How Does CMS Open Payments Increase Healthcare Transparency?

On an annual basis, the U.S. Centers for Medicare & Medicaid Services (CMS) releases new data from its Open Payments program, which states that it is "a statutorily required, national disclosure program that promotes transparency and accountability." Open Payments collects and publishes data about financial relationships between drug and medical device companies (also referred to as "reporting entities") and certain healthcare providers, also referred to as "covered recipients." The financial relationships can involve payments made to providers for research, meals, travel, gifts, speaking fees, and others.

CMS Open Payments was created to "provide the public with a more transparent health care system", and it also provides a unique opportunity for life sciences companies to evaluate how their spending, in certain buckets, compares to their peers. However, as you can imagine, there is an enormous difference between being given access to 78 million records and trying to comprehend those records. For compliance stakeholders who have had difficulty obtaining even a structured analysis that makes the data consumable and usable, Venops can provide analyses about commercial engagements that are specific to brand and channel, and provide a holistic understanding of the competitive landscape.

In this blog, we’ll explain what CMS Open Payments is, how it works, and why it plays a big role in making healthcare more open, honest, and fair for everyone.

What Is CMS Open Payments?

CMS Open Payments is a program run by the Centers for Medicare & Medicaid Services (CMS). It was created under the Physician Payments Sunshine Act, which is part of the Affordable Care Act. The goal? To shine a light on the financial ties between healthcare providers and the companies that make drugs, devices, biologicals, and medical supplies.

Since 2014, CMS Open Payments has collected and published information about payments and other transfers of value made by manufacturers to:

• Doctors (physicians)
• Teaching hospitals
• Advanced practice providers (since 2021)

This data is available to the public at https://openpaymentsdata.cms.gov/.

What Kinds of Payments Are Reported?

The CMS Open Payments program tracks different types of payments and transfers of value. These include:

• Consulting fees
• Research funding
• Honoraria for speaking
• Travel and lodging
• Food and beverages
• Gifts
• Royalties or licenses

It also records when companies give money for research, even if the doctor isn’t directly paid. For example, a payment to a hospital for a research project with a physician as the lead investigator is still reported.

How Does This Increase Transparency?

Here are several ways CMS Open Payments increases transparency in healthcare:

1. Shines a Light on Financial Relationships

Before CMS Open Payments, most people had no idea if their doctors received money from drug companies. Now, anyone can look up this information. Patients can see:

• Which companies paid their doctor
• How much was paid
• What was it for

This gives patients the power to make informed decisions about their care.

2. Builds Trust Through Openness

Transparency builds trust. By showing financial connections between doctors and companies, CMS Open Payments helps remove the secrecy. This doesn’t mean all payments are bad — sometimes, a doctor is paid for helping with important research or teaching. But now, it’s all out in the open.

When patients know the facts, they can trust the system more.

3. Reduces Conflicts of Interest

Some worry that payments from companies might influence doctors’ choices, like prescribing a certain drug or using a specific device. CMS Open Payments discourages inappropriate behavior by making these ties public.

When doctors know that payments are being watched and reported, they may be more careful about accepting them.

4. Encourages Responsible Industry Practices

It’s not just about doctors. Drug and device manufacturers also think twice about their payments and relationships when they know the data will be made public. This leads to more responsible marketing, less unnecessary spending, and better focus on patient needs.

5. Supports Better Research and Policy Making

The data collected by CMS Open Payments is huge and valuable. Researchers, policymakers, and watchdog groups can use it to:

• Analyze trends
• Study the impact of payments on patient care
• Create better rules to protect patients

For example, researchers might look at whether doctors who get more money from a certain company prescribe that company’s products more often. If they do, this can raise red flags.

Real-Life Impact: What the Data Shows

Since its launch, Open Payments CMS has published millions of records. In 2022 alone, over $12 billion in payments were reported.

The data has helped uncover:

Unusual patterns in payments

• Links between payments and prescribing habits
• Industries targeting specific specialists

It has also led to news reports, investigations, and new policies in hospitals and health systems. Some institutions now limit the types of payments their staff can accept — all thanks to transparency.

Can Patients Use CMS Open Payments?

Yes! The database is free and easy to use. You can search for your doctor by name, state, or specialty and view:

• Total payments
• Number of transactions
• Payment categories

This doesn’t mean you should stop seeing a doctor just because they got a payment. But it gives you a chance to ask questions, like:

• "Why did you receive this payment?"
• "Did it affect your decision about my treatment?"

Good doctors will appreciate your interest and be open with you.

What Are the Limits of CMS Open Payments?

While the program is a big step forward, it’s not perfect. Some of the limits include:

• Not all doctors are covered: Only physicians, teaching hospitals, and certain advanced practice providers are included.
• Not all payments are reported: Some small payments may be excluded.
• Data accuracy issues: Sometimes, doctors don’t agree with what's reported. CMS allows them to review and dispute the data, but not all do.

Still, even with these issues, CMS Open Payments is a powerful tool for transparency.

Wrapping Up!

CMS Open Payments brings transparency to healthcare by shining a light on financial relationships so all can see them. It enables patients to make more informed decisions, holds doctors and companies accountable, and fosters trust in the healthcare system.

Transparency doesn't mean that these payments are bad -- but they shouldn't be unknown. Transparency means that you can make informed decisions about your healthcare and have honest conversations with your care providers.

As healthcare continues to change, programs like this are critical to build a system that is ethical, patient-centered, and trustworthy.

Leaders in healthcare regulatory compliance. Advocates for the private practice. Oig regulatory consultants.