Research · 12 min read
What Open Payments Shows About a Prescriber, and What It Leaves Out
Drug and device makers have to report what they pay clinicians, by name, to a public federal database. The interesting part is the exclusion list — fourteen categories that never appear, including the one that covers samples and coupons, and the one that covers a company's own employees.
Key takeaways
- Manufacturers of covered drugs and devices must report payments to named clinicians annually, and CMS publishes the result publicly.
- Covered recipients are six clinician types plus teaching hospitals — and never a bona fide employee of the manufacturer doing the reporting.
- A company that manufactures nothing is not an applicable manufacturer, so payments from a telehealth brand to its own clinicians are outside this scheme.
- Every payment carries one of eighteen mutually exclusive nature categories and one of six forms; royalty and ownership interest carry the most signal.
- Fourteen categories are excluded outright, including product samples, coupons and vouchers, patient educational materials, and discounts and rebates.
- Small payments below an annually indexed threshold are excluded unless the year's aggregate passes a second indexed threshold.
- An entry marked disputed is the manufacturer's version, published because the parties had not agreed by the deadline.
- The subpart preempts state laws requiring the same type of manufacturer disclosure, except where information is required for public health or health oversight purposes.
Answer first: it is a payment ledger, and it is public
Federal regulation requires manufacturers of covered drugs, devices, biologicals and medical supplies to report to CMS, annually, the payments and other transfers of value they provide to named clinicians. CMS publishes it, searchable by name, as Open Payments.
The reporting is not summary-level. Each entry names the clinician as listed in the national provider registry, with their primary business address and specialty. It carries their National Provider Identifier where one exists, plus at least one state professional license number and the state it is held in. Then the payment itself: the amount, the date, the form, the nature, and the marketed or brand name of the related product.
Reports are attested. Each one, including any later correction, must carry an officer's attestation. It may come from the chief executive, chief financial or chief compliance officer, or another officer, and it states that the information is timely, accurate and complete to the best of their knowledge and belief.
So the database is genuinely strong evidence about what it covers. Nearly everything worth knowing here is about what it does not cover.
Who counts as a covered recipient
The definition was expanded beyond physicians and now names six clinician types. A physician, physician assistant, nurse practitioner, clinical nurse specialist, certified registered nurse anesthetist, or certified nurse-midwife. Teaching hospitals are covered separately.
Then comes the qualifier that matters most for anyone reading this about a telehealth program. A clinician is a covered recipient only if they are not a bona fide employee of the applicable manufacturer that is reporting the payment.
Read that as a boundary rather than a loophole. Employment compensation is not a transfer of value to an outside party, so the database is silent about clinicians on a manufacturer's own payroll.
There is a second boundary that matters even more here. The reporting duty falls on applicable manufacturers and applicable group purchasing organizations. A telehealth brand that does not manufacture a covered product is neither, so what it pays its own clinicians does not enter this database from any direction.
What counts as a covered product
The definition has two halves, and both have to be satisfied.
First, payment for the product must be available under Medicare, or under a state Medicaid or children's health insurance plan. That can be separately, through a fee schedule or formulary, or as part of a bundled payment.
Second, it must be of a qualifying type. For a drug or biological, that means one which by law requires a prescription to be dispensed. For a device, it means one requiring premarket approval by or premarket notification to FDA.
The manufacturer side is drawn broadly. An applicable manufacturer is an entity operating in the United States, engaged in the production, preparation, propagation, compounding, or conversion of a covered product. Production solely for use by or within the entity itself, or by its own patients, is outside that. The definition expressly excludes distributors and wholesalers, including repackagers, relabelers and kit assemblers, that do not hold title.
Compounding sits inside that verb list. Whether a given compounder is an applicable manufacturer therefore turns on the covered-product test above rather than on the word compounding by itself.
The eighteen categories, and why they are worth reading
Every payment must be assigned a nature, and the categories are mutually exclusive — one payment, one category, chosen as the designation that best describes it.
Consulting fee. Compensation for services other than consulting, including serving as faculty or a speaker at an event that is not a continuing education program. Honoraria. Gift. Entertainment. Food and beverage. Travel and lodging, including the specified destinations. Education. Research. Charitable contribution. Debt forgiveness. Royalty or license. Current or prospective ownership or investment interest. Compensation for serving as faculty or a speaker for a medical education program. Long term medical supply or device loan. Grant. Space rental or facility fees, for teaching hospitals only. Acquisitions.
Two of those carry more signal than the rest for a reader trying to understand a relationship. Royalty or license means the clinician has an interest in the product itself. Current or prospective ownership or investment interest means the same thing in a different form.
The form of a payment is reported separately from its nature, in six values. Cash or cash equivalent. In-kind items or services. Stock, or a stock option. Any other ownership interest. And dividend, profit or other return on investment.
Where a payment could reasonably fall in more than one category, the manufacturer picks the one it deems most accurate. That is a judgment, and it is worth remembering when comparing two entries that look different but may describe similar arrangements.
The fourteen exclusions, which are the real story
Fourteen categories are excluded from reporting outright. Several of them cover exactly the activity people assume they are looking at when they open the database.
Product samples, including coupons and vouchers a patient can use to obtain samples, where they are not intended to be sold and are intended for patient use. That is a large channel and none of it appears.
Educational materials and items that directly benefit patients or are intended to be used by or with patients, including the value of a manufacturer's services to educate patients about a covered product.
Discounts, including rebates. In-kind items used for the provision of charity care. Short term medical supply or device loans. Items or services provided under a contractual warranty.
Indirect payments where the manufacturer does not know the identity of the covered recipient during the reporting year or by the end of the second quarter of the following year.
Small payments below an annually indexed threshold, unless the year's aggregate to that clinician exceeds a second indexed threshold. Both amounts are increased each year by the change in the consumer price index for all urban consumers, and CMS publishes the values 90 days before the reporting year begins.
The rest sit at the edges. A transfer to a clinician acting as a patient or research subject rather than professionally. A dividend or interest in a publicly traded security or mutual fund. Payments for health care to a manufacturer's own employees and their families under a self-insured plan. Payment solely for a licensed non-medical professional's non-medical services. Payment solely for services relating to an administrative proceeding, legal defense, prosecution, settlement, judgment or arbitration. And anything transferred solely in the context of a personal, non-business relationship.
How research money is reported differently
Research payments have their own rules, and they carry more context than an ordinary line item.
They are reported separately from other payments. Each must name the research institution, individual or entity receiving the money, the total amount including all research-related costs under the written agreement or protocol, and the name of the research study.
They must name the related covered products, with National Drug Codes for drugs and biologicals and device identifiers for devices, and must carry information about each principal investigator who is a covered recipient.
Two fields are optional and worth noticing when they are filled in. Contextual information for research, and the ClinicalTrials.gov identifier.
That last one is the bridge. Where the identifier is present, a payment record and a registered trial record can be read against each other, which is a much stronger check than either alone.
Preclinical studies, meaning before any human studies have begun, are reported with a reduced field set: the research entity name, the total amount, and the principal investigators.
The review window, and what a disputed entry means
Before publication, manufacturers, group purchasing organizations, covered recipients and physician owners get a review period of not less than 45 days to review and submit corrections. The regulation adds that in no case may that period prevent the information from being made public.
Clinicians can see the data submitted about them for the previous reporting year, and can initiate a dispute, which goes to the manufacturer to be resolved between the parties.
Timing matters. Disputes can be started any time after the 45-day period begins and before the end of the calendar year. But changes from a dispute started outside the 45-day window wait until the data is next refreshed.
For a correction to land before publication, the manufacturer must notify CMS of the resolution no later than 15 days after the 45-day period ends.
And here is the reading skill. If a dispute is not resolved by that point, CMS publishes the manufacturer's version of the entry and marks it as disputed. A disputed flag does not mean the entry is wrong. It means the two parties had not agreed by the deadline, and the company's number is what you are looking at.
Errors found later must be corrected immediately on confirmation, CMS notifies the affected clinician that new information is available to review, and the site is updated with corrections at least once a year.
It preempts state disclosure laws, with one carve-out
Take a payment from an applicable manufacturer to a covered recipient. For that, this subpart preempts any state or local statute or regulation requiring a manufacturer to disclose or report, in any format, the type of information this subpart requires.
That is why looking for a second, state-level source on the same payment usually finds nothing. The federal rule occupied the field for that category of information.
The carve-out is public health. Some information must still be reported to a federal, state or local agency. That covers public health surveillance, investigation, and other public health or health oversight purposes, regardless of whether the same information is reported here.
The regulation names the kinds of agencies it means. Those charged with preventing or controlling disease, injury or disability. And those conducting oversight activities authorized by law, including audits, investigations, inspections, and licensure or disciplinary actions.
How to use it without over-reading it
Search the clinician's name and check the identifiers before reading anything else. Common names collide, and the record carries specialty, business address, National Provider Identifier and a state license number precisely so you can tell two people apart.
Read the nature column before the amount. A royalty and a meal are both payments and they mean entirely different things about a relationship.
Notice which products are named. Each entry carries the marketed or brand name of the related product unless the payment relates to no particular product.
Treat a disputed flag as a note, not a verdict. It records that the parties had not agreed by the deadline.
And hold the boundaries in mind while reading a blank result. Five situations produce nothing here. A clinician employed by a manufacturer. A clinician paid by a telehealth company that manufactures nothing. Samples and coupons. Discounts and rebates. And payments below the indexed threshold. In each case the silence reflects the rule's reach, not an absence of activity.
The database records a payment. It does not record influence, and it makes no finding that any payment affected anyone's prescribing.
Sources
- 42 CFR part 403, subpart I — Transparency Reports and Reporting of Physician Ownership or Investment InterestsSection 403.900 for the scope covering applicable manufacturers and applicable group purchasing organizations. Section 403.902 for the definitions of applicable manufacturer (including the verbs production, preparation, propagation, compounding and conversion, and the exclusion of distributors and wholesalers not holding title), applicable group purchasing organization, covered drug/device/biological/medical supply (the Medicare, Medicaid or CHIP payment-availability test plus the prescription-required or premarket approval or notification test), covered recipient (the six clinician types and teaching hospitals, excluding a bona fide employee of the reporting manufacturer), and indirect payments. Section 403.904(a) for annual reporting of direct and indirect payments; (c) for the required fields including name as listed in NPPES, business address, specialty, National Provider Identifier, state professional license number and state, amount, date, form, nature and related product brand name; (d) for the six forms of payment; (e) for the mutual exclusivity rule and all eighteen nature-of-payment categories; (f) for the special research rules including study name, related products with NDCs or device identifiers, principal investigator information, and the optional contextual-information and ClinicalTrials.gov identifier fields, plus the reduced preclinical field set; (g) for the food and beverage allocation rules; and (h) for all fourteen exclusions, including product samples with coupons and vouchers, patient educational materials, discounts and rebates, short term loans, warranty items, in-kind charity care, unknown-identity indirect payments, the CPI-indexed de minimis and aggregate thresholds published 90 days before the reporting year, and the personal non-business relationship exclusion. Section 403.908(e) for the officer attestation and (g) for the 45-day review period, the dispute process, the 15-day post-period resolution deadline, publication of the manufacturer's version marked as disputed, and the correction and annual-refresh duties. Section 403.914 for preemption of state and local manufacturer-disclosure laws and the public health and health oversight carve-out. ⛔ A first request against subchapter-B returned 404 with the same extracted text length as the nonsense-path control; the URL above is the one that rendered.
- CMS Open PaymentsOnly the existence and identity of the public search tool at this address. ⛔ The document served is a client-rendered shell: its body extracted to twenty characters of visible text, reading "CMS Open Payments". Nothing else on that site is quoted or relied on in this article, and every substantive statement above is taken from the regulation. A same-host control in the same run, a nonsense path, returned HTTP 404 at 8,973 bytes, confirming the address resolves to a real page rather than to a catch-all.
Frequently asked questions
Who has to report, and about whom?
Applicable manufacturers of covered drugs, devices, biologicals and medical supplies, and applicable group purchasing organizations, report annually to CMS. The clinicians covered are physicians, physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists and certified nurse-midwives who are not bona fide employees of the manufacturer doing the reporting, plus teaching hospitals. Each entry carries the clinician's name, business address, specialty, National Provider Identifier where one exists, a state license number, and the amount, date, form and nature of the payment.
Would payments from a telehealth company to its clinicians show up?
Not through this rule. The duty falls on applicable manufacturers and applicable group purchasing organizations. A company that does not produce, prepare, propagate, compound or convert a covered product is neither, so what it pays its own clinicians is outside the reporting scheme entirely. Separately, a clinician who is a bona fide employee of a reporting manufacturer is excluded from the covered-recipient definition, so employment compensation does not appear either.
Why is there nothing about samples or coupons?
Because they are on the exclusion list. The regulation excludes product samples, including coupons and vouchers that a patient can use to obtain samples, where they are not intended to be sold and are intended for patient use. It also excludes educational materials and items that directly benefit patients, and discounts including rebates. Those are among fourteen excluded categories, and their absence from a search result reflects the rule rather than the absence of activity.
What does it mean when an entry is marked disputed?
It means the clinician and the manufacturer had not resolved a disagreement by the deadline, which is 15 days after the end of the 45-day review period. In that case CMS publishes the manufacturer's version of the entry and marks it as disputed. It is not a finding that the entry is wrong, and it is not a finding that it is right. Disputes started outside the 45-day window can still be resolved, but any resulting change waits for the next data refresh.
Does a payment mean a prescriber was influenced?
No, and the regulation makes no such finding. It is a disclosure scheme: it records that a transfer of value occurred, from whom, for what, and in relation to which product. Reading the nature category matters more than reading the amount, since a royalty or an ownership interest describes a very different relationship from a meal at a conference.
Is there a state-level version I should also check?
Generally not for the same information. For a payment from an applicable manufacturer to a covered recipient, this subpart preempts any state or local law requiring a manufacturer to disclose or report, in any format, the type of information this subpart requires. The exception is public health. Information a federal, state or local agency requires for public health surveillance, investigation, oversight, audits, inspections or licensure actions must still be reported to that agency.
Can research payments be tied back to a specific study?
Often, yes. Research payments are reported separately. They must include the name of the research study and the total amount, covering all research-related costs under the written agreement or protocol. They must also name the related covered products, with National Drug Codes or device identifiers, and carry information about each covered-recipient principal investigator. Two fields are optional: contextual information, and the ClinicalTrials.gov identifier. Where the identifier is filled in, a payment record can be read directly against the registered trial record.