penalties

a. In determining the amount of the civil monetary penalty, factors to be considered include, but are not limited to, the following:

b. The length of time the applicable manufacturer or applicable group purchasing organization failed to report, including the length of time the applicable manufacturer and applicable GPO knew of the payment or other transfer of value, or ownership or investment interest.

c. Amount of the payment the applicable manufacturer or applicable group purchasing organization failed to report.

d. Level of culpability.

e. Nature and amount of information reported in error.

f. Degree of diligence exercised in correcting information reported in error.

4. Record retention and audits

a. Maintenance of records

i. Applicable manufacturers and applicable group purchasing organizations must maintain all books, contracts, records, documents, and other evidence sufficient to enable the audit, evaluation, and inspection of the applicable manufacturer’s or applicable group purchasing organization’s compliance with the requirement to accurately and completely submit information in a timely manner in accordance with the rules established under this subpart.

ii. The items described in this section must be maintained for a period of at least 5 years from the date the payment or other transfer of value, or ownership or investment interest is published publicly on the website.

b. Audit - HHS, CMS, OIG or their designees may audit, inspect, and evaluate any books, contracts, records, documents, and other evidence of applicable manufacturers and applicable group purchasing organizations that pertain to their compliance with the requirement to accurately and completely submit information in a timely manner in accordance with the rules established under the subpart.

c. The records retention and audit requirements in this subpart are in addition to, and do not limit, any other applicable requirements that may obligate applicable manufacturers or applicable group purchasing organizations to retain and allow access to records.

G. Preemption of State Laws

1. General Rule - In the case of a payment or other transfer of value provided by an applicable manufacturer to a covered recipient, this subpart preempts any statute or regulation of a State or political subdivision of a State that requires an applicable manufacturer to disclose or report, in any format, the type of information regarding the payment or other transfer of value required to be reported under this subpart.

2. Information Collected for Public Health Purposes

a. Information required to be reported to a Federal, State, or local governmental agency for public health surveillance, investigation, or other public health purposes or health oversight purposes must still be reported to appropriate Federal, State, or local governmental agencies, regardless of whether the same information is required to be reported under this subpart.

i. Governmental agencies include, but are not limited to, the following:

• Agencies that are charged with preventing or controlling disease, injury, disability.

• Agencies that conduct oversight activities authorized by law, including audits, investigations, inspections, licensure or disciplinary actions, or other activities necessary for oversight of the health care system.

H. Review, Dispute and Correction Process

1. Pre Submission Review - The applicable manufacturer and applicable GPO can give the physician, teaching hospital, or physician owner/investor the chance to see their information before sending it to CMS. This process is voluntary. CMS will not oversee pre-submission reviews. If you ask for a pre-submission review, there is a better chance that the information sent to CMS about you is accurate and complete.

2. Review, Dispute and Correction Process

a. Physicians, teaching hospitals, and physician owners/investors have the opportunity to review and work with the applicable manufacturers and applicable GPOs to make any necessary corrections to the information before CMS makes it public.

b. Once the applicable manufacturer or applicable GPO has submitted the date file to CMS, the process is as follows:

i. CMS will give physicians and physician owner/investors 45 days to review and work with the applicable manufacturers or applicable GPOs to correct the information. After those 45 days, applicable manufacturers or applicable GPOs will have an additional 15 days to submit corrections based on any disputes identified by physicians, and physician owners/investors. The review and correction period starts at least 60 days before the information is made public.

ii. During the review and correction period, physicians and physician owners/investors can dispute information about them that they do not think is correct.

iii. If data is disputed, CMS will notify the applicable manufacturers or applicable GPOs that some of their data has been disputed, but will not mediate the dispute directly. Applicable manufacturers or applicable GPOs should work with physician and physician owner/investor to correct the information.

iv. Once the dispute is resolved, the applicable manufacturers or applicable GPOs must send CMS a revised report for the correct data and re-attest that it is correct.

v. If the applicable manufacturer or applicable GPO cannot resolve the dispute with the physician or physician owner/investor and correct the data in the initial 45 days or subsequent 15 days, they should continue trying to find a resolution.

c. This review, dispute and correction process will impact publication as follows:

i. While the review and correction system will be open year-round, only the data corrections noted during the 45-day review and correction period, and subsequent 15-day dispute resolution period, will be updated before publication.

ii. CMS will update data from the current and previous year at least once annually, in addition to the initial data publication that followed the data submission.

iii. In the cases when a dispute cannot be resolved, the most recent submitted and attested data by the applicable manufacturer or applicable GPO will be published, but will be marked as disputed.

iv. CMS will monitor the frequency of disputes reported by physicians and the volume of disputes unresolved between physicians and applicable manufacturers or applicable GPOs.

v. Data corrections made by the applicable GPOs may be made at any time and the corrections will be updated with the next data refresh.

3. Audits and Penalties - Applicable manufacturers and applicable GPOs may be audited for compliance with the program requirements to submit timely, accurate, and complete data. Therefore, CMS requires all applicable manufacturers and applicable GPOs to keep all records related to payments and other transfers to value and/or ownership or investment interests for at least 5 years from the date the transaction is published on the CMS website.

4. Information CMS will Publish

a. CMS will annually publish all payments and other transfers of value and ownership and investment interest reported by applicable manufacturers about physicians and all payments and transfers of value to physician owners or investors made by applicable manufacturers and applicable GPOs.

b. CMS will make updates to the data at least once annually beyond the initial publication.

c. CMS will post disputed data that is unresolved by the end of the 60 day review, dispute and correction period as it was most recently submitted and attested, but will mark it as disputed.

I. Key Dates

1. Applicable GPOs must begin to collect the required data on August 1, 2013 and report the collected data through December 31, 2013 to CMS by March 31, 2014.

2. Open Payment registration began February 18, 2014 and closed March 31, 2014.

3. Testing and confirmation of data was to have been completed June 30, 2014.

4. By September 30, 2014, CMS was to have published the reported data on a publicly available website.

5. Beginning in 2014 and each year thereafter, data collection occurs between January 1 and ends on March 31. Applicable manufacturers and applicable GPOs are required to submit the annual reports to CMS electronically on or before March 31 for data collected during the preceding year.

6. Important information for industry, physicians and teaching hospitals for current year - The Open Payments review and dispute process begins on July 14 and ends August 27, 2014. Extended through September 11, 2014 for errors. The review, dispute and correction process allows physicians and teaching hospitals to review and initiate any disputes regarding the data reported about them by applicable manufacturers and applicable GPOs before CMS make the information public on September 30, 2014.

J. Do Physicians Have to Participate in Open Payments?

1. Physicians are not required to register with or send any information to Open Payments. However, to make sure we have the right information, we do encourage physicians to:

a. Become familiar with the information that will be reported about physicians.

b. Keep records of all payments and other transfers of value received from applicable manufacturers or applicable GPOs (physicians can use the Open Payments Mobile for Physicians app to track payments and other transfers of value they receive from applicable manufacturers and applicable GPOs throughout the year).

c. Register with CMS’ Open Payments system and subscribe to the listserve to receive updates regarding the program.

d. Look at the information applicable manufacturers and applicable GPOs submit on physician’s behalf.

e. Work with applicable manufacturers and applicable GPOs to make sure the information submitted about them is correct.

2. Internal Compliance Program

a. Although physicians have no reporting obligations, they should register to allow review and inspection.

b. Exercise caution regarding all industry transactions.

i. Written agreement

ii. Preview reports

iii. Correction process

c. Compliance audits - compare physician consents and disclosures to Open Payments information.

d. Conflict of Interest Policy

e. Medical staff and employment training and CME

K. Resources

1. CMS Open Payments Website -

2. Frequently Asked Questions (FAQs) -

3. CMS Open Payments User Guide for Industry -

4. Two Continuing Medical Education Activities Available - Also available for physicians to learn more about Open Payments is Continuing Medical Education (CME) activity. Two such activities and accessible via Medscape; both are accredited by the Accreditation Council for Continuing Medical Education:

a. “Are You Ready for the National Physician Payment Transparency Program?” Through the activity, participants will learn more about Open Payments, the steps involved in collecting and reporting physician data, key dates for implementation, and actions they can take to verify physician information in advance of website publication.

b. “The Physician Payment Transparency Program and Your Practice” Through this activity, participants will be able to identify opportunities for physicians to review transfers of value attributed to them and differentiate types of transfers of value that will or will not be reported under Open Payments.

5. Halifax Corporate Integrity Agreement

6. Myers and Stauffer LC Expert Report

7. Berkeley Research Group Expert Report

8. Toumey Opinion

9. Halifax Opinions

10. Special Fraud Alert: Laboratory Payments to Referring Physicians

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