Norton Rose Fulbright: Physicians Payments Sunshine Act Data 33 Percent Unpublishable, Penalties Next?

Norton Rose Fulbright: Physicians Payments Sunshine Act Data 33 Percent Unpublishable, Penalties Next?

By  Benjamin Koplin, Selina Coleman and R. Jeffrey Layne

Despite extending the dispute-and-resolution deadline to account for the days that the Centers for Medicare & Medicaid Services (CMS) pulled down the reporting system, the public Physician Payments Sunshine Act website is still expected to go live in a matter of weeks. It now seems, however, that CMS will publish only two-thirds of the reported transaction data. CMS claims that the remaining third contains errors significant enough that it cannot be published. This is because the records contain “intermingled data,” which significantly degrades the reliability of the physicians-transaction links in the data set. A CMS press release, available here, details the errors, which include misreporting state license numbers and national provider identifiers (NPIs) for physicians with the same last and first names. CMS has explained that it identified and is in the process of correcting the mismatches by extensive data validation to verify the accuracy of physician identifiers, ensure that all payment records are attributed to a single physician, and remove incorrect data. CMS will release the corrected faulty data in June 2015: nine months after it publishes the two-thirds data set in September 2014.

We anticipate, however, that further review will identify additional inconsistencies and errors, whether before or after the data’s publication. Further, from the comments and concerns raised by physicians about the reported data, we expect that the validity of identity matching will become a secondary issue to the manufacturers’ and GPOs’ myriad interpretations and applications of the reporting requirements, inconsistencies that are already leading to a significant number of “disputes” with physicians as the physicians flag transfers not reported consistently across manufacturers. This is more than just a customer-relations issue: until the transactions are reported consistently, reliable interpretation will be impossible. For example, the discrete number of “forms of payment” available for reporting (limited to: (1) cash or cash equivalent, (2) in-kind items and services, (3) stock, stock option, or any other ownership interest, and (4) dividend, profit or other return on investment) has already led to a significant number of transactions being reported as “cash,” even though no actual “cash” was given to the physician. This approach will likely cause confusion and loss of public confidence in this important data set.

Beyond concerns about public perception of the data, the statute sets stiff penalties for mere misreporting. CMS has warned some reporting entities that the identified errors may compel CMS to start applying the available civil monetary penalties for failure to report in a timely, accurate, or complete manner. A civil money penalty of not less than $1,000, but not more than $10,000, will be applied for each payment or other transfer of value or ownership or investment interest not reported in a timely, accurate, or complete manner (capped at $150,000), and knowing failure to report in a timely, accurate, or complete manner will result in a civil money penalty of not less than $10,000, but not more than $100,000, for each payment (capped at $1,000,000). 42 C.F.R. § 403.912. Accordingly, applicable manufacturers and group purchasing organizations should carefully review their submissions to ensure compliance with their reporting obligations. Of course, there are a great many topics about which CMS has yet to issue clarifying guidance.

As noted above, in the wake of the nearly two-week system shutdown required to review and revalidate the data, CMS has extended the 45-day verification period to September 8 instead of August 27. The 15-day additional period for correcting any disputed information — CMS has adopted a strictly “hands off” approach to mediating disputes — will now end on September 23. CMS has stated that it remains committed to make the Sunshine Act data available to the public by September 30.

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