Cloudy Skies Ahead For Providers? CMS’ Release Of Medicare Billing Data Combined With Physician Payment Sunshine Act Data May Boost Fraud Litigation

In February 2013, we reported (on our Healthcare Law Blog) that the Centers for Medicare and Medicaid Services (CMS) announced the final rule for the Physician Payments Sunshine Act. In the interest of providing more transparency for patients, the final rule requires pharmaceutical and medical device manufacturers and group purchasing organizations to report payments or transfers of value provided to physicians or teaching hospitals and to report physician ownership and investment interests. The deadline for submission of aggregate data was March 31, 2014, and the deadline for submission of detailed data is June 30, 2014. CMS has already established a website to display that data beginning in September 2014. In the meantime, also in the interest of transparency, on April 9, 2014 CMS touted the "historic" release of data showing utilization, payments, and submitted charges for services and procedures provided by physicians and other health care professionals to Medicare beneficiaries. As claimed by CMS, this data covers "880,000 distinct health care providers who collectively received $77 billion in Medicare payments in 2012, under the Medicare Part B Fee-For-Service program" and will enable "a wide range of analyses that compare 6,000 different types of services and procedures provided, as well as payments received by individual health care providers." (See press release. The data is available here.) The consequences of such unprecedented releases of payment/investment interest and Medicare billing data are significant.

While Medicare billing data has always been available to the Government, Sunshine Act data has not been previously available on this scale. According to CMS, compliance with the Act's reporting requirements does not preclude liability under statutes such as the Anti-kickback Act (41 U.S.C. §51 et seq.). Federal and state prosecutors have already indicated that Sunshine Act reports are a potential source of data for new False Claims Act (FCA) investigations. Moreover, the data could support an inference of off-label marketing if, for example, a pharmaceutical manufacturer makes payments to physicians in unexpected specialties.

Perhaps of more concern is how the qui tam plaintiffs' bar will react. For fiscal years 2009 - 2013, the DOJ used the FCA to recover $12.1 billion in federal health care dollars, and the vast majority came from qui tam cases. (See here.) Certainly, Sunshine Act and Medicare billing data can be used to...