June 13th, 2012
New “Sunshine Provisions” in the Patient Protection and Affordable Health Care Act add federal requirements to a variety of obligations under state laws that regulate drug and device manufacturers’ marketing to healthcare providers. The Sunshine Act, one of 27 acts included in the Affordable Care Act’s comprehensive health care legislation, was signed into law by President Obama in early 2010 and requires all pharmaceutical and medical device companies to track and report all financial transactions, “payments or transfers of value,” greater than $10 to any physician or teaching hospital. This includes everything from modest meals, notepads, travel expenses, and speaking fees to consulting fees, research payments, and gifts of stock made to a health care provider or academic teaching institution.
On April 4, 2012 Senators Grassley and Kohl sent their second letter to Marilyn Tavenner, Acting Administrator for the Centers for Medicare and Medicaid Services (CMS), indicating their continued disappointment that CMS missed the statutory deadline for implementing the Sunshine Act by October 1, 2011. In their letter, the Senators strongly request that CMS promulgate the final rule by June 2012, with a strong focus on five essential elements of the law. CMS responded to the letter by giving industry a brief reprieve by delaying the aggregation and tracking of data until at least January 1, 2013. The reader should note that CMS has yet to release the final rules to implement the legislation along with the definitive reporting due date.
The constitutionality of the Affordable Care Act is currently under review by the US Supreme Court as it relates to the ACA’s “individual mandate” and Medicaid expansion. The Sunshine Act’s constitutionality was not questioned during the recent Supreme Court arguments, but the Sunshine Act would be vulnerable if the Court struck down the entire ACA.
The Critical Components Of The Transparency Ecosystem
Two critical and essential components of the “Health Care Transparency Ecosystem” must be addressed now if industry is going to be ready to aggregate and track data by January 1, 2013, and deal with physicians who want to review data prior to public disclosure: (1) An easy-to-use reporting system that provides physicians and teaching hospitals with the opportunity to proactively review, dispute and correct inaccurate data prior to submission to CMS; and (2) physician outreach and education, as currently 47 percent of US-based physicians and other covered recipients are not aware of the Sunshine Act.
Analyzing the comments on the proposed rule. The call for comments on the proposed regulations for the Sunshine Act ended on February 17, 2012 with over 300 comments posted online from private citizens, individual physicians, academic organizations, medical societies, the American Medical Association and industry support groups. My company, MMIS, reviewed and analyzed the comments and identified interesting trends and opinions. The overarching revelation was the fact that only a few individual physicians stated that the act should be repealed.
Basically, every organization and individual that submitted comments accepted that fact that health care transparency is inevitable and right around the corner. The main issues up for discussion and interpretation revolve around the level of detail of financial data to be reported; the date for the partial collection and submission of data in 2012; and the rules for proactive dissemination of reportable data to health care providers, including a notification, dispute, and resolution process for physicians to help provide context around the data for consumer interpretation. After all, wouldn’t you want to have the opportunity to review and dispute data about your financial relationships if they were to be published in an online database for the world to see?
The overall consumer sentiment is pro-transparency because transparency will reduce drug costs and because payments can influence doctors’ treatment decisions. The consumer response to the law and proposed rule is extremely favorable. For example, one consumer comment states: “I strongly support this proposed rule. As one of only two countries in the world where drug companies can advertise their products directly to the consumer, it is high time the influence of drug company money on physician’s decisions be reduced.”
Posting spend data online will encourage a proactive conversation and an ongoing discussion to share ideas via a Transparency Ecosystem. The Ecosystem will ultimately define the problem, the stakeholders and the solutions.
The steps involved in the Transparency Ecosystem process include:
- Correctly identifying the Covered Recipient (CR). This could be the Health Care Provider (HCP), the Health Care Organization (HCO), or the Health Care Agent (HCA). Compliance requires an up-to-date and accurate view of the CR.
- Capturing spend data. This entails accurately identifying, aggregating, and tagging spend transaction data to the CR. The industry must have enterprise systems to track, aggregate, analyze, and report spend transaction data to state, federal and international governments.
- Proactively sharing data. This involves notification of spend transaction data to CR prior to filing reports. There must then be a 45-day CR preview period. HCP relationships must be managed through the notification, inquiry and dispute resolution process.
This process involves secure, private communication with CRs to resolve issues prior to reporting and during public disclosure.
The Sunshine Act has many benefits despite the initial and long-term challenges it imposes regarding policy implementation and management. A notification, inquiry and dispute resolution system could be structured to proactively share information with physicians and other covered recipients via a private, secure, cloud-based portal, allowing timely review of financial transaction data and providing the ability to address mistakes or inaccuracies directly with the pharmaceutical and medical device companies who are required to report the data. This would alleviate physician worries and ultimately provide timely and accurate information to the public consumer.
The Need For Outreach To Physicians And Other Stakeholders
One of the biggest challenges today is education, due to the lack of awareness of this law by physicians, academic teaching institutions and consumers. A recent survey of 50,000 specialists and primary care physicians conducted by The Regulatory Law Group and a major US-based physician association found the following:
- 47 percent of physicians are not aware of the overall Physician Payments Sunshine Act, as part of the Affordable Care Act.
- 56 percent of physicians are concerned about the Physician Payments Sunshine Act.
- 61 percent of physicians would access an online portal to communicate with industry to proactively review and manage financial data to be reported to the government.
- 83 percent of physicians want the opportunity review payments reported by medical suppliers prior to reporting and public disclosure.
- 85 percent of physicians would like a channel to dispute payments reported by medical suppliers prior to reporting and public disclosure.
One of the main concerns of physicians is that they will be incorrectly listed as having received gifts, monetary compensation or other financial incentives from drug and device makers without the ability to participate in the reporting process. Once reported to CMS, all financial transactions between the physician and the drug or device company will be posted online, in a searchable database.
The act of posting accurate and understandable information online for public review is a key component to the success of the Health Care Transparency Ecosystem. All ecosystem stakeholders, including innovative companies who provide new technologies and tools to increase communication between the ecosystem stakeholders, must work together in partnership in this new age of health care transparency to reduce drug costs and enhance patient care.Email This Post Print This Post
Don't miss the insightful policy recommendations and thought-provoking research findings published in Health Affairs. I want to SUBSCRIBE NOW!