Presentation on theme: "Physician Payment Sunshine Act"— Presentation transcript:
1 Physician Payment Sunshine Act Thomas SullivanPresidentRockpointeTom Intro
2 Acknowledgement of Support Thomas Sullivan is a Principal in Rockpointe Corporation and their subsidiary The Potomac Center for Medical Education; these entities have received educational grants or performed work from grants from the following companies in the last 24 months:AbbVieBristol Myers SquibbEisaiNovartisAmgenCubistEli LillyOtsukaAlconCelgeneJanssenQLT IncAmylinCephalonLantheusPfizerAstellasCSL BehringMedicureSanofiAstra ZenecaDaiichi SankyoMedImmuneSt. Jude MedicalAveoGE HealthcareMedtronicTevaBayerGenentechMerckVertexBoehringer-IngelheimGileadMillenniumWatsonWe believe that this support shows a commitment by companies to provide quality education to physicians around the country.*Expelled from school in the first grade for switching classes with identical twin brother.
5 Background: How Did We Get Here? Rising healthcare costs17-22% of state budgets spent on MedicaidPerceived conflicts of interestLarge/high-profile pharma settlementsFailure to report $$
6 BackgroundThe Physician Payment Sunshine Act was originally drafted by Senators Chuck Grassley (R-IA) & Herb Kohl (D-WI) in 2007 and re-introduced in 2009The Act’s stated intent is to shed light on direct payments from product manufacturers to physicians and other medical practitionersSec of PPACA incorporated the “Sunshine Act”Gives transparency to payments to physicians from pharmaceutical and medical device companiesFull disclosure of physician payments in a searchable, public database makes it easier to investigate and eventually prosecute health care fraud
7 Are We Just Wasting Sunscreen? “Our results show that the disclosure laws in the two states we examined had a negligible to small effect on physicians switching from branded therapies to generics and no effect on reducing prescription costs.”“Transparency is important in its own right, but if deterring unnecessary, costly prescribing is a concern for policymakers, more direct action may be required.”Negligible to small effects of the disclosure laws in Maine and West Virginia for both statins and SSRIs. Arch Intern Med. 2012;172(10):
8 Final Rule?On December 19, 2011, HHS issued a proposed rule for “Sunshine Act”.Still no final rule from CMSIn May 2012, CMS established a “Working Group”Includes both technical and policy staff from CMSWill assess the staff and resource requirements needed to fully implement the programCMS issued RFP soliciting outside helpSept 12, 2012Senate Aging Committee Roundtable on Sunshine RuleContext of payments so patients understandQuestions on CME and mealsExperience with state laws and CIA’s
9 Rule Sent to OMBProposed Final Rule sent to OMB (White House) November 2012Consumer Groups Voiced Opposition to AMA Letter December 27, 2012Still at OMB (Time line to be determined)Flexibility on timing once at OMB
10 Physician Members of Congress Letter to CMS May 20128 physicians and 1 nurse:Overwhelming administrative burden for companies, doctorsFailure to exempt CMEAdverse impact on medical research in the U.S.24% less likely to do research if payments public; ACROImpact on small companiesCompliance will cost billionsHigh penalties will result in greater reporting more $$
11 Letters.. Letters.. Letters Letters have been sent from consumer groups, industry, and others requesting quick resolution and publication of the sunshine regulationsAMA Letter to Marilyn Taverna clarifying that the intent of the law was not to have indirect payments including CME Included in reporting
12 Everyone is Suspect“The administration should implement the (sunshine) act without any further delay so that it can begin, as soon as possible, to rein in the undue and harmful influence of money on medicine,”Letter from former NEJM Editors to White House Politico
13 AMA IssuesExpand the act beyond its intentions by proposing that some indirect transfers, such as certified continuing medical education in which sponsoring manufacturers have no input into the content, speakers or attendees, be included in the reporting.Allow physicians to be listed as receiving payments or transfers if they were employed or affiliated by an organization that got them — even if those physicians individually never received them.Not provide physicians a sufficient mechanism for appealing or challenging any information appearing on the list. Manufacturers submit the information and have 45 days to make any appeals, but physicians have no guarantees that they will see companies’ lists on an ongoing basis so they may make corrections. AMA asserted that this process would deny physicians “substantive and procedural du process rights.”
14 Timeline and Responsibility Start Dates (Former)???2013: Data Collection BeginsMarch 31, 2014: Partial year 2013 data submitted to CMSPrior to September 30, 2014: 45 Day Review PeriodSeptember 30, 2014: CMS to publish 2013 data on public websiteGAO Stated Public Reporting Could Take Until December 2014 may be 2015….
15 Who ReportsApplicable manufacturers of covered drugs, devices, biologicals, and medical suppliesReport all payments or other transfers of value to covered recipients and physician ownership and investment interestsCertain entities under common ownership with an applicable manufacturer must also reportProducts available for payment under Medicare, Medicaid, CHIPApplicable Group Purchasing Organizations (GPOs)Report only physician ownership and investment interestsDefinition includes physician owned distributors (PODs) that purchase products for resaleExcluding OTC Only Makers
16 Proposed Definitions Covered recipients Physician/and or group practiceIncludesMD’s, DO’s, Dentists, Dental Surgeons, Podiatrists, Optometrists, or ChiropractorsTeaching hospitalAny Hospital Receiving Medicare Payments for Direct Graduate Medical Education, IPPS Indirect Medical EducationOther Hospitals Not off Hook – Indirect Payments to StaffReporting anything valued over $10 or $100 cumulative within a year (down to the penny)
17 What Information Must Be Reported? Covered recipient name and addressNPI Number and SpecialtyThe amount and date of paymentForm of PaymentCash or cash equivalent or In-kind items or servicesStock, stock option, ownership interest, dividend, profitNature of such paymentIf payment or transfer relates to marketing, education, or research of a drug, device, biological, or medical supply, the product must also be identified
18 Natures of Payment Gift Consulting fees Food and beverage EntertainmentTravel and lodging (including specific destination)HonorariaResearch (direct and indirect)EducationGrantCharitable contributionDirect compensation for serving as Faculty for Medical Education ProgramConsulting feesCompensation for services other than consultingRoyalty or licenseCurrent or prospective ownership or investment interestAny categories of information the Secretary determines appropriate
19 ExclusionsPayments made indirectly to a covered recipient through a third party when applicable manufacturer is unaware of the identity of the covered recipient.Payments under $10, unless annual aggregate is > $100SamplesEducational materials that directly benefit patients or are intended for patient use90 Day Equipment LoansWarrantyIf Doctor is a PatientIn Kind for Charity and DiscountsDividends from Public CompanyPayments for Legal Work
20 Educational Materials Sunshine ActEducational materials must consist of materials (such as pamphlets) that directly benefit patients or are intended for patient use.CMS clarified that this exclusion is limited to "materials" (including, but not limited to, written or electronic materials) and does not include services or other items.Implication: Implies that other educational materials that do not fall within another exception must be reportedCMS solicited comments on whether educational materials provided to covered recipients (for example, a medical textbook) should be interpreted as educational materials that ‘‘directly benefit patients’’
21 Charitable Contributions Sunshine Act:For purposes of the reporting requirement, a charitable contribution is any payment or transfer of value made to an organization with tax-exempt status under the Internal Revenue Code of 1986 that is not more specifically described by one of the other nature or payment categories.
22 Proposed Rule and Third Parties Act generally excluded payments to third partiesIf manufacturer is unaware of recipient’s identityHoweverIf manufacturer is aware of identity they must reportBroad standard for “awareness”Actual knowledge or acts in deliberate ignorance/reckless disregard of identity of covered recipient“Publicly Available”Example: Dept chair = publicly available must be reported (page 38-39)
23 Exhibits Under Current Definition Transfers of Value may include exhibit fees and sponsorshipsAttendee list is available upon purchaseCould be considered disregard if they fail to order a registration listWhat if company rep sees some one they know on exhibit floor at the meeting…….
24 Exhibit BoothsDo not need to report offering of buffet meals, snacks or coffee at booths at conferences or similar events where it would be difficult to definitely establish the identities of the individuals who accept the offering (page 29)
25 Civil Monetary Penalties Honest MistakesKnowingly IncompliantPenalty Criteria$1,000 - $10,000/ Per PaymentMaximum Penalty $150,000$10,000 - $100,000 Per PaymentMaximum Penalty $1,000,000Length of TimeValueCulpabilityNature and Amount ReportedDegree of Diligence
26 45-Day Review PeriodManufacturers, GPOs, covered recipients and physician owners and investors may review and submit corrections before CMS makes the information available to the publicCMS will notify the parties for reviewCMS list serves and an online posting.May also preemptively register with CMS to receive notificationLog in to review informationIn the event of disputes, CMS will provide physicians/teaching hospitals contact info for manufacturers and GPOs on requestPhysician/teaching hospital must directly contact applicable manufacturer or GPO and resolve any disputeIn the event that a dispute cannot be resolved, CMS proposes publishing both versions of the data
28 Implications of the Sunshine Act for Providers Powerful new tool for prosecutorsInquiry into billing/services patterns; overuse/misuseDisclosure of industry Payments to physicians and teaching hospitals poses several distinct risks:Violation of fraud and abuse lawsAnti-Kickback LawFalse Claims ActStark LawNon-compliance with federal regulations on conflicts in clinical research, orReputational risk due to the appearance of impropriety
29 International IssuesU.S. Foreign Corrupt Practices Act (FCPA) UK Bribery Act French Transparency Act Global Transparency
30 What Do You Need to Do? Understand Aggregate Spend Program Be aware of unexpected reportingTimeliness is everythingNo Minimum paymentStart Collecting NPI numbers on Attendees (may need)Training/education/compliance/risk managementWait – The Sunshine Rules Should be Released Q1 2013
31 For More InformationThomas SullivanPresidentRockpointe