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CMS Issues New Policy on Disclosure of Physician Payment Information

Written by:  Thomas S. Crane

On January 17, 2014, the Centers for Medicare & Medicaid Services (CMS) announced that it will release Medicare expenditure data on specific physicians under the Freedom of Information Act (FOIA).  This new “transparency” policy has been in the works for several months and is a watershed event with respect to the data informatics that will soon be available to interested parties.

Non-disclosure of physician-specific Medicare payment information dates back to the late 1970s when a court permanently enjoined the Department of Health and Human Services (HHS) from releasing such information after concluding that physicians have a compelling privacy interest in preventing the disclosure of such data.  In 1980 HHS adopted a policy consistent with this injunction. However, on May 31, 2013, the district court vacated this injunction.

The new policy permits disclosure of individual physician payment information under FOIA Exemption 6 and may be seen as just a small first step towards transparency.  CMS states that it will make “case-by-case determinations” on disclosure and will “weigh the balance between the privacy interest of individual physicians and the public interest in disclosure of such information.”  These comments indicate that CMS intends to proceed cautiously at the outset.

Physician payment information can be of significant value in a number of ways.  The new health care environment created by the Affordable Care Act mandates that providers better understand and take into account the health care costs associated with the services they provide.  While information on Medicare payments to physicians is important, the more valuable information results from connecting this data to the wider health care system costs for which physicians are responsible through their ordering and referral practices.  For example, just this month CMS proposed changing its disclosure practices under the Medicare Part D program for prescriber data found in the prescription drug event (PDE) data base.  CMS is proposing to release to external entities “unencrypted prescriber.  .  . identifiers contained in PDE records.”  In describing the reasons for this change, CMS stated that, “The agency has an important role to play in supporting opportunities to accelerate the transition to a data-driven and information-based health care delivery system in this country.”

Wider uses of such data can easily be imagined.  For example, we can expect that various stakeholders will seek access to these data sources to further link them to manufacturer disclosure information made available later this year under the Sunshine Act.  Moreover, such linked data sources will likely be used in health care enforcement, particularly by relators bringing cases under the False Claims Act and by counsel defending these cases.  Finally, these data sources will be enormously helpful in a variety of health system research contexts.

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Theresa advises clients on all aspects of the pharmaceutical supply chain, including counseling industry stakeholders on a range of business, legal, transactional, and compliance matters. She provides clients with strategic counseling and creative business modeling that considers legal restrictions and regulatory risk in light of innovation and business goals.