Data Management

Requirements for Physician

Payment Transactions

A DataFlux White Paper

Prepared by David Loshin
Introduction
Between the years 1996 and 2005, the annual spending on pharmaceutical industry
direct-to-consumer marketing, advertising and promotion to health care
professionals rose from $11 billion to practically $30 billion. By 2005, the majority of
that activity consisted of professional promotion and over $18 billion worth of free
samples.1 For the pharmaceutical industry, this significant marketing investment is a
double-edged sword – while it promotes awareness of drugs and devices to the
health care provider community, payments by drug, device and medical supply
companies to medical practitioners might be construed as influencing practitioner
decisions. The risk lies in the potential for creating a conflict of interest on behalf of
that same community of health care practitioners, leading to concerns about the
objectivity of physicians and, ultimately, patient safety.

There has been a growing sentiment that establishing rules for physician payment
transparency would reduce the impact of pharmaceutical marketing and promote
awareness of appropriate prescription and drug safety. While many states already
have laws requiring pharmaceutical and medical device manufacturers to publicly
report gifts and payments made to physicians and other health care practitioners and
providers, provisions for physician payment transparency were included in the Patient
Protection and Affordable Care Act of 2009 (H.R. 3590, section 6002), which was
signed into law on March 23, 2010.

The inclusion of these provisions in the health care reform legislation has
consequences for the pharmaceutical and medical device industry with respect to the
ability to capture, manage and organize data in order to generate reports to support
compliance with the transparency reporting directives. This paper explores just a few
of the data management requirements necessary to support compliance with the
reporting requirements for physician payment transparency and disclosure.

Using the text of the federal legislation as a starting point, the paper first seeks to
understand how some of the key data concepts factor into compliance reporting.
Next, the paper discusses the complexity of the reporting requirements, challenges
to establishing the proper business processes for documenting transfers of value,
and the need for analytic reporting. Finally, after reviewing the dependence on high
quality data, the paper suggests that ancillary benefits can be achieved as a
byproduct of instituting best practices for data quality and data governance.

1
Julie M. Donohue, Ph.D., Marisa Cevasco, B.A., and Meredith B. Rosenthal, Ph.D. ,
“A Decade of Direct-to-Consumer Advertising of Prescription Drugs,” NEJM August
16, 2007, accessed via http://content.nejm.org/cgi/content/full/357/7/673.

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Physician Payment Transparency Provisions –
Information Issues
Understanding the compliance reporting implications of physician payment
transparency with respect to information management begins with a review of the
actual language of the health care reform legislation. This excerpt, which is taken
from section 1128G(a)(1)(A) of the physician payments sunshine provision of the
Patient Protection Affordable Care Act, states that on an annual basis,

“… any applicable manufacturer that provides a payment or other transfer of

value to a covered recipient (or to an entity or individual at the request of or
designated on behalf of a covered recipient), shall submit to the Secretary, in
such electronic form as the Secretary shall require the following information
with respect to the preceding calendar year:

i. The name of the covered recipient.

ii. The business address of the covered recipient and, in the case of a covered
recipient who is a physician, the specialty and Medicare billing number of the
covered recipient.

iii. The value of the payment or other transfer of value.

iv. The dates on which the payment or other transfer of value was provided to
the covered recipient.

v. A description of the form of the payment or other transfer of value,

indicated as

(I) cash or a cash equivalent;

(II) in-kind items or services;

(III) stock, a stock option, or any other ownership interest, dividend, profit,
or other return on investment; or

(IV) any other form of payment or other transfer of value (as defined by the
Secretary).

vi. A description of the nature of the payment or other transfer of value,

indicated (as appropriate for all that apply) as

(I) consulting fees;

(II) compensation for services other than consulting;

(III) honoraria;

(IV) gift;

(V) entertainment;

(VI) food;

(VII) travel (including the specified destinations);

(VIII) education;

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 (IX) research;

(X) charitable contribution;

(XI) royalty or license;

(XII) current or prospective ownership or investment interest;

(XIII) compensation for serving as faculty or as a speaker for a continuing

medical education program;

(XIV) grant; or

(XV) any other nature of the payment or other transfer of value (as defined
by the Secretary).

vii. If the payment or other transfer of value is related to marketing, education,

or research specific to a covered drug, device, biological, or medical supply,
the name of that covered drug, device, biological, or medical supply

viii. Any other categories of information regarding the payment or other

transfer of value the Secretary determines appropriate”

Section 1128G(a)(2) goes on to say that also, on a yearly basis,

“… any applicable manufacturer or applicable group purchasing organization

shall submit to the Secretary, in such electronic form as the Secretary shall
require, the following information regarding any ownership or investment
interest (other than an ownership or investment interest in a publicly traded
security and mutual fund, as described in section 1877(c)) held by a physician
(or an immediate family member of such physician (as defined for purposes of
section 1877(a)) in the applicable manufacturer or applicable group purchasing
organization during the preceding year:

(A) The dollar amount invested by each physician holding such an ownership or
investment interest.

(B) The value and terms of each such ownership or investment interest.

(C) Any payment or other transfer of value provided to a physician holding

such an ownership or investment interest (or to an entity or individual at the
request of or designated on behalf of a physician holding such an ownership or
investment interest), including the information described in clauses (i) through
(viii) of paragraph (1)(A), except that in applying such clauses, ‘physician’ shall
be substituted for ‘covered recipient’ each place it appears.

(D) Any other information regarding the ownership or investment interest the
Secretary determines appropriate.”

Definitions
Compliance reporting is directly tied with clear definitions associated with some key
phrases that merit further consideration. Luckily, the legislation conveys some
semantics associated with some of these terms, which provide the starting point for

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review. In a few situations, these concepts are broader than one might anticipate,
while in some cases defined exclusions reduce the scope of what might be covered.
Some key phrases include:

 “Applicable manufacturer,” meaning a manufacturer of a covered drug,

device, biological or medical supply, which is operating in the United States
or one of its territories, possessions or commonwealths
 “Covered recipient,” defined as a physician or a teaching hospital
 “Payment or transfer of value,” which is (not surprisingly) a transfer of
anything of value
 “Applicable group purchasing organization,” which is an organization that
purchases, arranges for, or negotiates the purchase of a covered drug,
device, biological or medical supply, operating in the United States or one of
its territories, possessions or commonwealths
 “Physician (or an immediate family member of such physician),” which
includes a doctor of medicine or osteopathy, a doctor of dental surgery or
medicine, a doctor of podiatric medicine, a doctor of optometry or a
chiropractor

The definitions provided may be adequate for descriptive purposes, but do pose one
question: can a reporting organization rely on these definitions (for the different
entities and data concepts), as defined within the text, for isolation and
differentiation?

Reporting Requirements – Public Availability

Not only are applicable manufacturers and distributors required to provide reports,
the law specifies some criteria with respect to the way the data is made available
(presumably by the federal agencies involved) to the public. However, the need to
present the information as described imposes additional expectations for reporting.

Specifically, the information must be made available to the public through a website,
must be searchable, easily aggregated and downloaded, and contain the information
presented by:

 The name of the applicable manufacturer or group purchasing organization

 The name of the covered recipient
 The business address of the covered recipient
 The medical specialty of the covered recipient
 The value of the payment or transfer of value
 The date on which the payment or transfer of value was made to the covered
recipient
 The form of the payment or transfer of value
 The nature of the payment or transfer of value
 The name of the covered drug, device, or medical supply

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Clearly, this directive for public availability of the data is intended to help individuals
research the potential for pharmaceutical and distributor influence over health care
practitioners. The directive for public reporting suggests an even broader scope of
data to be managed, suggesting that a system of record containing information
about the covered recipients must be available to ensure accurate and complete
reporting.

Business Process, Data Capture, and Aggregation

Because of the nature of marketing practices, the very broad range of business
processes involved suggest some complexity when it comes to transparency
reporting, and the diversity of participants and documentation processes can lead to
questions associated with compliance. Clarification of what are “covered devices” is
necessary in determining whether an organization is an applicable manufacturer and
is obliged to report. Significant variations of data associated with physicians,
practices, health care organizations, etc., complicate the tracking of associations with
“covered recipients,” especially when there is a need for tracking ownership interests
associated with each physician’s “immediate family members.” And, as described in
the text, “transfer of value” is much broader than a cash payment. It essentially
covers any of a number of specific items provided by the manufacturer to the
covered recipient (including, among other items, consulting fees, compensation for
services other than consulting, honoraria, gifts, entertainment, food, travel,
education, research and charitable contributions). However, some items are explicitly
(and surprisingly) excluded, such as items of which the value is less than $10, product
samples and loans of covered devices for short-term periods.

Data Management Implications

At the highest level, the data management professional can clearly see that
externally-imposed business (in this case, compliance) policies are directly related to
correlated information management requirements. And, in turn, the existence of
these direct relationships should, to some extent, allay some anxiety with respect to
the feasibility of compliance. Through the identification and evaluation of some key
data management implications, an organization can combine the right tools,
techniques and data governance to efficiently engineer a reporting solution that best
fits their needs.

Data Completeness and Consistency

To properly comply with the law’s provisions, an applicable manufacturer must be
able to provide data documenting the transfer of value, along with associated details
that go beyond the specifics of the exchange. The manufacturer must be able to
provide that associated information about the recipient – such as business address
and specialty. The data provided must be consistent across all transactions
associated with each covered recipient. This is necessary to satisfy the public
reporting requirements so that the data can be searched and aggregated by the
variables indicated earlier in this paper.

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The implication is that the organization must institute data validations and controls to
ensure that, at the time that the transactions are logged, all the required data values
are present. In addition, these controls can be used to verify that the data values
observe validity and reasonability expectations. An additional implication is that the
organization must be able to be able to extract records from each of the source
systems and to consolidate records drawn from multiple data sets, suggesting a
need for data integration tools and techniques.

Semantics and Metadata

The wording of the legislation is particular about the concepts that must be reported.
However, the definitions provided within the text may or may not directly relate to
definitions for the same or similar concepts managed within each applicable
manufacturer. Essentially, it is up to each reporting organization to identify how those
definitions map to internally documented activities and parties

There are two data management implications associated with metadata. The first is
the need for an assessment of the types of parties that might be subject to this rule,
to qualify the internal definitions and ensure that the internal definitions can be
mapped to the definitions provided in the regulation. The second data management
implication is that the manufacturer must catalog which systems contain data
regarding relevant transactions and be able to standardize the data values in those
data sets into a format suitable for sharing. This implication suggests requirements
for metadata management and techniques for data standardization.

Ontologies and Hierarchies

The simplicity of the definitions also hides some complexity associated with the
ability for reporting, roll-ups, and ultimately, public transparency and accessibility.
Reporting information regarding ownership or investment interest is not limited to
physician, but also includes specific related parties. This implies a need by the
reporting organization to identify and track ownership and investment interests held
by physicians as well as their immediate family members, requiring identity resolution
and data householding.

The push for transparency is directly tied to the public availability of the data that can
be easily aggregated by a number of variables, particularly related to the
characteristics of physician payments and transfers of value as described in section
1128G(a)(1)(A). This introduces additional implications related to the need for
classifying (and thereby aggregating) the natures of payment or transfer of value as
well as the need for classifying (and thereby aggregating) the form of payment or
transfer of value. Correspondingly, this implies the ability to manage the master
reference data that defines those classifications and hierarchies.

Payments and Transfer of Value

Although section 1128G(a)(1)(A)(vii) describes the different nature of payments and
transfers of value, each of the categories listed might incorporate a wide variety of

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items. This suggests that the business processes for logging and tracking direct
physician marketing must be precise enough to capture the specific item provided to
the covered recipient. However, with a wide population of individuals operating in
different geographic regions, with varying names for similar items, there is a great
potential for variance in describing the transfer of value, even for identical items.

The implication for data management is that the reporting organization should use
master reference data to classify data values in preparation for subsequent
aggregation. This also means that there must be tools and techniques for scanning
and parsing those data values, which can be mapped using business rules to the
reference classifications.

Reporting
Applicable manufacturers and distributors are likely to be measured as compliant or
non-compliant in terms of their ability to observe the reporting requirement. This
ultimately is reflected not just as a series of transactions, but (as suggested by the
provisions for public access) must allow for aggregation and reporting of total
marketing “spend” to covered recipients by the different classes of transfer of value.

The data management implication is a requirement for a process for data extraction,
consolidation and normalization into a format suitable for searching and
aggregation.

Auditability
Not only must there be a process for collecting, managing and reporting payments
and transfers of value, those processes used for documentation and reporting
themselves must be auditable, for purposes of validation and protection against
claims of failure to knowingly report required information. The implication for data
management is the need for a governed level of maturity with respect to the
processes for reporting. The processes for extraction, consolidation and preparation
must be defined, documented and repeatable.

Information Management Best Practices for

Compliance
Fortunately, there are some commonalities across the data management implications
that can potentially reduce the complexity of reporting compliance for physician
transparency:

 Data assessment and semantic harmonization

 Metadata and master reference data management
 Parsing, standardization and identity resolution tools and techniques
 Data integration
 Data governance

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Data Assessment and Semantic Harmonization
Processes for determining which business terms and corresponding data element
definitions represent data values subject to reporting employ data assessment
techniques such as data profiling combined with a top-down evaluation of existing
business concepts and metadata. Scanning the data sources and reviewing the
results of a bottom-up statistical evaluation with business subject matter experts
provide the fundamental approach for semantic harmonization.

Metadata and Master Data Management

One result of a data assessment is the identification of reference data entities that
can be isolated for resolution. These master data concepts are particularly valuable,
especially when it comes to classification and aggregation. Master data management
techniques are data management best practices that can be employed to assist in
tracking critical information:

 Reference data associated with the different types of payments

 Recipient data associated with the physicians and teaching hospitals
 Product data associated with the covered drugs, devices, biological, or
medical supplies
 Clinical trial data associated with investigations and trials

Master reference data management techniques also help manage associated

hierarchies and classifications, associated consolidation rules (such as those used for
resolving geographic scope for organizations or for managing corporate parent
structure) and relationship discovery and management to provide the ability to work
with data about individuals and organizations in same repository. Existing identifying
attributes can be used to help in the management and resolution of unique
representations of master data concepts. For example, the law stipulates the use of
the National Provider Identifier as information that needs to be reported. In turn, the
business terms, data element definitions, master reference concept definitions,
master reference tables and usage mappings can all be centrally managed within a
metadata facility.

Parsing, Standardization and Identity Resolution

The variety of systems used for tracking the transactions subject to transparency
reporting, as well as the variety of ways that each individual entity may be
represented, poses data quality challenges for resolving uniqueness among
recipients, products, payment classifications and organizational or family hierarchies.
We have identified a need for determining whether the item provided to the covered
recipient is one that must be reported, as well as the details regarding the nature of
the transfer of value. Data value classification employs parsing and standardization
along with business rules to normalize data values and map them to the master
reference classification values.

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There is also a need to mitigate the risk of false positive matches and false negative
misses. Costly manual review and scrubbing is neither effective nor sufficient,
suggesting the need for identity resolution tools and techniques. Identity resolution
incorporates data management best practices that can help flag data errors due to
flawed record matching/merging, incomplete internal data entry and inaccurate
third-party submissions. In turn, effective identity resolution tools and techniques will
enhance the ability to recognize relationships across the data sets and lead to
greater trust in the reported data.

Data Integration
This is pure and simple: the fact that the data is likely to be sourced from multiple
data sets means that compliance will depend heavily on the ability to extract data
from those sources and integrate the extracted data into the target framework for
data exchange.

Data and Policy Governance

Data quality assessments using data profiling tools and techniques will help in
identifying possible data rules that lead to mitigating the potential risks in accurate
reporting. These rules can be integrated directly into the information production flow
so that potential errors are flagged as early as possible within the business process,
and the appropriate data stewards can be notified. By instituting a best practice such
as operational data governance implemented using data controls, the reporting
organization can provide data auditing and monitoring, perform data validation, as
well as targeting potential data outliers to reduce the risk of not properly complying
with the law.

Ancillary Benefits
When considering the data management implications associated with supporting
compliance with the transparency reporting directives, the effort is primarily centered
upon establishing a set of data quality and data management best practices. But as
an added bonus, the institutionalization of these best practices can provide multiple
additional benefits to the organization.

Spend Analysis and Management

By collecting the data associated with the different types of transactions representing
a transfer of value, the applicable manufacturer will be able to determine total spend,
over time, for each covered recipient across all payment systems that exist within the
organization. This may include accounts payable, grants, reimbursements, education
resource management, legal and compliance. The number of internal payment
systems is limited only by the defined natures of transfers of value. Other examples
of spend data capture may include: payable-to vs. recipient for grants, coverage of
expenses for invitees to conventions or healthcare events, and even the cost of light
snacks provided by sales associates.

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A best practice for enabling the collection of this information involves the
institutionalization of a spend analysis program. This will also require the definition
and management of business rules for spend analysis relating to definitions of health
care provider organizations, physician types and specialties, as well as
methodologies for allocating costs associated with the different value transfer
activities. In addition, the organization must ensure that they have the proper tools
and capabilities supporting spend analysis, especially with respect to data
warehousing and data organization, along with data classification tools and
techniques. Supporting the reporting requirements also benefits the organization
that can use the same classification and aggregation techniques to help analyze
aggregate spending. This, in turn, can lead to identification of opportunities for cost
reductions, enable better negotiations with suppliers, and oversee organizational
practices for procurement in an auditable way.

Physician Data Insight

The ability to analyze physician data for the purpose of identity resolution creates the
opportunity for establishing a unified view of physician data for alternate purposes.
The benefits of improved physician insight include compliance with other
regulations, more efficient grant management, as well as more effective allocation of
marketing budgets. Identifying organizational entity links among sets of physicians
enables better visibility into their relationships, and correspondingly, their own
spheres of knowledge and influence.

Data Management for Physician Transparency: Next

Steps
Despite the perception of complexity posed by the reporting requirements of the
physician payment transparency provisions included in the Patient Protection and
Affordable Care Act of 2009, rational next steps can be taken to establish the data
management fundamentals for compliance. By ensuring a level of competency for
data assessment, metadata management and data quality techniques, an
organization can be assured that its data integration, consolidation and data
governance facilities will be sufficient to support reporting compliance. Lastly, these
data governance abilities will enable a deeper level of physician data insight that can
be harnessed to provide many related benefits.

To learn more about data governance, visit:

dataflux.com/knowledgecenter/dg

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