Public can see pharma payments to doctors starting in 2014

Revisions in the final transparency rule will give physicians more time to resolve payment amounts and won't require disclosure of indirect pay from accredited education programs.

By Charles Fiegl amednews staff — Posted Feb. 11, 2013

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After numerous missed deadlines, new regulations require that data on the payments and gifts that drug and medical device companies make to physicians will become available publicly in a searchable database beginning in September 2014.

The long-awaited final rule for the implementation of the Physician Payment Sunshine Act — a 2010 law requiring financial ties between manufacturers and medicine to be disclosed — was released on Feb. 1. The Centers for Medicare & Medicaid Services addressed several issues pertaining to the reporting of fees, meals, travel expenses and other transfers of value. Those issues were raised by the American Medical Association and other organized medicine groups over an earlier proposed version of the rule. For instance, CMS will allow doctors additional time to resolve disputes over any inaccurate data and will not require certain indirect payments from continued medical education programs to be reported on the database.

Under the law, manufacturers already should have started collecting information about the payments and gifts they make to physicians. The Affordable Care Act mandated that data collection for transparency reports was to start in 2012, but the Obama administration delayed finalizing regulations for more than a year as stakeholders debated aspects of the program.

Data collection now will begin on Aug. 1 for applicable manufacturers. Companies will be required to collect data from August through December during the first year, 2013. The data will be sent to CMS by March 31, 2014, and become available to the public on Sept. 30, 2014.

Manufacturers are not required to track buffet meals, snacks or cups of coffee they provide to physicians, but the value of other meals must be recorded. Transfers of value under $10 also do not need to be reported unless the cumulative amount to an individual doctor totals $100 or more in a calendar year.

Fines up to $100,000 possible

CMS can levy $10,000 fines on manufacturers for failing to report gifts. The penalty climbs to $100,000 when a manufacturer is found to have knowingly omitted payment information.

“You should know when your doctor has a financial relationship with the companies that manufacture or supply the medicines or medical devices you may need,” said Peter Budetti, MD, CMS deputy administrator for program integrity. “Disclosure of these relationships allows patients to have more informed discussions with their doctors.”

The AMA supported the concept of the Sunshine Act and will review the final regulation carefully to determine if its earlier concerns about the details of the program have been addressed, said AMA President Jeremy A. Lazarus, MD.

“Physicians' relationships with the pharmaceutical industry should be transparent and focused on benefits to patients,” Dr. Lazarus said. “Our feedback during this rulemaking process was aimed at ensuring the new registry will provide a meaningful picture of physician-industry interactions and give physicians an easy way to correct any inaccuracies. As the rule is implemented, we will work to make sure physicians have up-to-date information about the new reporting process.”

Organized medicine groups, manufacturers and CMS will need to increase efforts to educate physicians about the details of the Sunshine Act, said Michaeline Daboul, president and CEO of MMIS, a health technology company that develops health information exchanges. An MMIS survey of 1,000 physicians found that about half were not aware of the transparency report program. Many also were concerned about the accuracy of data gathered by companies. The survey said 43% of respondents indicated that the program would affect their relationships with drug and device firms.

Daboul suggested that physicians work directly with the companies to see their financial relationship data before the information is sent to the government. Doctors and companies need to be proactive and prepared to work together to prevent any misinformation from making its way into the public database, she said.

“If I'm a physician, I want to protect my reputation,” she said. “I want my patients to understand my relationships with industry.”

Concessions in the final rule

In the draft version of the rule, CMS had proposed a 45-day period in which physicians could review and correct their individual payment and gift data compiled by drug and device companies. The AMA had recommended that data be corrected on an ongoing basis. Other commenters called for an additional 60 to 90 days to resolve disputes after the 45-day review period.

Extended or rolling periods to address objections raised by physicians are not feasible, CMS stated in the final rule. However, the agency did agree that a distinct period should be available in which to resolve incorrect data after the 45-day window. Manufacturers and other organizations will have 15 days to correct any erroneous information following the review period, CMS said. The agency is developing a secure website for data submission, review and correction.

Organized medicine groups and others also had recommended that accredited or certified continuing medical education payments to speakers should not be reported on the database. Existing safeguards and standards regarding such compensation are in place, the groups said, and public reporting of payments or transfers of value related to educational activities would harm such programs. That reporting would lead to decreased funding for education and a falloff in attendance, they said. Furthermore, Congress did not intend for those payments to be included in transparency reports.

CMS agreed that an indirect payment made by a drug or device company to a speaker at a continuing education program does not need to be reported under certain conditions. First, the program must meet accreditation or certification standards of the AMA, the American Osteopathic Assn., the American Academy of Family Physicians, the Accreditation Council for Continuing Medical Education or the American Dental Assn. Continuing Education Recognition Program. The manufacturer cannot select the speaker or provide a third-party vendor with a list of experts for consideration to speak. Finally, the manufacturer must not pay the speaker directly.

“We believe that when applicable manufacturers suggest speakers, they are directing or targeting their funding to the speakers, so these payments will be considered indirect payments for purposes of this rule,” CMS stated. “Conversely, when they do not suggest speakers, they are allowing the continuing education provider full discretion over the [education] programming, so the payment or other transfer of value will not be considered an indirect payment for purposes of these reporting requirements.”

Murray Kopelow, MD, president and CEO of the Accreditation Council for Continuing Medical Education, applauded CMS for recognizing the value of continuing education and for agreeing that current accrediting standards are sufficient. “The standards are designed to ensure that accredited CME activities are independent, free of commercial bias, based on valid content, and contribute to health care improvement,” he said.

Unaccredited and noncertified education program payments must be reported, CMS added.

Rule stands firm in some areas

CMS disagreed with arguments that all indirect payments or other indirect transfers of value should be excluded from reporting requirements. This type of transaction occurs when a manufacturer requires, instructs or directs payment to a particular recipient regardless of whether the company specified that physician.

For example, a drug manufacturer might make a general payment to a clinic for a physician to review materials without stating the name of the physician. Because the company had directed the payment to be provided to a physician, it would be a reportable indirect payment under the final rule.

Indirect payments can be excluded from reporting requirements when manufacturers do not know the identity of the recipient. This may occur, for example, when a device manufacturer hires a research firm to conduct a double-blind market research study that pays physicians to respond to a survey.

If the exception did not apply in such a case, a manufacturer might feel obligated to track down the identity of the recipients, the rule stated. CMS' intention is to prevent companies from directing payments to recipients whose identities can be obtained easily.

“We agree that applicable manufacturers should not be responsible for tracking and reporting indirect payments or other transfers of value indefinitely,” CMS said. At the same time, if a company determines the identity of a recipient, it is obligated to report it. Recipients discovered on or before June 30 of the year after a payment made by a third party are required to be reported on the database.

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How much will sunshine reviews cost practices?

Estimates indicate that less than half of physicians, or about 449,000, have financial relationships with pharmaceutical or device manufacturers that will need to be reported publicly under the Sunshine Act. The Centers for Medicare & Medicaid Services projects that half of those physicians and their staffs actually will review their reports compiled by the companies before publication of the first year of data — causing a total administrative burden to doctors valued at roughly $59 million.

Type of reviewer Number reviewing Hours of review Average cost Total cost
Physician 224,425 1 $137 $30.7 million
Physician staff 224,425 5 $109 $24.4 million
Teaching hospital compliance officer 1,100 40 $1,752 $1.9 million
Teaching hospital staff 1,100 80 $1,726 $1.9 million

Source: “Medicare, Medicaid, Children's Health Insurance Programs: Transparency Reports and Reporting of Physician Ownership or Investment Interests,” Federal Register, Feb. 8 (link)

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