Prepare for the Physician Payments Sunshine Act

Steps for making sure your information is accurate.

August 1 marks the beginning of a sweeping transparency initiative in which pharmaceutical and medical device companies collect and report data on their financial relationships with physicians and teaching hospitals. The Physician Payments Sunshine Act, which is part of the overall health care reform law, also requires manufacturers to submit annual reports documenting transfers of value, as well as certain ownership interests held by physicians and their immediate family members. The Centers for Medicare and Medicaid Services (CMS) will post the data on a public website starting Sept. 30, 2014.

Although physicians are not responsible for reporting these financial interactions, they should take steps to protect themselves by ensuring the information is accurate before it is made public. Explaining how the program works, Shantanu Agrawal, MD, director of CMS’ data sharing and partnership group, and Anita Griner, deputy director of the CMS data sharing group, addressed doctors in Chicago for the American Medical Association’s annual meeting on June 17. The two CMS officials also sought to quell concerns about the transparency initiative, in addition to fielding questions during a special education session.

Several doctors in the audience said they were worried that once in the public domain, false or misleading information can be sensationalized, and result in professional harm even if they had done nothing wrong. However, Griner was adamant that, “Accuracy is the number one goal of the program,” and all the more reason for physicians to participate in the initiative. “We want the website data to be complete and not to be disputed,” she said.

Both officials said the Sunshine Act reflects a broader trend in the passage of transparency laws for organizations and government officials. States are increasingly enacting their own laws and within medicine, many have pushed for greater transparency.

Doctors are encouraged to begin tracking their own financial interactions right away. The consolidated individualized reports will be posted next year for physicians to review. They will have the right to challenge those reports they believe are false or misleading.

Physician-manufacturer relationships have produced many positive results, leading to discovery and innovation, Dr. Agrawal acknowledged. CMS does not want to put a chill on these relationships or impede the discovery process, he said. But the need for transparency is magnified when one considers that 94% of doctors have some form of relationship with industry, with 60% involving medical education and 40% the development of clinical practice guidelines, he said. The open payments initiative simply aims to strike a delicate balance among research, education and clinical decision-making.

The federal CMS is offering a mobile app for smartphones to help with the payment tracking process. The app features sample questions to ask manufacturers, and suggests what to say to patients on this topic.

What You Can Do Now to Prepare

The AMA offers the following guidelines for physicians:

Update your disclosures before August 1 and regularly thereafter. Ensure that all financial disclosures and conflict of interest disclosures required by employers, advisory bodies and entities funding research, for example, are current and updated regularly.

If you have an NPI, update the information and ensure your specialty is correctly designated. Physicians who have a National Provider Identifier (NPI) should ensure all information in the NPI enumerator database is current and regularly updated as needed. This information will be used by industry, among other unique identifiers, to ensure that they have accurately identified you.

Inform your industry contacts that you want ongoing notice of what they report to the government.

Ask all manufacturer and GPO representatives with whom you interact to provide you with notice and an opportunity to review and, if necessary, correct all information that they intend to report before it is submitted to the federal government.

Types of Reportable Financial Transfers

Direct. Payments or transfers of value of $10 or more. Cash or cash equivalent, in-kind items or services, stock or stock option(s), or any other ownership interest, dividend, profit, or other return on investment. Product samples and educational materials that directly benefit patients are exempt from this reporting requirement.

Indirect. Transfers not made directly to the physician. They are classified as either third party transfers or as other types of indirect transfers.

Third Party. Transfers in which the physician does not receive payment. For example, a physician or person acting on the physician’s behalf specifies that the transfer be given to another person, such as a charity.

Other Types of Indirect Transfer. Transfers of value to a physician indirectly by a third party or intermediary. For example, a manufacturer makes a payment to a physician organization and then directs the payment to be provided to a specific physician, without regard to whether the specific physician was identified in advance.

Ownership. Certain ownership interests held by physicians and their immediate family members. Exceptions to the reporting rule include securities that (1) may be purchased on terms generally available to the public; (2) are listed on a stock exchange; and (3) have quotations that are published on a daily basis.

Reporting Exemptions

Certified and accredited CME.

Buffet meals, snacks, soft drinks, or coffee generally available to all participants of large-scale conferences or similar large-scale events.

Product samples that are not intended to be sold and are intended for patient use.

Educational materials that directly benefit patients or are intended for patient use.

The loan of a medical device for a short-term trial period, not to exceed 90 days, to permit evaluation of the covered device by the covered recipient.

Items or services provided under a contractual warranty, including the replacement of a covered device, where the terms of the warranty are set forth in the purchase or lease agreement for the covered device.

A transfer of anything of value to a physician when the physician is a patient and not acting in his or her professional capacity as a physician.

Discounts (including rebates).

In-kind items used for the provision of charity care.

A dividend or other profit distribution from, or ownership or investment interest in, a publicly traded security and mutual fund.

In the case of an applicable manufacturer who offers a self-insured plan, payments for the provision of health care to employees under the plan.

Payment to a physician who is a licensed non-medical professional solely for non-medical professional services. For example, payment to a physician licensed to practice law and retained by a manufacturer to provide legal advice.

Payment to a physician solely for the services of that physician with respect to civil or criminal actions or administrative proceedings.

Transfers of less than $10 in value, unless the aggregate amount transferred, requested or designated by the manufacturer on behalf
of the recipient exceeds $100 during the calendar year.