Modern Healthcare - - SPE­CIAL RE­PORT -

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.

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