Healthcare Business News

CMS issues long-delayed rule on Sunshine Act

By Jaimy Lee
Posted: February 1, 2013 - 5:00 pm ET

The CMS has issued a long-delayed final rule for the Physician Payments Sunshine Act (PDF), setting out a timeline for implementation that is a year past what the healthcare reform law required.

The Sunshine Act aims to increase transparency and reduce the potential for conflicts of interest by gathering data about financial relationships between healthcare providers and manufacturers and making it available to the public. The final rule was released Friday.

Starting Aug. 1, drug and device companies will be required to collect data about payments, gifts and other transfers of value given to physicians and teaching hospitals.

In addition, manufacturers and group purchasing organizations will be responsible for reporting physician ownership and investment interests.

“Disclosure brings about accountability, and accountability will strengthen the credibility of medical research, the marketing of ideas and, ultimately, the practice of medicine,” Sen. Chuck Grassley (R-Iowa), who co-authored the legislation, said in a statement. “The lack of transparency regarding payments made by the pharmaceutical and medical device community to physicians has created a culture that this law should begin to change substantially.”

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The final rule requires manufacturers and GPOs to report the first round of data collection to the CMS by March 31, 2014. The data will then be posted online by Sept. 30, 2014, one year after what the original statute required. The program's first round of reporting will be limited to five months of data rather than a full year.

A CMS spokeswoman said in an e-mail that the timeline was pushed back in order to give manufacturers and GPOs “sufficient time to prepare.”

“This rule allows a long-delayed transparency measure to take effect,” said Allan Coukell, director of medical programs at the Pew Charitable Trusts, in a statement.

The rulemaking process has been delayed multiple times. Most recently, the CMS missed its own deadline to issue the final rule by the end of 2012. However, both the CMS, which received 373 letters during the comment period, and other stakeholders say that the regulation is complex.

Grassley also said he plans to stay vigilant about the law's implementation, especially in light of previous delays.

In a statement, Christopher White, general counsel and senior executive vice president of the Advanced Medical Technology Association, said the additional time will allow manufacturers to establish compliant business systems.

“Strong ethical standards are critical to ensuring appropriate collaboration between the medical device industry and physicians,” White said in the statement. “Additionally, because the effectiveness of a device often depends on a physician's skill in using it, it is essential that physicians receive education and training.”

The program is expected to cost $269 million in its first year and $180 million every year after.

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