Thomas Sullivan President, Rockpointe March 2015
Thomas Sullivan • Former political consultant who founded Rockpointe, Inc., an accredited bio- medical education company in 1995 • Authority in changing medical education environment and economy • Author of Policy and Medicine, the leading online coverage of the Sunshine Act, a resource informing the medical community on trends, threats and changing processes • Disclaimers : Information provided is for educational purposes and should not be construed as legal advice
Agenda • Overview of Sunshine Act • Review 2013 Data • A Look at Three Years of Massachusetts Data • Discuss Reaction • Recommendations • Resources
Overview of Sunshine Act
Background on the Sunshine Act, Section 6002 of the Affordable Care Act • Senator Grassley of Iowa and former Senator Kohl of Wisconsin introduced unsuccessful versions of a Sunshine bill in 2007 and again in 2009, focused on public disclosure of the financial relationships between physicians and the pharmaceutical, device, and biologics industries. • The Sunshine Act was finally enacted as a small provision in the much larger Affordable Care Act in 2010 (Section 6002). • The Centers for Medicare & Medicaid Services (“CMS”) was delegated the task of creating the necessary regulations to implement it. • Following numerous delays, CMS released the final regulations on February 8, 2013.
In General • The Sunshine Act requires applicable manufacturers (AM) of “covered” drugs, devices, biologics, or medical supplies to report annually to the Secretary of HHS certain payments or other transfers of value to covered recipients (CR)--physicians and teaching hospitals. • The Sunshine Act does not “ban” any payments but simply requires reporting of payments and transfers of value.
Who Reports? • (1) Applicable manufacturers of covered drugs, devices, biologicals, and medical supplies covered by Medicare, Medicaid, or CHIP are required to report on their transfers of value • (2) Applicable Group Purchasing Organizations (GPOs) – Report only physician ownership, investment interests – Definition includes physician owned distributors (PODs) that purchase products for resale • Excludes OTC-only makers Covered recipients, including colon and rectal surgeons, have no reporting obligations . Only manufacturers are subject to Civil Monetary Penalties for noncompliance.
Who Is Reported On? • Physician/and or group practice – MD’s, DO’s, Dentists, Dental Surgeons, Podiatrists, Optometrists, or Chiropractors – All physicians that have a current license regardless of whether enrolled with CMS, or whether treating patients • Ownership interests of employees of manufacturers and immediate family members • Payments to non-CRs meant to pass through to physicians must be reported as indirect payments • Sunshine Act excludes : payments to bona fide employee of applicable manufacturer (except ownership interest), residents, nurse practitioners, physician assistants, pharmacists, physicians in their capacity as payments
Who Is Reported On? Teaching hospital – Any Institution receiving payments under: Indirect medical education (IME) Direct Graduate Medical Education Psychiatric hospital IME CMS publishes an annual list – identifying the teaching hospitals that are affected (over 1200) Does not include payments to non- – healthcare departments at universities affiliated with hospital Must report indirect payments as – required
What is Reported? Three Open Payments Databases • General • Ownership • Research
General Database What information is reported? • Covered recipient name and business address • NPI Number and Specialty • State professional license #(s), at least one State • The amount and date of payment • Form of Payment – Cash or cash equivalent – In-kind items or services – Stock, stock option, ownership interest – Dividend, profit or other return on investment • Nature of such payment (16 categories) – If payment or transfer relates to marketing, education, or research of a drug, device, biological, or medical supply, the related product must also be identified • Product Market Name and NDC Code • Context: 200 characters
General Database Nature of Payment Ownership Consulting Lodging Travel Research Interests., Royalties and Licenses Education Gifts Food and Beverage Entertainment Speaking
Ownership • Employees of manufacturers, as well as their immediate family members, with ownership interests in privately held companies with marketed products must be reported: – Spouse – Natural or adoptive parent, child or sibling – Father, mother, daughter, son, brother or sister- in-law – Stepparent, stepchild, stepbrother, or stepsister – Grandparent or grandchild – Spouse of grandparent or grandchild • CMS gives an exemption on this requirement if the manufacturer or GPO does not know of the relationship • Only 224 of the reported entries in 2013 were owned by immediate relatives, worth $51,675,944
Research • All payments made in connection with an activity that meets the definition of research , and that are subject to a written agreement, contract, or research protocol, or both, are reported under “special rules.” • List Principle Investigators under total amount of the study • Certain research payments made to a CR by an AM under a product research or development agreement may be delayed from publication on the Web site.
Must also report indirect payments • Direct Payment – Manufacturer pays physician or hospital directly • Indirect Payment – Manufacturer pays a 3 rd party directly, the 3 rd party then pays a physician or Hospital
Payment Exclusion Categories 1. Indirect payments where AM is unaware of identity of CR 2. Payments <$10 unless annual >$100 3. Product samples, vouchers, coupons 4. Educational materials/items that directly benefit patients or intended for patient use, value of services to educate patients 5. 90 day equipment loans 6. Items/services under contract warranty 7. Physician as patient
Continuing Medical Education • The Sunshine Act first included a specific exemption for accredited CME speaker fees if the program was accredited by one of five specific bodies. CMS deleted this original language, but effectively incorporated the CME exemption for speakers and attendees at accredited CME events. • Where sponsors do not “require, instruct, direct, or otherwise cause the [CME] event provider to provide the payment…to a covered recipient,” such payments are not reportable. CMS indicates manufacturers meet this threshold when they do not (1) select or pay the speaker directly, or (2) provide the CME provider with a distinct list of speakers to consider. • CMS notes they “will provide sub-regulatory guidance specifying tuition fees provided to physician attendees that have been generally subsidized at continuing education events by manufacturers are not expected to be reported.”
Review & Dispute • Prior to data publication in June 2015, register with the Open Payments system at cms.gov/openpayments in order to review data that will be made public, resolve data disputes, and request data corrections during the 45-day review and dispute period. • The Open Payments system will alert the reporting applicable manufacturer or GPO of the dispute. After being alerted, the AM or GPO will work with you directly to resolve the dispute. Any data that needs to be changed will be re-reported. AMs and GPOs then have 15 days to resolve and submit corrections. Disputed data that is not resolved by the end of the 15-day period will be published on the public website, but will be marked as disputed. • In 2014 only 4.8 percent of physicians and 29.8 percent of hospitals registered to review their data
2013 Data
What Can We Glean From Year 1? A lot of missing payments Yet to Be Percent Entity Total Identified Reported Missing Physicians 546,000 360,000 186,000 34.1% Teaching Hospitals 1,360 873 487 35.8% AM’s and GPO’s 1,419 1379 40 02.8% Records 4,400,000, 2,700,000 1,700,000 38.7% Amounts $3.5 Billion $1.3 Billion $2.2 Billion 62.8% Does not include $1.1 billion of disputes and delayed research (full total = $4.6 billion) Source: Compiled from U.S. Department of Health & Human Services data openpaymentsdata.cms.gov
Many Payments Lack Names Citing data inconsistencies and uncertainty, the federal government withheld the names of doctors and hospitals for 40% of payments. This chart shows the percent of money that was withheld. – ProPublica 10/1/14
Most Payments Were Very Small Payments Number Greater than $100, Less than $10, <$1.00 24,897 356,617, 14% 366,113, 14% <$.50 9,437 <$.01 646 Between $20- $100, 562,241, 21% Between $10-$15, Between $15-$20, 875,887, 33% 465,816, 18% Source: Compiled from U.S. Department of Health & Human Services data openpaymentsdata.cms.gov
Estimate to Collect Information • Centers for Medicare and Medicaid Services estimated that the program would cost physicians and industry $629,479,56 1 over 3 years Source: Open Payments Final Rule, Federal Register February 2013
Payments by Recipient Type [VALUE], [VALUE], [PERCENTAGE] [PERCENTAGE] Physicians Teaching Hospitals
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