‘Sunshine rule’ takes effect

August 19, 2013

New provisions will impact industry-practitioner relationships

Data collection began Aug. 1 as part of the Centers for Medicare & Medicaid Services (CMS) “Sunshine rule” announced in February. The new rule is designed to increase public awareness of any financial relationships between drug or medical device manufacturers and health care providers.

The rule finalizes Affordable Care Act provisions that require manufacturers of drugs, devices, biologicals, and medical supplies covered by Medicare, Medicaid, or the federal Children’s Health Insurance Program (CHIP) to report payments or other transfers of value they make to physicians and teaching hospitals to CMS.

Applicable manufacturers and group purchasing organizations (GPOs) will report the data for August through December 2013 to the CMS by March 31, 2014.

The CMS will release the data on a public website by Sept. 30, 2014.

The AOA Ethics and Value Committee is studying the new rule and plans to issue a “white paper” on the new reporting program within the next few months.

Often referred to as the “sunshine rule,” the provision specifically requires reporting by industry of:

  • Cash or a cash equivalent.
  • In-kind items or services.
  • Stock, a stock option, or any other ownership interest, dividend, profit, or other return on investment, and
  • “Any other form of payment or other transfer of value.”

Among the “other” forms of payment specifically covered by the rule are: consulting fees; compensation for services other than consulting; honoraria; gifts; entertainment; food; travel (including the specified destinations); education; research; charitable contribution; royalty or license; current or prospective ownership o investment interest; direct compensation for serving as faculty or as a speaker for a medical education program; grants; and any other payment or other transfer of value.

The new reporting program is intended to help reduce the potential for conflicts of interest that physicians or teaching hospitals could face as a result of their relationships with manufacturers, according to the CMS.

“You should know when your doctor has a financial relationship with the companies that manufacture or supply the medicines or medical devices you may need,” said Peter Budetti, M.D., J.D., CMS deputy administrator for program integrity. “Disclosure of these relationships allows patients to have more informed discussions with their doctors.”
Doctors, as well as manufacturers, GPOs and teaching hospitals, will have the opportunity to review and correct reported information prior to publication.

The CMS is developing an electronic system to facilitate the reporting process.

The final rule can be accessed at www.federalregister.gov/public-inspection.

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