Light­ning up de­vice pay­ments

Providers, de­vice­mak­ers in hold­ing pat­tern on com­pli­ance ef­forts as they await final rules for the fed­eral Sun­shine Act

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Although many providers and drug com­pa­nies have frozen their com­pli­ance with a new fed­eral pay­ment re­port­ing law un­til reg­u­la­tions are fi­nal­ized, many de­vice­mak­ers are busy pre­par­ing. The Physi­cian Pay­ments Sun­shine Act, part of the Pa­tient Pro­tec­tion and Af­ford­able Care Act, will re­quire the CMS to an­nu­ally pub­lish on­line the pay­ments and “trans­fers of value” made to physi­cians and teach­ing hos­pi­tals by group pur­chas­ing or­ga­ni­za­tions and drug, de­vice, bi­o­logic and med­i­cal­sup­ply man­u­fac­tur­ers.

Fed­eral of­fi­cials are far be­hind the im­ple­men­ta­tion time­line out­lined in the law. The leg­is­la­tion re­quired com­pa­nies to be­gin re­port­ing to the CMS by March 31, 2012, but a pro­posed rule was not pub­lished un­til Dec. 19, 2011. Fed­eral of­fi­cials wrote in the pro­posed rule that they now are aim­ing to is­sue a final rule be­fore the end of 2012 and launch the pro­gram by March 2013 (See chart).

The de­lay has had rel­a­tively lit­tle im­pact on many providers and health­care com­pa­nies so far be­cause they see the is­sue as too com­plex to take ac­tion un­til all of its many de­tails are fi­nal­ized and an­a­lyzed.

“We’re def­i­nitely work­ing with the com­pa­nies and try­ing to fig­ure out what each needs to do, but we’re not go­ing to have re­ally good an­swers un­til we see the final rule,” says Kate Con­nors, a spokes­woman for the Phar­ma­ceu­ti­cal Re­search and Man­u­fac­tur­ers of Amer­ica.

In ad­di­tion to un­cer­tainty over the con­tent of the final re­quire­ments, some provider and health com­pa­nies are hop­ing fed­eral of­fi­cials amend var­i­ous com­po­nents of the reg­u­la­tions that they view as out­side of the scope of the law, overly bur­den­some or likely to con­fuse pa­tients.

Some drug man­u­fac­tur­ers have been re­port­ing physi­cian pay­ments to var­i­ous ex­tents for years be­cause they were ei­ther re­quired to so by state laws or be­cause they im­ple­mented so-called cor­po­rate in­tegrity agree­ments, which of­ten re­sult from past reg­u­la­tory in­quiries and en­force­ment ac­tions.

Such re­port­ing pro­vided the ba­sis for ex­ten­sively cited physi­cian con­flict track­ing re­ports by Propublica in re­cent years.

De­spite the ex­pe­ri­ence of at least nine drug com­pa­nies with gath­er­ing and re­port­ing such in­for­ma­tion, the final rule will likely re­quire changes and en­hance­ments to that re­port­ing. An in­di­ca­tion of the com­plex­ity of the is­sues in­volved is seen in the 47 pages of com­ments that PHRMA sub­mit­ted re­lat­ing to the pro­posed rule.

“At first, some of them thought their ex­pe­ri­ence was go­ing to help them out; I don’t think it is go­ing to be­cause it is go­ing to be a com­pletely dif­fer­ent process,” Con­nors says.

Providers are tak­ing a sim­i­larly cau­tious ap­proach.

Heather Pierce, se­nior di­rec­tor of sci­ence pol­icy and reg­u­la­tory coun­sel at the As­so­ci­a­tion of Amer­i­can Med­i­cal Col­leges, says her or­ga­ni­za­tion’s mem­ber in­sti­tu­tions sup­port the goals of the Sun­shine Act, but they also are con­cerned that the pro­posed rule would al­low only 45 days for providers to re­view com­pany sub­mis­sions about them.

“There’s quite a process that teach­ing hos­pi­tals and clin­i­cians and the aca­demic med­i­cal cen­ters who have fac­ulty who are physi­cians will need to go through in a very short

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