There are specific ways that open payments affect Medicare that people need to understand so they can adjust accordingly. According to the Centers for Medicare and Medicaid Services, 6.27% of all payments made with Medicare funds are improper or fraudulent. This number demonstrates the problem that open payments seek to address.
Open Payments
Some facilities and health care professionals have unfortunately exploited Medicare funding. Still, open payments combat the problem by making the details of Medicare-related financial transactions available to the public. Learn more about the effect of open payments on Medicare.
Data Encourages Transparency
The industry established open payments in 2014 to bring an essential component to the Medicare system — transparency. Before the program’s rollout, a system of so-called “kickbacks” had emerged that allowed medical professionals to receive compensation for purchases made with Medicare funds. This relationship encouraged actions motivated by monetary gain rather than patient wellness. Likewise, it cost the Medicare system millions in misspent funds. To maintain this transparency, providers and companies must submit to audits. If not, a violation can incur fines of up to $1,000,000 in civil monetary penalties.
Anybody Can Access the Data
The open payments program minimizes the potential for Medicare misuse by collecting, tracking, and publishing data for payments made from health care companies to facilities and practitioners. This data cache is handy because anybody, including Medicare beneficiaries, can access it. It allows insureds to see whether their providers have received compensation. Thus, it allows them to participate in accountability for medical companies. It also protects insureds by preventing quid pro quo relationships throughout the health care industry.
It Affects Physicians and Teaching Hospitals
The parties primarily affected by open payments are physicians and teaching hospitals that do business with medical companies — such as pharmaceutical companies or medical device manufacturers. These transactions are not necessarily untoward; they are often necessary to help patients access the care they need with Medicare coverage. Still, the open payments program monitors these transactions because of the potential for exploitation. Monitoring does not mean any legal action will follow. However, it simply means that insureds and other stakeholders may access, analyze, and use the data as they wish.
Only Certain Payments Are Reported
The explicit exchange of monetary payment for receipt of Medicare funds is illegal, so many medical companies have tried to circumvent this mandate by offering compensation in indirect and informal ways. For example, a pharmaceutical company seeking to incentivize a doctor to prescribe a medication may reward the physician with a speaking opportunity that comes with a very lucrative speaker’s fee. For this reason, medical device and drug manufacturers must report many types of compensation, including consulting fees, gifts, entertainment goods, food, and charitable contributions.
About Brooks, Todd & McNeil
Since 1839, the independent agents at Brooks, Todd & McNeil have been pleased to offer our community the best and most affordable policies from a variety of providers. Our dedicated facilitators are ready to put their 75 years of combined experience to work on your claims. To learn more about our products and services, contact us today at (800) 448-4567.