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The Sunshine Act will go into effect soon. Here's what you need to know to keep on the right side.
Having a financial relationship with a manufacturer does not necessarily mean that you or your treatment decisions are influenced by that relationship. As a matter of public perception, however, it is important for you to understand the new Physician Payment Sunshine Act so you can determine what relationships to have with manufacturers and group purchasing organizations going forward.
Congress passed the act as part of the Affordable Care Act to shed light on financial relationships between drug and medical device manufacturers and doctors with the goal of enabling patients to make better and informed decisions when choosing healthcare professionals and deciding about treatments. The law also is meant to deter inappropriate financial relationships that might lead to increased healthcare costs.
Beginning August 1, applicable manufacturers of pharmaceuticals, biologics, and medical devices must collect and track data regarding payments and other transfers of value they make to physicians and teaching hospitals. They must electronically submit such data to CMS by March 31, 2014. Affected manufacturers and group purchasing organizations (GPOs) also will be required to report certain physician ownership or investment interests. CMS will post the reported information on its Web site by September 30, 2014.
Before then, you will want to familiarize yourself with the act. Here are the answers to some questions you might have.
WHAT IS THE RULE ?
Briefly, the rule specifies that if you have a financial relationship with, or an ownership interest or investment interest in, an applicable manufacturer, or if you have an ownership interest or investment interest in a GPO, then the entity is required to collect and report certain information about you and your relationship with it. Similar ownership interests held by an immediate family member of a physician (spouse; parent; child; sibling; stepparent; stepchild; stepsibling; father-, mother-, daughter-, son-, brother-, or sister-in-law; grandparent; or grandchild) also must be reported.
The rule defines “physician” as a doctor of medicine or osteopathy, a dentist, a podiatrist, an optometrist, or a chiropractor who is legally authorized to practice by the state in which he or she works. Advance practice nurses, registered nurses, physician assistants, residents, and pharmacists are not covered recipients, but payments made to non-physician prescribers to be passed through to a doctor are considered indirect payments to the physician and, therefore, would have to be reported under the name of the doctor.
The manufacturers and GPOs must report annually all ownership and investment interests in their entities that were held by a doctor or an immediate family member of a physician.
WHO HAS TO REPORT?
The final rule defines affected manufacturer, covered drug, device, biological, or medical supply, and payment or transfer of value. Generally, a manufacturer is required to report information if its prescription drugs, biologics, devices, or medical supplies require premarket approval/clearance or notification to the Food and Drug Administration and if payment is available for them under Medicare, Medicaid, or the Children’s Health Insurance Program.
Generally, GPOs that operate in the United States and purchase, arrange for, or negotiate the purchase of covered drugs, devices, biologicals, or medical supplies for a group of individuals or entities also are required to report.
WHAT WILL BE REPORTED ABOUT PHYSICIANS?
Manufacturers must report the following physician information for payments or transfers of value made to doctors:
Manufacturers and GPOs also must report the following physician-related information for ownership interests:
Dividends or other profit distribution from, or ownership or investment interest in, a publicly traded security or mutual fund do not have to be reported.
WHAT IF I WAIVE PAYMENT AND HAVE THE MANUFACTURER DONATE TO CHARITY?
The final rule requires that when a physician does not receive a payment or other transfer of value, but the applicable manufacturer provides the payment or other transfer of value to another entity “in the name of” or “on behalf” of the physician, this is still considered to be a payment made to the physician. Thus, to avoid reporting, you must make very clear to manufacturers that you are waiving the payment and that any payment should be made to another entity or individual, not in your name or on behalf of you.
WHAT CAN I ACCEPT FROM A MANUFACTURER WITHOUT BEING REPORTED?
Some exceptions to reporting requirements in the final rule:
ARE THERE PHYSICIAN PENALTIES FOR NON-COMPLIANCE?
Although the Sunshine Act authorizes civil monetary penalties for applicable manufacturers for failure to report required information on a timely basis in accordance with the final rule, as well as for knowing failures, up to a combined maximum annual total of $1.15 million, there is no reporting requirement of physicians and thus, no penalty to physicians, for the manufacturer’s or GPO’s noncompliance.
WHAT SHOULD BE I DOING NOW?
So now that the Sunshine Act is law, be sure to take these steps to protect yourself and your practice:
The author is a partner in the healthcare department of Ungaretti & Harris, with offices in Chicago and Springfield, Illinois, as well as Washington, DC.
Final rule versus proposed rule
By Lois A. Bowers, MA
The Centers for Medicare and Medicaid Services says the final rule differs from the proposed rule in the following ways, based on feedback the agency receiving during the comment period:
Source: Centers for Medicare and Medicaid Services
By Lois A. Bowers, MA
Additional insights from attorneys on steps you can take now that the Physician Payment Sunshine Act has been finalized:
Mark Dahlby, JD, of Hall, Render, Killian, Heath, and Lyman: During contract negotiations with manufacturers and group purchasing organizations (GPOs), discuss how information about you will be used so that you know what you need to monitor. Also, don’t just rely on them to keep records; keep track of your own information so you have something to compare with their records. Doing so will aid the appeal process if one is necessary.
Joshua Freemire, JD, of Ober Kaler: Stay informed by reading professional publications such as Medical Economics and newsletters from law firms and other entities, and periodically perform an Internet search so you know what information is out there about you.
Joe Wolfe, JD, of Hall, Render, Killian, Heath, and Lyman: Determine whether the rule applies to any entity with which you have a relationship. (Contact the manufacturer/GPO and/or your attorney.) “Keep in touch with vendors, or at least realize that they are now operating in a new world of transparency.”