Practice Economics

Greater Transparency for Financial Information in Healthcare Will Prompt Questions from Patients


 

The movement toward greater transparency of financial information in healthcare is providing patients with access to data that might affect their healthcare decisions. Not all of this information is provided in ways that give patients the full picture, and they may turn to you for some added clarity.

Greater Transparency for Financial Information in Healthcare Will Prompt Questions from Patients

Greater Transparency for Financial Information in Healthcare Will Prompt Questions from Patients

Financial Relationships

The Physician Payments Sunshine Act (“Sunshine Act’) was passed as a part of the Affordable Care Act and requires the public disclosure of financial relationships between physicians and the manufacturers of pharmaceuticals, devices, and supplies, as well as group purchasing organizations. The first wave of financial information was publicly disclosed in 2014 on the federal Open Payments website. When it went live, the website disclosed approximately $3.5 billion in payments made by manufacturers to physicians and teaching hospitals during the last five months of 2013. These payments include research grants, consulting fees, speaking fees, travel, and other expenses. In the future, the payments reported will span an entire year, further increasing the total dollar amount paid by industry.

The Sunshine Act is intended to expose potential conflicts of interest in healthcare so that patients are more informed consumers of healthcare services. The relationships between healthcare providers and industry have been scrutinized much more heavily over the past decade. The concern is that physicians with a financial interest, whether through a consultancy relationship with industry or through the development of new technology, might be biased in treating patients because of these relationships. On the other hand, the majority of relationships between healthcare providers and industry can be beneficial. The relationships provide education to other providers, encourage the development of new treatment options, and improve the effectiveness of existing treatments.

The Centers for Medicare and Medicaid Services (CMS) explains on its website that the disclosed financial ties are not necessarily indicators of any wrongdoing, and that the intent of publishing the information is to promote transparency and discourage inappropriate relationships. Without the proper context, these relationships could be viewed as improper by patients and the general public. Therefore, providers should be prepared to answer patients’ questions and possibly even proactively provide details, such as the scope of any relationship with industry. Many providers begin to consult with a pharmaceutical or device manufacturer because of their experience using a particular product, rather than using a particular product after forming that financial relationship. This context could shift patients’ views of what it means for their providers to have this type of connection with industry.

As patients have more access to information about the costs for procedures, providers need to be aware of where within the facility they should refer patients with questions or concerns, including information on the financial assistance programs of the hospital. —Harris

Providers also need to be aware that government agencies, insurers, and attorneys can track this data. Although it is still too early to know the full scope of the potential uses of this information in government investigations, insurance carrier decisions, malpractice, or other legal actions, it does provide further reason to ensure that the information posted is accurate.

During the initial launch of the Open Payments website, some data was temporarily removed due to inaccuracies, including payments linked incorrectly to physicians with the same first and last names. While these issues are being reviewed by CMS, their existence proves how important it is for all physicians (even those not affiliated with the industry) to review the data reported in order to ensure the accuracy of their information.

Procedure Costs

Another transparency requirement in the Affordable Care Act was implemented on Oct. 1, 2014, as part of the inpatient prospective payment system final rule. Hospitals are now required to make their prices for procedures public and update the list annually. The final rule is not explicit with respect to the manner of the disclosure, except that either a price list or the policy for obtaining access must be made public. Some complain that the rule is difficult to comply with because it is vague, while others point out that this fact gives hospitals necessary flexibility in the method of reporting. It is at the hospital’s discretion whether to post the information online or in a physical location.

It is important to note that patients with private payer insurance coverage have distinct rates that are set through agreements between their health plans and the hospitals, so information on the public list very likely will not be applicable to those patients and could be a source of confusion.

As patients have more access to information about the costs for procedures, providers need to be aware of where within the facility they should refer patients with questions or concerns, including information on a hospital’s financial assistance programs.

There are so many sources of information that patients and their families can obtain before ever setting foot in the hospital. An open dialogue with patients that emphasizes the context of any financial relationships with industry, including the benefits, can help to minimize the potential that the information will be treated as suspect by your patients.

Further, as patients bear more of the costs of healthcare, questions surrounding the costs of procedures relative to published data may be encountered more frequently at the bedside and in office visits. This information may have an impact on patients’ decisions about their care.


Steven Harris is a nationally recognized healthcare attorney and a member of the law firm McDonald Hopkins LLC in Chicago. Write to him at sharris@mcdonaldhopkins.com.

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