time period to review not only the amount of reported transfers of value, to ensure that it is to the right person or entity and that it is categorized appropriately,” Pierce says. “And then to resolve any dispute within that same window.”
Preparatory steps by medical colleges are generally limited to planning discussions about the type of system that will be needed to review the data planned for submission within the allotted timeframe and how many people will be needed to perform that task.
“Until the final rule comes out, it won’t be clear what exactly will have to take place within that time and what kind of communications could occur before the opening of that window that might spread out the process a little bit,” Pierce says about the 45day review period.
Waiting to prepare to become compliant with the law makes sense, according to some healthcare companies, providers and industry consultants, because too much uncertainty still surrounds the process. For example, it is unclear whether the CMS will drop provisions of the proposed rule that some respondents say appeared to go beyond the scope of the law, including requiring reporting by foreign companies.
If such a reporting requirement is kept in the law, PHRMA wrote in its comments, then enforcement of that provision should move from 90 days after the final rule is issued to 12 months.
“All of this needs to be figured out, and until it is figured out, companies don’t know how to proceed with the requirement,” Connors says.
Although the large number of unknown components in the final rule makes waiting to act logical to many affected organizations, it does carry risks. Primarily, it is unclear whether healthcare companies can design and build the compliance systems necessary under the law within the 90 days the CMS proposed providing in the draft rule.
While some industry consultants agreed that preparation without a final rule is difficult, they urged providers to implement systems that would allow them to track any industry payments or gifts. The basic requirements in the law mean providers know they will need to track all payments from health companies just to determine if they are exceeding the eventual reporting thresholds, whatever those are in the final rule.
“The worst thing that could happen is for you not to collect that data and then a manufacturer is saying when they produce their report that they paid all this money to you but you can’t account for it,” says one provider industry consultant.
A similar conclusion about the underlying factors in the law led many devicemakers to decide to identify and complete any work they could finish before the final rule is issued.
Thomas Schumacher, vice president and chief ethics and compliance officer at devicemaker Medtronic, says the company has used as a guide some of the parameters that the underlying law clearly defined. For instance, his company knows it will need all of its various payment tracking systems to be able to aggregate information so all types of spending on a given doctor are identifiable.
Also, the company has been reviewing its record-keeping to ensure it uses a common reference for each physician for whom it maintains records.
“So even if we don’t know exactly how CMS wants a particular transaction identified or exactly in what format it will receive a report about that transaction, we certainly know we have to identify what are the differ- ent data sources that we may have as a complex global company with multiple different business units operating on different systems,” Schumacher says.
Those steps, on which Schumacher says Medtronic has spent “millions” of dollars, came even after the company voluntarily launched an online public reporting system of all aggregate payments of at least $5,000 it provides to any physician.
Medtronic decided to voluntarily disclose some payment information “because we felt like the public discourse around physician and industry interactions was so lopsided and there was a real failure to understand what appropriate collaboration means to innovation and getting the best products to patients,” Schumacher says.
Edwards Lifesciences launched a similar online database reporting physician aggregate payments of at least $5,000 in 2009. Similar to Medtronic, an Edwards’ official says the experience has helped it to prepare for the complying with the more-aggressive reporting requirements expected in the Sunshine Act. Company officials also have discussed lowering their voluntary reporting threshold, which is significantly higher than the $10 single payment and $100 total annual payment required under the Sunshine Act.
“We certainly believe in being transparent and are proud to be out there early and adopting and publishing what we think will be required of us,” says Amanda Fowler, a spokeswoman for Edwards.
Such early efforts are not unusual among devicemakers, says Chris White, general counsel of the Advanced Medical Technology Association, or Advamed.
“The industry has committed itself to the effective implementation of this policy so it has already invested great sums to begin to review the systems internally and to review the sources of the data that ultimately would need to be reported in some form,” White says.
Those preliminary efforts were already well under way last year, he says, because the legislative language had called for data collection by covered companies to launch Jan. 1, 2012.
In fact, the delays were significant enough that the Obama administration drew the ire of the bipartisan sponsors of the legislation. Sen. Herb Kohl (D-wis.), chairman of the Senate Aging Committee, and Sen. Chuck Grassley (R-iowa), the panel’s ranking member, were planning a hearing to grill the administration about the delay, but canceled it when the proposed rule was released the day before the hearing date.
“It shows Congress has a responsibility not just to make laws but also to see that they’re carried out as intended,” Grassley says in a written statement soon after release of the draft regulation. “Companies need this guidance to do their part.”
Devicemakers did not wait for the proposed rule to begin developing their internal accounting systems and to hire consultants to help them align those internal systems to provide comprehensive reports on all forms of payments made to physicians, according to White.
Advamed spurred this process by creating a detailed project plan—submitted as part of its comments to the CMS on the proposed rule—that identify specific early tasks device companies could undertake to increase the likelihood that they will comply with the law. Such guidance led to significant compliance spending, already, including 60% of Advamed members reporting they already spent at least $500,000 on complying with the law, according to a member poll.
Despite the relatively advanced nature of the device industry’s preparation for the final rule, White says those companies are prevented from completing the work until they know critical undefined details.
“Companies just can’t design systems too far beyond where they were last year in the absence of some of that key threshold guidance that we now await,” White says.
Another important component of preparation for the law’s implementation, according to providers and health industry officials, is preparing the public for the release of the payment information. That preparation essentially entails providing “context” that explains the generally benign nature of many payments as well as explaining the critical need for physician and industry interaction.
“We’re trying to get the word out so that people understand this information and aren’t scared by it,” Pierce says about medical colleges’ outreach, which has generally occurred through the media.
In anticipating that providers also may need some assistance explaining any reports to their patients, companies such as Medtronic have created explanatory material for physicians to distribute and have trained sales staff to answer requests from physicians for effective ways to discuss the issue with patients.
Teaching hospitals, devicemakers and drug companies are among those expressing concerns about the complexities of the law’s implementation.