As many health care providers are aware, the health care reform law (the “Patient Protection and Affordable Care Act,” or “ACA”) signed into law in March 2010 contained, among its numerous provisions, a requirement that pharmaceutical, medical device, biological, and medical supply manufacturers report to the U.S. Department of Health and Human Services (“HHS”) any “payment or other transfer of value” to physicians and teaching hospitals. This provision is focused on disclosure only and does not limit or prohibit these types of financial relationships. The information will be posted on a public government website and HHS is required to submit annual reports regarding the information to both Congress and each state. Although the burden falls on the manufacturer to collect and report the information, physicians should be aware that the key details of their relationships with these manufacturers will be publicly available.
In general, the law requires disclosure of payments whether cash or in-kind transfers to all physicians and teaching hospitals including: compensation, food, entertainment or gifts, travel, consulting fees, honoraria, research funding or grants, education or conference funding, stocks or stock options, ownership or investment interest, royalties or licenses, charitable contributions, and any other transfer of value as determined by HHS. The disclosure must contain the receiving physician’s name, address, and national provider identifier; and the value, date, form and nature of the payment using standardized descriptions for the payment types listed above. If a payment is specific to a covered drug, device, biological or medical supply, the name of that product must be reported. Only a provider’s NPI will be kept private. The law also contains exceptions for certain types of gifts or payments. Of course, the legislation also provided for financial penalties for failure to report – up to $150,000 annually and up to $1,000,000 for knowingly failing to report. The law required the collection of data to begin on January 1, 2012, with reporting to CMS to begin on March 31, 2013.
As is the case with any piece of legislation, the devil is in the details. The Centers for Medicare and Medicaid Services (“CMS”), a part of HHS, published regulations intended to implement these disclosure requirements. After receiving voluminous public comments to the proposed rules, CMS recently announced that it was delaying the implementation date for the collection of the required data until January 1, 2013. CMS intends to release its final rules later this year, which it says “will provide CMS with additional time to address operational and implementation issues in a thoughtful manner, and the ability to ensure the accuracy of the data that is collected.” Stay tuned!