Managing Your Practice

The Sunshine Act


This month, yet another new bureaucracy unfolds: Under the Physician Payment Sunshine Act – part of the Affordable Care Act – manufacturers of drugs, devices, and biological and medical supplies covered by federal health care programs are now required to begin reporting financial interactions with physicians and teaching hospitals to the Centers for Medicare and Medicaid Services.

Ownership or investment interests in the manufacturers by physicians and their family members also must be disclosed. Most of the data will be published online by September 2014.

In addition to reporting the type of financial exchange and the dollar amount, manufacturers are required to report the reason for the interaction, including consulting, food, ownership or investment interest, direct compensation for speakers at education programs (whether or not they are accredited or certified), and research. There are exclusions, including drug samples intended for distribution to patients. Medical students and residents are excluded entirely. You will be allowed to review your data and seek corrections before it is published; and you will have an additional 2 years to pursue corrections.

Compensation for conducting clinical trials will be reported, but not posted on the website until the product receives Food and Drug Administration approval, or until 4 years after the payment, whichever is earlier. Payments for trials involving a new indication for an approved drug will be posted immediately.

So what will be the likely effects on research, industry-sponsored meetings, meals provided by drug reps, and the like? The short answer is that no one knows. Much will depend on how the information is reported, and how patients interpret the data that they see – if they take notice at all.

Sunshine laws are already in effect in six states – California, Colorado, Massachusetts, Minnesota, Vermont, and West Virginia – and the District of Columbia. (Maine repealed its law in 2011.) Observers disagree on their impact. Data from Maine and West Virginia showed no significant changes in prescribing patterns after the laws took effect, according to a 2012 article in Archives of Internal Medicine (now JAMA Internal Medicine).

Evidence indicates that physicians have already decreased their industry interaction on their own: About a quarter of all private practices now refuse to see pharmaceutical reps; most medical schools prohibit samples, gifts, and on-site meals, and many prohibit on-site interaction of any kind between reps and residents.

How the disclosure legislation translates into physician-patient interaction remains equally unclear. Do patients think less of doctors who accept the occasional industry-sponsored lunch for their employees? Do they think more of doctors who conduct industry-sponsored clinical research? There are no objective data, so far as I know.

My guess – based on no evidence but 30 years of experience – is that attorneys, activists, and the occasional reporter will data-mine the website, but few patients will ever bother to visit. Nevertheless, you should prepare now to ensure the accuracy of anything posted about you when the database launches next year. Mark your calendar; the data must be reported to the CMS by March 31 annually, so you will need to set aside time each April or May to review it. If you have many or complex industry relationships, you should probably contact each of the manufacturers in January or February and ask to see the data before they are submitted. Then review the information again once the CMS gets it, to be sure nothing was changed. Maintaining accurate financial records has always been important, but it will be even more so now, to effectively dispute any inconsistencies.

If you don’t see drug reps or give sponsored talks, don’t assume that you won’t be on the website. Check anyway; you might be indirectly involved in compensation that you were not aware of, or you may have been reported in error.

Pharmaceutical companies face stiff penalties if they do not comply with the Sunshine Act. Those that fail to report can be fined up to $150,000 annually, and those fines can rise to $1 million for those that intentionally fail to report. This means that the information will be disclosed. If you have any financial relationships with the pharmaceutical industry, you will need to anticipate the implications of the increased scrutiny that may (or may not) result.

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J.

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