CMS Delays Implementation of 'Sunshine Act'

Proposed Rule Sets New Deadline of March 2013

January 05, 2012 05:10 pm Matt Brown
[Stock Photo-Man opening door to sunshine]

As laid out in one provision of the Patient Protection and Affordable Care Act,( any gift or payment of more than $10 to physicians from a pharmaceutical or medical device industry member eventually will be reported publicly. But it won't happen in 2012.

When CMS published its notice of proposed rulemaking( for that provision on Dec. 19, the original Jan. 1, 2012, implementation deadline for the so-called Sunshine Act evaporated.

According to Robert Bennett, the AAFP's federal regulatory manager, CMS' proposal means that drug and device manufacturers and group purchasing organizations, or GPOs, do not need to begin data collection until final regulations are issued.

"Essentially, what CMS has done here is indicate that data collection will not begin in 2012," Bennett said. "So, for now, there's no need to worry, because it's (only) a proposed regulation."

The delay, however, has drawn criticism from some politicians. The sponsors of the original stand-alone legislation, known as the Physician Payments Sunshine Act, that later was rolled into the Affordable Care Act -- Sens. Charles Grassley, R-Iowa, and Herb Kohl, D-Wis. -- wrote a joint letter( to outgoing CMS Administrator Donald Berwick, M.D., on Oct. 3, demanding to know why publication of procedures to implement the provision had been delayed beyond the Oct. 1, 2011, deadline outlined in the health reform law. Berwick's response( three weeks later included no timeline.

story highlights

  • A recent CMS notice of proposed rulemaking is pushing back implementation of a section of the Patient Protection and Affordable Care Act that governs certain physician-industry interactions to March 2013.
  • Affected manufacturers will be responsible for collecting and reporting data on cash payments or other "transfers of value" they made to physicians and other covered entities to CMS.
  • Physicians will get a 45-day review period to comment and contest anything with which they do not agree.

In a Dec. 14 press release( announcing the release of the proposed rule, CMS said that -- depending on the timing of the final rule -- it is proposing that manufacturers and GPOs be required to submit partial-year data on March 31, 2013. After that, the agency will aggregate the data "at the individual physician and teaching hospital level" before then providing a 45-day review period for physicians and other covered entities to contest any data with which they do not agree. The results will be made available to the public by Sept. 30, 2013.

"Under the proposal, the burden is on the manufacturer to report the information," Bennett said. "Regarding the review period, I wonder how our physicians are going to have time to do all of that."

CMS will accept comments on the proposed rule until Feb. 17, 2012. The Academy has been monitoring the issue for some time and, according to Bennett, will comment on the proposed rule before the deadline.

Bennett said other items of note include the fact that, despite the time frame noted, CMS indicates that some manufacturers and GPOs may begin to collect certain data voluntarily this year. In addition, CMS is excluding OTC drugs and Class I and II devices, such as tongue depressors and elastic bandages, from the reporting requirements, choosing instead to limit reporting to drugs or biologicals that require a prescription.

According to the CMS proposal, each report must include the following elements:

  • recipient's name;
  • recipient's business address, as well as specialty and National Provider Identifier number, if appropriate;
  • amount of payment;
  • date of payment;
  • form and nature of payment, including
    • consulting fees,
    • compensation for services other than consulting,
    • honoraria,
    • gifts,
    • entertainment,
    • food,
    • travel,
    • education,
    • research,
    • charitable contributions,
    • royalties or licenses,
    • current or prospective ownership or investment interest,
    • direct compensation for serving as faculty or as a speaker for a medical education program (including CME), and
    • grants;
  • description of associated covered items; and
  • any other information deemed appropriate.

In the release, CMS said it estimates that "roughly 150 drug or biologic manufacturers, 1,000 device or medical supply manufacturers, and 420 GPOs will be required to submit information" on an annual basis pursuant to the provision.

Bennett said is important to note that, although implementation is months down the road, the new rules eventually will affect all physicians, regardless of specialty.