Drug and device payment data reveals a troubling image of potential fraud

Somewhere in my parents' basement, amid a box of Beanie Babies, Pogs and other 90s fads, is a Magic Eye book, popularized by the seemingly insane and useless patterns that actually concealed an elaborate 3-D picture.

I can remember flipping through the pages of those books, forcing myself cross-eyed until my retinas ached, in an effort to reveal the picture that would suddenly erupt from the page. Once that image finally revealed itself though, it seemed so easily visible. If I flipped back to that page, the odd shapes and designs faded to background and the image emerged almost effortlessly.

I haven't even thought about Magic Eye books for a couple of decades, but as I scanned through the Centers for Medicare & Medicaid (CMS) data released last week that reveals drug and device manufacturer payments to physicians and hospitals, I felt that familiar strain, albeit without the aching retinas.

Like its predecessor, physician payment data, this new release from CMS is a mish-mash of numbers and figures documenting thousands of payments to physicians. But look hard enough, and it reveals a startlingly honest look at the way providers and manufacturers are entwined with one another, to the tune of $6.49 billion in 2014.

That's a disturbing number for a whole host of reasons, not the least of which is that drug manufacturers are inserting themselves into healthcare facilities and physician practices with increasing ferocity. Or, perhaps that vigor was already there, we just didn't know about the extent of it until CMS began dumping its data.

A cynic might see this kind of unrestrained spending as a form of bribery or kickbacks. I'd be hard pressed to disagree, particularly given the pharmaceutical industry's long, expensive history of anti-kickback violations.

The question going forward is, how much is too much when it comes to drug and device companies paying providers? Is there a point at which a prescription is physically written by the physician, but with a gentle nudge from Genetech, AstraZeneca, Pfizer or any of the other companies that gave more than $80 million to physicians and hospitals last year?

That definitive demarcation doesn't exist, but the rate at which physicians and hospitals accept these payments has reconfigured the way we look at their relationship with drug companies. Perhaps, more importantly, CMS' annual release of this data will prompt those accepting the money to rethink how much or how often they are paid.

That's not to say the data alone should be an indictment of any physician who accepts money from a manufacturer. In fact, many of the physicians who were paid tens of millions by pharmaceutical companies and device manufacturers were paid in the form of acquisitions, or royalties that use the physician's intellectual property.

However, those numbers get a little murkier when it comes to speaker and consulting fees or food and beverage bills that can add up quickly and will likely draw the ire of federal investigators.

And it's not just the dollar amount that can get physicians into trouble. The sheer number of accepted payments can be particularly unnerving. Since August 2013, the top five physicians with the highest number of payments ranged from 1,226 to 1,711, these doctors often receiving at least one payment on nearly every business day during that time period.

And, as a recent ProPublica story pointed out, those payments can raise a red flag to investigators looking for fraudulent behavior. John Fritz, who logged the third-highest number of payments in an 18-month period, was one of five physicians charged with taking kickbacks from a medical imaging facility just last month.

Like those discombobulated Magic Eye pictures, a clearer picture begins to emerge amid that mound of data.

From another perspective, the amount of money tied to one particular drug can also be alarming. AstraZeneca paid physicians and hospitals $22.5 million in payments related to the diabetes drug Bydureon, according to a Bloomberg Business analysis. Johnson and Johnson ranked second, making $19.5 million in payments related to Invokana, also prescribed for diabetes. But, as Jerry Avorn, a professor of medicine at Harvard Medical School, told Bloomberg Business, an inexpensive generic drug known as metformin is typically the first treatment choice for diabetes, and yet no one is paying millions in consulting fees for that drug.

Coincidentally, the top four most frequently paid physicians all received payments tied to Bydureon. Ana Stankovic, a physician based on Watertown, Massachusetts, received 1,711 payments between August 2013 and December 2014 totaling $814,030, $230,000 of which was linked to Bydureon, according to ProPublica. Virginia physician Farhad Zageneh, who received 1,610 payments over the same time period, received $128,000 tied to Bydureon and $123,000 from Invokana.

You can bet federal investigators will be paying attention to these types of trends, particularly now that they don't have to strain as hard to see that image lurking underneath. It's an image that may not be enough to levy kickback allegations, but, like physician payment data, it will likely serve as a stepping stone toward a broader investigation.

One question still remains: How will physicians and hospitals respond? Given the defects already ingrained within the pharmaceutical industry, I wouldn't expect to see drug companies back off. On the other hand, providers might have a change of heart when that previously concealed image pops out at them, like it has for the rest of us, and becomes too difficult to ignore. - Evan (@HealthPayer)

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