Original Publish Date: 6/4/22
Physician Payments Sunshine Act and Open Payments
In 2010, the U.S. government passed the Affordable Care Act (ACA). Section 6002 of the ACA, commonly referred to as the Physician Payments Sunshine Act (PPSA) requires pharmaceutical and medical device companies to track and report payments to U.S. physicians and hospitals.
The Sunshine Act was designed to bring transparency to any financial relationships between physicians, hospitals, and drug companies.
Trillions of dollars are transferred annually between medicine, research, and pharmaceutical sales. There’s no question that there are opportunities for collusion, bribes, and fraudulent activities, especially at the expense of the patient.
Nearly any payment or other transfer of value made by pharmaceutical manufacturers to U.S. physicians or hospitals is reportable.
Some examples that need to be reported:
- Business meals with any educational or business discussion
- Consulting services
- Education (reprints, textbooks, etc.)
- Lodging and travel expenses during contracted services
- Royalties and licensing fees
The Centers for Medicare and Medicaid Services (CMS) publishes the data for all manufacturers annually on June 30th.
You can read more about the specifics of the Sunshine Act and Open Payments, here.
While it seems compliance may be difficult to assess, it’s really quite shocking how much physicians and hospitals make from drug and device manufacturers.
Excerpt from Carnivore Cure:
Most doctors receive an industry payout for prescribing brand-name drugs and devices.
A Harvard study shows that doctors who get these payouts are five percent more likely to prescribe these drugs.
The top three highest-paid doctors in 2018 made over $75M from pharmaceutical and device company payouts alone. You can check to see if your doctor received any drug or device company money in 2018 at Dollars for Docs (Figure 11.14).
You can also search a 2009-2013 database that has 3.5 million records of 17 pharmaceutical companies, disclosing payouts of $4 billion to doctors and hospitals.
The Pharmaceutical Industry
Now we may not care if our insurance covers our medication, but we should care. We may not pay out of pocket for brand-name medications but when our insurance company ends up paying more, we all end up covering that cost when we renew our annual health insurance. There’s a reason our deductibles keep going up but our coverage gets more shoddy.
The Health Insurance Industry
Insurance is a booming business. Just in the first quarter of 2021, UnitedHealth Group reported $5 billion in profit. It’s an increase of more than 45% compared to the first quarter of 2020 ($3.6 billion).
$5 billion in profits. In just three months.
UnitedHealth Group was my health coverage when I was in the intensive eating disorder facility. After a couple of weeks in the intensive care facility, United denied coverage based on my blood work. I wasn’t sick enough to get care.
Either I paid the $1500 daily fee or I moved down to a lower level of care.
I moved down.
I moved from 10 hours of daily care to 3 hours, two times a week.
The sad part of it all is that I tried to stay in intensive care for treatment. I really wanted to heal. I wrote in my journals that I felt suicidal (journals that the United auditors would see) but it didn’t matter.
United denied me because my lab markers were healthy.
Maybe I was too healthy but there were girls in the program that needed the support. Eventually, they also got denied.
Billions of dollars of profit and yet UnitedHealth Group, the nation’s largest health insurer, is one of the hardest insurance companies to get coverage. (Try to get dietitian sessions covered with United).
Oh, and if you’re wondering, the CEO of UnitedHealth Group, Andrew Witty, earned over $18.4M in 2021 alone. Interestingly, he earned less than the CEO of Cigna.
We no longer hold insurance with any of these big conglomerates. I have access to all labs and testing but for big emergencies, we are members of Samaritan Ministries. It’s a health-share community that tries to help one another in need. Every month, we write a check out to a real person in the community that has a medical emergency.
I’d rather give our money to a real person than any of these big companies that denied me services during my darkest days.
$5 billion in profit in just January, February, and March of 2021.