One Step Closer to Medical Transparency: Pew's Analysis of the Final Rule for the Physician Payments Sunshine Act

On Feb. 1, 2013, the Centers for Medicare & Medicaid Services (CMS) published the final rule guiding implementation of the Physician Payments Sunshine Act, which Congress passed as part of the Affordable Care Act in March 2010 to increase transparency in the relationships between physicians and drug and medical device makers. Overall, it is thorough and thoughtful, requiring comprehensive reporting while recognizing practical challenges and minimizing the reporting burden on companies and physicians, where possible. Following are some highlights of the final rule.  

• Swift implementation. CMS has released a final rule requiring companies to collect payment information within 180 days of the final rule, as outlined in the original statute. With the proposed timeline, CMS has appropriately ensured that companies will begin to collect data on physician payments on Aug. 1, 2013, meaning five months of 2013 data will be posted on a public website in 2014.¹

• Specific definitions. Rather than issuing final definitions for each category of payment, the agency has adopted nonbinding guidance as an aide to consistency. CMS should provide additional clarity and examples to ensure that once the data is posted online, it will be understandable.²

• No "other" category. CMS has removed the proposed "other" category of payments, which might have obscured the meaning of certain payments by combining them into one category.³

• Specification of drugs, devices, and biologicals. *CMS has clarified that when any payment is reported, the manufacturer must identify the product or products relevant to that payment. This crucial context allows readers to understand how certain payments may be related to promotion of specific products, enhancing the database as a tool for identifying conflicts of interest.⁴

• Physicians' names to be included in indirect research payment reports. Reports of research payments made to a third party, such as a teaching hospital or contract research organization, will be categorized as indirect payments and will include the name of the physician who is the principal investigator. Manufacturers will be allowed to include a context field to provide details regarding the specific amount received by the principal investigator and other physicians who may be involved in the research.⁵

• Accredited Continuing Medical Education. The final rule does not specifically require reporting of all payments via third parties to physicians who teach CME courses funded by industry. CMS has limited its exemption to CME programs that meet the certification requirements of at least one of five accrediting organizations, such as the Accreditation Council for Continuing Medical Education. In addition, the exemption will apply only to courses for which the company has not suggested a speaker or directly paid that speaker.⁶

• Other indirect payments. CMS has clarified that any payment made to a group practice on behalf of a specific physician will be attributed directly to that physician, rather than to an LLC or other corporate entity. This important stipulation is consistent with the spirit of the statute.⁷

• Reporting delay for research payments. The four-year reporting delay protects the development of new products but, appropriately, does not apply to clinical research on products already in use.⁸

• Companies are encouraged to give doctors pre-review. CMS recommends, but does not require, that companies submit payment data directly to doctors and hospitals even before the information is sent to CMS. This will give doctors more time to review the data for any inaccuracies and to work with industry to correct the amounts before the data are sent to CMS.⁹

• A reasonable review and dispute process. The final rule allows physicians a 45-day review period before payments are reported and adds an additional 15 days for dispute resolution when needed. Appropriately, the rule does not require CMS to mediate disputes between doctors and industry, which might have prevented CMS from meeting its timelines for final posting of data.¹⁰

• Nonaccredited promotional speaking (speakers bureaus). CMS revised and expanded the payment categories relating to industry-funded speaking engagements. CMS intends for speakers bureaus to be categorized under "Compensation for services other than consulting, including serving as faculty or as a speaker at an event other than a continuing education program." However, this category will also include other "services," potentially limiting transparency for speakers bureaus, which have been a major concern for policymakers and leaders of the medical profession.¹¹

• Complete reporting of food and beverages. CMS has clarified that industry should report the value of any meals and beverages provided to physicians in nearly all settings. The agency exempted buffet-style meals, but only at medical conferences and specifically in situations where it is difficult to establish the identities of recipients. Therefore, CMS should clarify in guidance that when companies use sophisticated tracking tools to identify consumption, the company must attribute the cost of those meals to the covered recipients partaking.¹²

• Exemption of small payments at conferences. Consistent with the statute, CMS has required that manufacturers collect information on payments of less than $10 in value in order to determine whether a covered recipient has reached the $100 annual threshold for reporting. A limited exemption applies specifically to small gifts provided at large-scale conferences and events. CMS should clarify that this applies only to items of de minimis value when recipient identification is infeasible.¹³

• Residents exempted from reporting. CMS has suggested that medical residents do not meet the definition of "physicians" for the purposes of the reporting requirements, because not all residents have medical licenses and they could be difficult to identify. Because manufacturers do provide gifts, meals, and other transfers of value to residents, this is a loophole that would allow many payments to physicians to go unreported. CMS should require that such payments be attributed to residents when their identities can be ascertained by manufacturers.¹⁴

• No exemption for textbooks and other physician materials. CMS has clarified that educational materials for physicians, such as textbooks and posters, are gifts of value that must be reported. Educational materials specifically for patients, on the other hand, are appropriately excluded from reporting requirements.¹⁵

• Context field allowed. CMS has clarified that companies can add a context field for additional information clarifying payment details, such as how large research grants are distributed.¹⁶

• The CMS website will be user-friendly, sortable, searchable, and downloadable. In keeping with the language in the statute, CMS has specified that the publicly available website will be clear and understandable to consumers and that all data will be downloadable for easy access by researchers. As described in the final rule, the final data can be searched across multiple fields and will be available for downloads.¹⁷ CMS should begin developing this website as soon as possible to ensure that it meets these criteria.

• Enforcement process. Each payment report must include an attestation by a company officer that the information reported is timely, accurate, and complete. This will help to ensure accountability and accuracy.¹⁸ CMS has clarified the process for enforcement of the requirements of the Sunshine Act, including which agencies will be responsible.¹⁹

What’s next? Over the next several months, CMS will create specific guidelines for companies, including details about what formats to use for reporting payments. CMS should work with stakeholders to develop a database that will enable the public to access this information. This is a largely technical undertaking with far-reaching implications. Therefore, it is vital that CMS build a functional, user-friendly database that fulfills congressional intent to shine sunlight on these financial relationships between physicians and drug and medical device companies.

* - Biologicals are medicinal preparations made from living organisms and their products, including serums, vaccines, antigens, antitoxins, etc.

References

1. CMS Final Rule: Medicare, Medicaid, Children's Health Insurance Programs; Transparency Reports and Reporting of Physician Ownership or Investment Interests, 1.
2. Ibid., 92-94.
3. Ibid., 91.
4. Ibid., 68-69. 
5. Ibid., 105-106.
6. Ibid., 139-140.
7. Ibid., 53.
8. Ibid., 194.
9. Ibid., 156-157.
10. Ibid., 180.
11. Ibid., 88-91.
12. Ibid., 87.
13. Ibid., 114.
14. Ibid., 37.
15. Ibid., 116-117.
16. Ibid., 106.
17. Ibid., 186-190.
18. Ibid., 164.
19. Ibid., 200-206.