Open Payments and HCP Transparency Reporting: What Marketers Should Know
Open Payments requires drug makers to report value given to physicians and certain clinicians. What HCP and HCO transparency reporting means for marketers.
The short answer
CMS Open Payments requires applicable drug and device manufacturers to report payments and other transfers of value to physicians, certain other clinicians, and teaching hospitals. Paid media bought from publishers is generally not reportable because the payment goes to the publisher, not to an HCP. Speaker fees, meals at programs, consulting, travel, and fees paid to clinicians for sponsored content usually are. Most companies track this in an HCP and HCO transparency hub that pulls spend from many systems into one reporting process.
Media and brand teams often treat Open Payments as someone else's problem. It mostly is, until a tactic creates a reportable record that nobody captured. A peer-to-peer video with a paid clinician, a dinner program promoted through email, a sponsored newsletter written by a physician: each sits on the line between media and HCP spend. This article explains the program in plain terms and shows where marketing activity touches it. It is part of the HCP engagement series. It is not legal advice, and your compliance team decides how specific arrangements are reported.
What Open Payments is
Open Payments was created by Section 6002 of the Affordable Care Act, commonly called the Physician Payments Sunshine Act. CMS runs it under regulations at 42 CFR Part 403, Subpart I. Applicable manufacturers (companies that make a covered drug, device, biological, or medical supply) and applicable group purchasing organizations must report payments and other transfers of value to covered recipients, and certain ownership and investment interests held by physicians.
Covered recipients include physicians (doctors of medicine and osteopathy, dentists, podiatrists, optometrists, and chiropractors) and teaching hospitals. Starting with data collected in 2021, the definition expanded to include physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, anesthesiologist assistants, and certified nurse-midwives. Residents are generally not covered recipients. Definitions change, so check the CMS pages before relying on this list.
The cycle is annual. Companies collect data for a calendar year, submit it to CMS early the following year, covered recipients get a window to review and dispute their records, and CMS publishes the data, typically by mid-year. Exact dates are on the CMS site.
What counts as a transfer of value
CMS defines categories (called nature of payment) that include consulting fees, compensation for services such as speaking, honoraria, gifts, entertainment, food and beverage, travel and lodging, education, research, charitable contributions, royalties or licenses, grants, and ownership interests, among others. A few exclusions matter to marketers:
- Items below a small-dollar threshold, unless the annual total to that recipient crosses the aggregate threshold. Both are adjusted each year; CMS publishes the current figures.
- Product samples not intended for sale.
- Educational materials intended for patients or that directly benefit patients.
- Discounts and rebates.
- Indirect payments through a third party where the manufacturer does not know the identity of the covered recipient. This is why blinded market research honoraria are often excluded.
- Certain payments related to accredited continuing education, when the manufacturer does not select or pay speakers directly. The conditions are specific, so check them.
Why paid media is generally not reportable, and when it can be
| Marketing activity | Generally reportable? | Why |
|---|---|---|
| Programmatic or endemic display bought from a publisher | No | Payment goes to the publisher or platform, not a covered recipient |
| Point-of-care messaging bought from a vendor | Usually no | Payment to vendor; check if any value reaches practices or clinicians |
| Speaker program honorarium | Yes | Compensation to a covered recipient |
| Meal at a speaker program or rep lunch | Yes, per attendee | Food and beverage provided to covered recipients |
| Fee to a clinician to author or appear in sponsored content | Usually yes | Compensation to an identified covered recipient, directly or through a vendor that passes it on |
| Advisory board fees and travel | Yes | Consulting fee, travel and lodging |
| Blinded HCP market research honorarium | Often no | Indirect payment where manufacturer does not know recipient identity |
The tricky cases involve vendors. If an agency or publisher pays a physician on your behalf to create content, and your company directs or knows who that physician is, the payment may be an indirect transfer of value attributed to you. The contract with the vendor should require them to report recipient identities and amounts back to you. The KOL engagement and digital media article covers how this arises with peer content and digital opinion leaders.
How marketing ops tracks HCP and HCO spend
Large manufacturers usually run an aggregate spend or transparency reporting system, sometimes called a transparency hub. Several software and services firms offer these, and some companies build their own. The pattern is similar:
- Capture: spend is recorded in source systems: rep expense reports, speaker bureau and event platforms, consulting contracts, grants, and vendor invoices.
- Identify: each recipient is matched to a master record, usually keyed on NPI for individuals and on CMS identifiers for teaching hospitals. NPPES is the standard check for NPI validity.
- Classify: each transaction gets a nature of payment, a related product, and a form of payment.
- Allocate: shared costs, such as a meal for eight attendees, are split per recipient according to CMS rules and company methodology.
- Review: compliance reviews outliers and disputes before submission.
- Report: the system produces the federal file plus state reports and, for global companies, ex-US disclosures.
"HCO" in this context refers to healthcare organizations. Federally, teaching hospitals are the main covered HCO, but some state laws and company policies track payments to other organizations too, and several states (for example Vermont, Massachusetts, and Minnesota) have their own gift or disclosure rules. Requirements change, so rely on current guidance.
What media and brand teams should do
- Flag any tactic that pays a clinician, directly or through a vendor, at the brief stage. Do not wait for the invoice.
- Include transparency reporting clauses in agency and publisher contracts where clinicians may be paid. The agency compliance capabilities article lists what to require.
- Keep speaker program promotion within invitee rules. The 2020 OIG Special Fraud Alert on speaker programs is required reading for anyone promoting them.
- Remember that published Open Payments data is public. HCPs, journalists, and competitors can see what your company paid whom.
For the wider compliance picture, see the pharma marketing compliance guide for media teams.
Practical takeaway
Go through your current HCP media plan line by line and mark every tactic where any money could reach an identifiable clinician, including through a publisher or agency. For each marked line, confirm with compliance who captures the payment data and how it reaches your transparency system. If no one can answer, fix that before the line goes live.
Frequently asked questions
What is CMS Open Payments?
Open Payments is the federal transparency program, created by the Affordable Care Act provision often called the Physician Payments Sunshine Act, that requires applicable drug and device manufacturers and group purchasing organizations to report payments and other transfers of value to covered recipients. CMS publishes the data annually.
Is paid media reportable under Open Payments?
Generally no. Buying ad space from a publisher or platform is a payment to that company, not to a covered recipient. It can become reportable when value flows to an identifiable physician or other covered clinician, such as a fee for authoring sponsored content. Confirm specific cases with compliance.
Who counts as a covered recipient?
Physicians (including doctors of medicine and osteopathy, dentists, podiatrists, optometrists, and chiropractors), teaching hospitals, and since the 2021 data year certain non-physician practitioners such as physician assistants and nurse practitioners. Check the CMS site for the current definitions.
What is an HCP HCO transparency hub?
It is an internal system, often called aggregate spend or transparency reporting software, that collects spend on HCPs and healthcare organizations from expense, event, and vendor systems, validates recipient identity, and produces federal, state, and sometimes international disclosure reports.
Sources
- CMS, Open Payments
- CMS, Open Payments Reporting Entities
- eCFR, 42 CFR Part 403 Subpart I: Transparency Reports and Reporting of Physician Ownership or Investment Interests
- HHS OIG, Special Fraud Alert: Speaker Programs
- PhRMA, Code on Interactions With Health Care Professionals
External guidance and platform documentation change. Links were current at publication; check them again before relying on them for a decision.
Editorial note. Analysis and frameworks are the author's own and do not represent Acxiom or any current or former employer, client, or named platform. Examples labeled hypothetical or illustrative are not results from real campaigns. Nothing here is legal, regulatory, or medical advice.
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