The Affordable Care Act (ACA), which became Public Law 111-148 on March 23, 2010, included Section 6002, a provision regarding pharmaceutical and device industry reporting of payments to physicians known as the Physician Payment Sunshine Provision. The provision creates new reporting requirements for drug, biologic and medical device companies to document and report all payments and transfers of value to physicians and teaching hospitals. In addition the section requires the reporting of physician ownership interests in hospitals and medical facilities.
Last week however, Representative Doc Hastings (R-WA) introduced HR 1159 to repeal Section 6001 (preventing physician ownership of hospitals) and 6002, including the transparency reports and reporting of physician ownership or investment interests, as well as certain provisions of ACA relating to the limitation on the Medicare exception to the prohibition on certain physician referrals for hospitals. Presently, the bill has 10 bi-partisan co-sponsors.
For now, the bill has been referred to the Committee on Energy and Commerce and the Committee on Ways and Means. Congress will not be in session until next week, so there are no hearings scheduled for this bill as of today.
Background
Section 6002 is set to begin in 2012, with the first report by manufacturers due March 31, 2013. There is a minimum value of $10/payment or $100/year on what has to be reported. The provision requires reporting by companies of long list of payments to healthcare providers and hospitals with residency programs. In addition there are requirements for reporting samples, and physician owner interests in medical facilities. All of these requirements will take significant effort to figure out especially the value of assets in privately held companies.
To top all this off, CMS in their call for input is considering a whole host of expansions beyond what congress required. Ultimately, it is unclear if other information will be required, and many of these questions will be answered when the regulations are finalized.
Dr. Michael Russell, president of Physician Hospitals of America and a partner of the physician-owned Texas Spine and Joint Hospital in Tyler noted that Hastings has called for repeal of transparency requirements because it’s unfair that physician-owned hospitals are required to disclose more data on its ownership arrangement than other institutions are required to. Russell said everyone should be subject to the same rules.
“We are 100% behind transparency and disclosure,” he said. “We are for transparency, and the more transparency, the better.
Comment
This creates a dilemma for small and midsize manufactures, GPO’s and physician owned hospitals as there are now three potential compliance scenarios.
A) CMS is considering expanding the current law through the regulatory process
B) The law stands as it is
C) The section or whole law is repealed
Congress should consider that transparency if adopted should be system wide, not selective and include payments and ownership interests from insurance companies, legal services, and other system payers.