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July 7, 2017

CMS: Drug and device companies paid providers $8.18B in 2016

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    Teaching hospitals and physicians received $8.18 billion from drugmakers and medical device manufacturers in 2016, an increase from 2015's total of about $7.5 billion, according to data from CMS' Open Payments database.

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    CMS launched the Open Payments System—which was required under the Affordable Care Act's Sunshine Act provision—in September 2014. According to the Becker's Hospital Review, drugmakers and medical device manufacturers under the Open Payments program are required to report payments they make to providers and teaching hospitals for beverages, food, licenses, lodging, investments, travel, and research. 

    In making the data public, Healthcare Finance reports, CMS aims to increase transparency about the financial relationships between physicians, teaching hospitals, and manufacturers; identify any wasteful spending; and monitor the influence drugmakers and device manufacturers have on care, education, and research.

    According to Becker's Hospital Review, CMS has also updated the Open Payments website so that visitors can compare specific providers to the national average and to other providers working in the same specialty. Visitors are also able to view payments received by providers in each state.

    Data details

    Overall, the data show that drugmakers and medical device manufacturers made $8.18 billion in payments and ownership or investment interests to nearly 631,000 physicians and 1,149 teaching hospitals.

    Of the $8.18 billion:
    • $4.36 billion went to research, accounting for nearly half of the total;
    • $2.8 billion were non-research-related payments, including drug representative meals, travel expenses, and consulting fees; and
    • $1.02 billion went toward ownership or investment interests.

    When broken down by type of payment, about 80 percent of the payments went toward services, consulting, and royalties, while roughly 20 percent went toward food, beverage, travel, and lodging, according to Healthcare Finance. Specifically, drugmakers and device manufacturers' payments included:

    • About $562 million for services other than consulting;
    • About $490 million for royalty or licensing;
    • About $366 million for consulting fees;
    • About $246 million for food and beverage;
    • About $190 million for travel and lodging;
    • About $24 million in grant money; and
    • About $44 million in honoraria.

    According to Modern Healthcare, providers and hospitals are able to review the data. Currently, physicians and hospitals are disputing only $39 million of the reported total (Dickson, Modern Healthcare, 7/5; Paavola, Becker's Hospital CFO Report, 7/5; Sullivan, Healthcare Finance, 7/5).

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