Physician Payment Sunshine Act: Phazysician Congressman Ask CMS for Changes to Proposed Regulations

 

Since the Centers for Medicare and Medicaid Services (CMS) announced that it would be delaying the collection of payment data under the Physician Payment Sunshine Act, there has not been a lot of activity surrounding the final regulations.  We previously reported that CMS is putting together a working group to ensure that the final regulations are issued with input from all stakeholders.  

The Sunshine act requires that all drug, medical device, and medical supply manufacturers disclose every payment or object above $10 allocated to physicians and teaching hospitals.  

While CMS is reaching out to stakeholders affected by the Sunshine Act, a group of 8 medical members from Congress recently sent a letter to Marilyn Tavenner, Acting Administrator of CMS, expressing their concerns over the proposed Sunshine rules.  

The members from the House included all physicians and one nurse, which comprise Representatives Phil Gingery, MD (GA), Michael Burgess, MD (TX), Ann Marie Buerkle, RN (NY), Dan Benishek, MD (MI), Andy Harris , MD (MD), Philip Roe, MD (TN), John Fleming, MD (LA) and Paul Broun, MD (GA).  

In their letter, the members recognized that the rule “calls for additional reporting of pharmaceutical payments to groups including continuing medical education (CME) providers, professional medical associations, patient advocacy groups, and non-profits.”  The letter expressed concern that the proposed regulations “could cause a number of unintended consequences” that if left unaddressed, will “negatively impact patient care and the practice of medicine.”  Specifically, the Representatives highlighted four concerns. 

First, the letter pointed out the overwhelming administrative burden for companies and providers to comply with the Sunshine Act.  The letter noted how the complexities such as third party payments, global companies with multiple affiliates, and accounting requirements that call for companies to track the actions of providers during meetings – such as how much food an individual ate when in a group setting in order to calculate the foods worth – “will force companies and providers to spend limited resources on compliance lawyers and administrative staff rather than strategies to improve patient care and outcomes.”  

Interestingly, the authors noted that nothing in the Sunshine Act prohibits companies from passing on the data collection to medical providers, which could create more administrative burdens for doctors, directing valuable time they have to care for patient and placing additional financial strain on fledgling medical practices. 

Second, the letter recognized that the failure to exempt accredited CME events and non-CME speaking engagements in the proposed rule will end company participation in CME events, especially when the focus on the seminar relates to advancements in medical technology.   

The members of Congress recognized the importance of CME as a “valuable source” for providers to help support “their efforts to provide the highest quality health care to their patients.  Consequently, the authors stated their fears that if company participation in CME events is decreased further, “the primary means by which medical providers keep abreast of advancements in patient care will no longer exist.” 

Accordingly, “with no equitable alternative available,” the members noted the “negative impacts on patients” this kind of change would have, especially for rural providers, whose CME opportunities are more limited than those practicing in urban areas. 

Third, the members of Congress noted that the Sunshine Act will have an adverse impact on medical research in the U.S.  They pointed to a recently survey from the Association of Clinical Research Organizations (ACRO) which found that roughly 24% of physicians who conduct research and clinical trials for industry would be less likely to participate if their payments from such work were made public. 

One reason attributed to this finding is that compliance with the regulation would provide a distorted view of provider compensation resulting from this type of work.  Specifically, the members recognized that given the way the rule is written now, a distorted view of drug and device research would result because the full payment would be attributed to a researcher, even though the individual only receives a percentage of the total payment, with the rest going towards the cost of running the trial.  This would “stifle innovation due to the appearance of impropriety.”  

In addition, the members emphasized their concern about the impact on “small manufacturing, medical device and pharmaceutical companies,” who will also face a challenge that could result in job loss and operations moving overseas as companies relocate new research development.   They recognized how CMS estimates that small manufacturers would need to dedicate 50 percent of their employee’s times just to comply with the reporting requirements. 

Finally, the letter recognizes that compliance with the sunshine act will cost billions of dollars for both industry and the federal government.  Specifically, they noted that the potential for high penalties and the low threshold for reporting will result in “high penalties” that will cause over reporting, which will also lead to greater costs for CMS.  In addition, “the threats of fines and the additional resources required of industry to be in compliance with the rule will have a dramatic impact on medical innovation as well.”  The members of Congress emphasized the fact that “accounting changes and internal controls necessary to track the actions of individual providers will create an estimated $200 million dollar burden per applicable manufacturer – costs that directly threaten medical innovation and job creation in this country.”  

Ultimately, the congressional members asked CMS to allow the appropriate congressional committees of jurisdiction to have a chance to review the proposed rule and its impact on patients and the health system before publishing any final details.  

The CME Coalition has been active in educating congressional members on the role of CME and sunshine.  

These are reasonable requests and we are hopeful that CMS will take these suggestions into serious consideration.