Healthcare Business News

Clock still ticking on overdue Sunshine Act rule

By Jaimy Lee
Posted: January 3, 2013 - 12:30 pm ET

The CMS missed its own 2012 deadline to issue the final rule for a regulation that aims to make financial relationships between healthcare providers and manufacturers more transparent.

The Physician Payments Sunshine Act—a provision of the Patient Protection and Affordable Care Act—requires drug and device companies to report payments or gifts given to physicians and teaching hospitals.

It also mandates that manufacturers and group purchasing organizations disclose physician ownership and investment interests.

However, multiple delays in the rulemaking process mean that data collection is not likely to begin until well into this year and that the data will not be publicly available until 2014. The original statute called for draft regulations on data reporting and collection to be issued in October 2011, for data collection to begin in January 2012 and for data to be made public starting in 2013.

"We are now 15 months past the statutory deadline," said Dr. Daniel Carlat, director of the Pew Prescription Project, an organization that advocates for transparency in relationships between physicians and industry. "At this point, it's clear that [data on] payments won't be collected until 2013 and possibly late in 2013."

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On Nov. 27, the CMS submitted its final rule to the Office of Management and Budget, which has 90 days to review the regulation. The CMS had said last year that it intended to release the final rule by the end of 2012 rather than in June of that year.

"Given the importance of this rule, we are working to issue this as quickly as possible," a CMS spokeswoman said in an e-mailed statement this week.

The delays have frustrated lawmakers, including Sens. Charles Grassley (R-Iowa) and Herb Kohl (D-Wis.), who authored the legislation, as well as the drug and device manufacturers that are responsible for gathering and reporting data.

"It will be two years in March since the Sunshine Act was enacted," Sen. Grassley said in a statement to Modern Healthcare. "Two years is a long time for pretty straightforward regulations. The administration hasn't been forthcoming about the reasons for the delay."

During a Senate Aging Committee round table in September, Sen. Richard Blumenthal (D-Conn.) said he expected to see "some finality and certainty and commitment" around the time frame for data collection after a CMS official said the agency hoped some data collection would occur in 2013.

The complexity of the regulation, including its impact on a wide-ranging group of stakeholders and the scope of the data collection, is often cited as one reason for the delays.

During the 60-day comment period, the CMS received more than 300 comment letters and said the extension of the final rule's deadline to the end of 2012 would provide the agency 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."

Some drug and device manufacturers already report varying degrees of information about their financial relationships with physicians. Certain companies are bound to do so by corporate integrity agreements. Others voluntarily disclose elements of their financial relationships with physicians.

Medtronic, a Minneapolis-based device manufacturer, voluntarily publishes aggregate payments of at least $5,000 paid to physicians, while the biotechnology giant Amgen will be required starting in June to post information on its website about payments it makes to physicians as part of a civil settlement reached over the illegal marketing of its anemia drug Aranesp.

"We are quite concerned and disappointed," said Marjorie Powell, senior assistant general counsel for the Pharmaceutical Research and Manufacturers of America. "What that means for companies is continued uncertainty about what they need to be planning for."

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