Home – Medical Community Anxiously Awaits Final Rule on Sunshine Act

Medical Community Anxiously Awaits Final Rule on Sunshine Act

Medical Community Anxiously Awaits Final Rule on Sunshine Act

Many physicians, health–care organizations, and pharmaceutical and medical device manufacturers anxiously await a final rule from the Centers for Medicaid and Medicare Services (CMS) on the Physician Payments Sunshine Act (Sunshine Act) to see whether it will affect the looming Jan. 1, 2013 deadline for reporting under the Act, said Ralph F. Hall, Esq. of Faegre Baker Daniels LLP.

Hall, who was a speaker during a LexisNexis® Webinar entitled “The Sunshine Act—Best Practices for Industry Compliance and the Pathway to Improved Patient Care,” said that the timing of when the final rule is to be issued is more than likely being affected by the current election.

“Will OMB [Office of Management and Budget], for example, want to give this rule out before the election as an accomplishment? Or will they be afraid of political backlash depending on the context of the rules?” said Hall.

“We are now in the waiting game, predicting when the rule will get through CMS and the OMB process,” he said.

He said that the final rule would address a number of questions about the Act, which will require disclosure of payments or “transfers of value” from pharmaceutical and medical device companies to physicians, ostensibly in exchange for use of their products.

“There are some interesting questions about what is an applicable manufacturer. The draft rule addressed that aspect in particular when you get into sale or distribution activity. It’s important to note that an actual sale may not be required to create an applicable manufacturer. Distribution may well be sufficient to pull within the umbrella of this rule,” said Hall.

The final rule is also expected to address how a Group Purchasing Organization (GPO) is defined, whether the rule applies to physician-owned entities, and how “bundling” of products and composite payments will be handled.

“When you think about allocation challenges under the proposed rule, you have allocation challenges among recipients—20 people at a meeting where there was food, for example. You also have potential allocation problems and challenges when you have multiple products that are either part of the program, or part of the sale or distribution to the covered entity. So these types of issues are things that we are hoping for clarity out of CMS when the final rule comes in,” Hall said.

Teaching hospitals also present some challenges because the government provides indirect payments to them to support medical education. “And that may pull some or all teaching hospitals within the overall coverage of the final rule. So one of the things to watch for when the final rule does come out is how the teaching hospital challenge is covered,” said Hall.

“It is these more indirect interactions, both on who is paying and who is providing, that add substantially to the complexity that is all being debated within the final rule,” he said.

Saul B. Helman, MD, of Navigant, also speaking at the Webinar, said that the bill may have some unintended consequences on the medical profession.

“The fact that physicians and teaching hospitals are going to have their names on public websites with associated transfers of value may make them think twice about the nature of the relationships they have with manufacturers,” he said.

“The impact of having this public disclosure could limit or eliminate some important relationships. There may be some physicians who do not want to have any reporting about themselves with regard to transfers of value and they may exclude themselves from these opportunities,” he said.

He also said that there is the possibility of misinterpretation of data, especially from allocation reports, which may include information on events that were attended by numerous physicians.

Cynthia Cetani of Novartis Pharmaceuticals Corporation said that the data reporting process will present significant challenges to companies that did not previously have systems in place to track this information.

“Spend tracking is an intense process. It involves considerable detail and effort on the part of those who collect data. And a formal change management system must be considered from the start and reinforced throughout to successfully implement,” she said.

“Some may have innocently assumed that companies already had access to this information … they may have assumed it’s a simple report to run. The truth is that the system to process, the human resources, the ongoing commitment to generate all of this requires significant financial resources. Companies need to be thinking about all that is involved in getting this implemented as well as ongoing updates and maintenance now to ensure compliance,” she said.

Disclaimer: The views and opinions expressed in this article are those of the individual sources referenced and do not reflect the views, opinions or policies of the organizations the sources represent.

Listen to a recent webinar The Sunshine Act—Best Practices for Industry Compliance and the Pathway to Improved Patient Care. Hear experts Cynthia Cetani, VP, Ethics and Compliance Officer Novartis Pharmaceuticals Corporation; Ralph Hall, Counsel, Faegre Baker Daniels and Saul Helman, M.D. Navigant Consulting. Gain insights on defining, tracking and reporting “payment(s) or other transfer(s) of value” to physicians and teaching hospitals; new rules and deadlines related to the Act; recommended internal compliance strategies for sales staff, vendors, meeting organizers, etc. and navigating related state laws and pending state legislation.