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CMS Rule Would Make Drug, Device Makers’ Payments to Docs Transparent

Cheryl Clark, for HealthLeaders Media, December 15, 2011

The proposed rule would also require the disclosure of physician's, or immediate family members of a physician, ownership or investment interests in applicable manufacturers and group purchasing organizations.

Drugs and biologicals are defined as those which require prescriptions and which are covered by Medicare, Medicaid or the Children's Health Insurance Program, but not over-the-counter products.

"Collaboration among physicians, teaching hospitals, and industry manufacturers may contribute to the design and delivery of life-saving drugs and devices," the proposed rule begins.

"However, while some collaboration is beneficial to the continued innovation and improvement of our health care system, payments from manufacturers to physicians and teaching hospitals can also introduce conflicts of interests that may influence research education, and clinical decision-making in ways that compromise clinical integrity and patient care, and may lead to increased health care costs."

The Affordable Care Act provides that violators of the reporting requirements will be subject to civil monetary penalties (CMPs), capped at $150,000 annually for failing to report, and $1,000,000 for knowingly failing to report.

The proposed rule goes into detail about how a manufacturing company of a medical product determines whether it will have to report a financial interaction with a particular doctor.

"For example, if once during the calendar year, a sales representative from an applicable manufacturer brings $25 worth of bagels and coffee to a solo physician's office for a morning meeting, regardless of the number of individuals who partake (such as non-covered recipient staff members), the per covered recipient cost is $25. Since this falls above the $10 minimum threshold for reporting a payment or other transfer of value ... this meal must be reported.

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3 comments on "CMS Rule Would Make Gifts to Docs Transparent"


Andre J. Pagliaro, MD (12/28/2011 at 9:10 PM)
Does the government list and detail all payments, gifts, etc.that any elected politician, or official is given? Or government employee's that are responsible for making decisions regarding government contracts, suppliers, etc. I would like to know if that transparency is present. For some reason it seems that "physicians" are considered so easily manipulated that a $10 dollar lunch, a pen, or perhaps a educational course (througth a company) will cause us to make choices that may not be in a patient's best interest. One should remember that our best interests are also those of the patient's. Good outcomes, satisfied patients, and lower complications benefit "all" involved in the practice of medicine. That hardly seems to be the case in government. Do they face their constituents on a daily basis? I think not. Congress and the U.S. Government, as a whole, has the lowest approval level of all time.

douglas wright (12/19/2011 at 12:34 PM)
so to be clear. if the hospital has a teaching program for radiologists and a rep picks up the $10 lunch tab in the cafeteria for the neurosurgeon, this should be reported??

Mintz Levin Member Tom Crane (12/15/2011 at 11:59 AM)
"This long-overdue regulation implements the so-called 'Sunshine Act', which requires a variety of disclosures of financial ties between pharmaceutical and medical device manufacturers and physicians and teaching hospitals. Because of the delays in issuing this proposed rule, CMS sensibly has decided to postpone the January 1, 2012 start date for data collection until a final rule is published. As with most voluminous regulations, CMS has made a number of key interpretations that will need to be closely reviewed. Importantly, in several areas CMS has decided that if manufacturers have disclosable financial arrangements with covered recipients, arrangements that are otherwise accepted, such as de minimus amounts, need to be disclosed as well. Similarly, if a medical device manufacturer has both disclosable devices (ones that are subject to pre-market approval) and exempt devices, it must disclose financial arrangements with covered recipients associated with all of its devices."