Beginning in September 2014, the Centers for Medicare and
Medicaid Services (“CMS”) will publish a list of all payments and transfers of
value paid by drug manufacturers to physicians and teaching hospitals on a
publicly accessible website, pursuant to the Physician Payments Sunshine Act
(Sunshine Act). The Sunshine Act, a provision of the Affordable Care Act, is
intended to create greater transparency around the financial relationships of
manufacturers, physicians, and teaching hospitals.
The Sunshine Act requires companies that manufacture drugs,
medical devices, and biologics to provide detailed information to CMS about any
direct payments or transfers of value paid to physicians and teaching hospitals
worth more than $10, with certain limited exceptions. Transfers of value include,
but are not limited to, consulting fees, travel, food, entertainment, gifts,
honoraria, royalties, and compensation for speaking and research. Physicians’
ownership or investment interests in any drug or device company will be
reported as well. Manufacturers are required to categorize how the recipient
received the payment (such as cash, in-kind items or services, stock, etc.),
and must provide a reason for the payment. CMS will then post these “transparency
reports” on a publicly accessible website beginning September 30, 2014.
Although physicians and hospitals aren’t required to submit
these reports to CMS, physicians are subject to exposure when the reports are
released to the public. There are several risks that physicians face when these
reports are made public:
1. The federal government can use the reports to support an
Anti-Kickback or False Claims Act claim, if it appears that there is a suspect
relationship between a drug manufacturer and a physician or group of
physicians.
2. The IRS may also look to these reports and compare the
information to what individual physicians are reporting as income. Physicians
will need to be extra diligent about keeping track of what payments they
receive and reporting them as income on tax returns.
3. Private citizens could use the information in “qui tam”
whistleblower lawsuits. For example, an employee with knowledge of a particular
physician’s prescribing practices might develop suspicions, or have existing
suspicions validated, upon seeing the amount of money a physician is receiving
from a drug manufacturer.
4. A reporter can search the database and publish a damaging
article about any physician who routinely prescribes a particular drug or uses
a particular medical device from a manufacturer with which the physician has a
financial interest.
5. A physician’s reputation can be harmed if it appears she
is receiving vacations, dinners, etc. from a drug company that manufactures a
drug she routinely prescribes, evidencing a treatment bias.
Physicians can minimize these risks in the following ways:
1. Understand what will be reported. The American Medical
Association has published a thorough explanation of the reporting requirements,
available here.
If physicians understand what will be reported, they can make better decisions
about whether any particular financial relationship with a drug manufacturer is
worth the potential exposure.
2. Physician groups and hospitals should develop a conflict
policy stating what relationships are appropriate between their physicians and
drug manufacturers. The conflict policy should balance competing interests,
including the benefits resulting from physician knowledge and collaboration
with drug companies versus financial incentives that may lead to a treatment
bias.
3. Physicians should register with CMS’s Open Payments
website, here.
Physicians can view their consolidated transparency report and dispute any
incorrect information before it becomes public through the Open Payments
website. (Physicians have additional time, cumulatively two years, to dispute
reports even after the reports are made public.) Physicians can also download
the Open Payments App on their cell phone, for easy access to their transparency
reports.
