CMS to Float Physician Reporting Rules on Pay from Drug, Device Firms

Philip Betbeze, November 4, 2011

The Patient Protection and Affordable Care Act is a huge document. As we all digest the many implications of accountable care organizations, value-based purchasing, and increased access to medical care for the previously uninsured, it’s easy to forget there are other important parts of the law.

One often-overlooked provision is Section 6002, which requires the public reporting of payments or other value transfers made to physicians and teaching hospitals by manufacturers and group purchasing organizations of drugs, devices, biologicals, and medical supplies that are covered by Medicare, Medicaid, or the Children’s Health Insurance Program.

Despite its more than 900-page length, the Act can be viewed as sort of a guideline for how lawmakers envision that healthcare should be delivered and measured. The real work of interpreting the law and translating it into policy and regulation is often done out of the media spotlight as the Centers for Medicare & Medicaid Services determines how each piece of the law will govern healthcare in practice.

The key to successful implementation is interpreting the intent of legislators in making the law. Of course, CMS offers plenty of opportunity for citizens, public interest groups, and industry mouthpieces to offer input into their interpretations of certain aspects of the law before creating final reporting and compliance guidelines. I’ll let you guess who’s best represented at these meetings.

Section 6002 is a provision in the Act that is intended to give consumers valuable information about their physicians' or hospitals' involvement in payments or other transfers of value from drugmakers and medical device manufacturers.

This provision comes from the perception that the non-public nature of such value transfers might  create doubts among patients about whose interests are being placed ahead of whose in decisions about the treatment of their illness.

Whether or not such deals most often passed the “smell test,” there is a widespread perception that such payments represent a key reason why healthcare costs so much, and beg the question of whether a $10,000 replacement hip that comes from a manufacturer with which a physician has a development deal is any better than a $5,000 one from a company that doesn’t pay him. And further, whether any of that might have influenced the physician’s recommendation of treatment. That’s not an easy conclusion to reach, but it’s impossible without the disclosure of financial relationships between the two.

Philip Betbeze

Philip Betbeze is the senior leadership editor at HealthLeaders Media.

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