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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.