The Sunshine Act kicks in August 1, 2013. That day, device and pharmaceutical companies begin collecting data about payments to physicians and teaching hospitals. Public reporting will begin in 2014 under the National Physician Payment Transparency Program (NPPTP) for the Centers for Medicare and Medicaid Services (CMS).
Are you ready? If you’re a manufacturer, do you know what you’re supposed to track and how to submit the data? If you’re physician, do you understand what is being tracked and reported and how you can be sure companies are reporting accurately?
The law covers meals, honoraria, travel expenses, and grants. It also requires disclosure of physician ownership in companies and investment interests in group purchasing organizations (GPOs).
Physician/Industry Relationship
Physicians have significant relationships with industry. A 2007 study noted in a May 2013 article in the New England Journal of Medicine by Shantanu Agrawal, M.D., Niall Brennan, M.P.P., and Peter Budetti, M.D., J.D., said that 94% of U.S. physicians have such a relationship, with 83% receiving gifts, and 28% receiving payments for professional services such as consulting or research participation. Sixty percent of physicians with industry relationships were involved in medical education, and 40% developing clinical practice guidelines.
Industry accounts for up to 60% of the $100 billion spent annually on research and development of new drugs and devices. Industry also pays for more than a third of all continuing medical education (CME), according to the article.
Previous Disclosure Efforts
The payment disclosure requirements, part of the Affordable Care Act, aka Obamacare, come on the heels of previous efforts to increase disclosure of physician industry relationships. In 2009, the Institute of Medicine (IOM) developed recommendations to manage conflicts of interest without affecting constructive collaboration. The Medicare Payment Advisory Commission (MedPAC) has proposed a national reporting program. Medical and industry groups such as the American Medical Association, the American Academy of Orthopaedic Surgeons and AdvaMed (the Advanced Medical Technology Association) have developed voluntary codes of ethics to manage physician-industry relationships.
Various states, including Maine, Massachusetts, Minnesota and Vermont, set up their own public disclosure requirements. Various companies are also required to publicly disclose payments as a result of Corporate Integrity Agreements (CIAs) or as part of the settlement between the major orthopedic companies and former U.S. Attorney Christopher Christie. Most of those disclosures stopped as the agreements and settlements were concluded.
Reporter and Payment Requirements
“Applicable manufacturers” including foreign companies must report payments to teaching hospitals and physicians, including all doctors of medicine, osteopathy, dentistry, podiatry, optometry, and chiropractic medicine.
Payments or transfers of value worth at least $10, and transactions of less than $10 if they total $100 or more in a given calendar year, must be reported. The range of items that must be reported includes cash or a cash equivalent, in-kind items or services, stock, consulting fees, compensation for services other than consulting, honoraria, gifts, entertainment, food, travel (including the destination), education, research, charitable contributions, royalties or licenses, current or prospective ownership or investment interest, speaker compensation for CME events, and grants.
Data collection and reporting requirements fall on those making the payments, not those receiving them.
Protecting Secrets, Education and Research
Industry sources have expressed concerns that disclosure of payments to surgeons working with them to develop new products will give away proprietary information to competitors. They’ve also noted the Kafka-esque requirement that they collect their own evidence which could be used by the Department of Justice (DOJ) to target highly compensated physicians for investigation.
To address the competitive proprietary information concern, payments related to products in development before regulatory approval will not be published for four years or until FDA approval has been granted. Reporting of CME-related payments is restricted to cases in which the manufacturer had direct influence over the choice of speaker.
Regarding research payments in the development of devices, a separate reporting stream for research payments will clarify for consumers that a principal investigator directing a $5 million research grant from a manufacturer is not accruing all $5 million for his or her personal use.
Physician Concerns
But physicians are concerned that reporting may lead to misleading conclusions.
Data collected from August through December 2013 will be publicly available by September 30, 2014. Subsequent reporting will be for each calendar year. Physicians will have 45 days to review and dispute any data that appear inaccurate, and manufacturers and GPOs will then be able to make necessary corrections. The data will be released online in an easily searchable form and will contain contextual information on the many appropriate reasons for which physicians and teaching hospitals maintain relationships with drug and device manufacturers.
Physician Check List
Source: epconlane.com/checklist
To ensure that payments are being reported accurately by companies, physicians should:
Track their own payments from industry
Clarify with industry representatives what will be reported
Provide companies with identifying information such as their National Provider Identifier (NPI), state licensure information, business address, and specialty
Inquire about the source of payments they receive, since transfers of value can occur indirectly—through specialty societies, for example—when funding originates with manufacturers
Participate in the prepublication review-and-dispute period to validate reported data and identify potential inaccuracies
Updating NPI information or obtaining an NPI through the National Plan and Provider Enumeration System (https://npiregistry.cms.hhs.gov) is critical.
Physicians can also supply information to manufacturers and encourage its reporting to provide the appropriate context for research funding, grants, or other payments; manufacturers may not possess this information otherwise. In particular, physician groups may want to explain how payments were obtained and divided equitably among members.
Disclosure, Kickback Statute and False Claims Act
What is the relationship between Open Payments and the Federal Anti-Kickback Statute, False Claims Act or similar legislation?
According to CMS, compliance with reporting requirements does not exempt anyone from any potential liability associated with payments or other transfers of value, or ownership or investment interests under the Federal Anti-Kickback statute, False Claims Act or similar laws. As noted in the preamble of the rule, however, the inclusion of a payment or other transfer of value or ownership or investment interest in Open Payments is not, by itself, an indicator of wrongdoing or illegal conduct.
In a recent Financial Times article, an official from HHS-OIG (U.S. Department of Health and Human Services-Office of Inspector General) noted that either DOJ or OIG could flag certain payments that raise concerns about possible kickbacks or other fraud violations. Either agency can take the lead in pursuing suspected violations of the Anti-kickback Statute. “As far as whether payments will be viewed as kickbacks, that is evidently a possibility,” said the official.
Lewis Morris/Adelman, Sheff & Smith, LLC
Information posted to the CMS site would not be sufficient in and of itself to bring any kind of legal case, according to the official, but the data could be cause for further investigation. It is “certainly fair to assume that DOJ and the OIG will be taking a look” at the information, noted Andrew Van Haute, AdvaMed’s associate counsel. However, he added, the sheer act of disclosure does not mean investigations are warranted.
Lew Morris, the OIG’s former chief counsel said in the article that manufacturers and healthcare providers could face multiple sources of scrutiny. The published data will likely be of interest to “whistleblowers and investigative reporters and law enforcement,” among other groups, he said.
This attention could be unjustified for those “outliers that really aren’t outliers and are just a matter of information being put into the wrong category,” added Morris, now an attorney at Adelman, Sheff & Smith, LLC.
Morris also said there is broad understanding that Sunshine implementation will involve some complications. Based on his conversations with the DOJ and the OIG, he said it is unlikely that enforcers “are going to be handing out traffic tickets the first day that the rule goes into effect.”
CME Reporting Requirements
Are payments provided as compensation to speakers at CME events run by CME providers reportable?
Yes, according to CMS, unless the CME event is run by CME providers that are accredited or certified by one of the accreditation or certification entities identified in the law. Payments to speakers at CME events that are not run by identified CME providers are reportable payments or other transfers of value for Open Payments. The agency said it will consider modifications to this provision in possible future rulemaking.
The five accrediting/certifying bodies include:
The Accreditation Council for Continuing Medical Education (“ACCME”)
The American Academy of Family Physicians (“AAFP”)
The American Dental Association’s Continuing Education Recognition Program (“ADA CERP”)
The American Medical Association (“AMA”)
The American Osteopathic Association (“AOA”)
Payments provided to speakers, faculty, and physician attendees for travel, lodging and meals at CME programs that are not accredited by one of the five bodies are also reportable, and must be reported separately. Educational value and materials provided to physician-attendees, such as a journal reprint, would also be reportable for programs not accredited by the five bodies. CMS recommends that “[t]he value of a journal reprint should reflect the cost that an applicable manufacturer…paid to acquire the reprint from the publisher or other distributor.”
Learning Disincentive?
According to the publication, Policy and Medicine, this strict interpretation by CMS may limit the participation of physicians in allied health educational programs supported by manufacturers. It also ignores the accreditation systems which have adopted similar standards as the ACCME for optometrists, podiatrists and chiropractors.
“These doctors will have all their faculty payments for accredited education listed as ‘payments for serving in a non-accredited medical education program’, ‘honorarium’, ‘services other than consulting’, ‘grant’ or ‘charitable donation’,” according to the publication.
It’s a new era for disclosing the financial relationships between companies and physicians. It will undoubtedly take a long time to work out the kinks and grasp the significance of the unintended consequences of new disclosures.
A Great Resource
CMS offers a pretty helpful website where the agency provides answers to frequently asked questions. Click here to go to the site.