Physician Payment Sunshine Act: American Medical Association Voices Concerns over Potential Implementation Issues

As we quietly wait for the final regulations to implement the Physician Payment Sunshine Act—which we expect could be released by the Centers for Medicare & Medicaid Services (CMS) any day now, the American Medical Association (AMA) recently published an editorial in amednews concerned about the potential implementation of these regulations. 

The Sunshine Act, part of the Affordable Care Act, requires manufacturers to submit a list of physicians and teaching hospitals who received from them a transfer of value of $10 or more, or multiple transfers of less than $10 that cumulatively exceeds $100. It also requires manufacturers to list any physicians, or their immediate family members, who hold ownership stakes in their companies. Some items, such as drug samples and educational materials intended for patients, are exempt from being reported. 

According to the American Medical Association  “The Sunshine Act, as written, could give physicians and their patients the chance to have an open conversation about why those relationships exist.  For example, in many cases they are related to physicians’ participation in clinical trials.  Such disclosure is in line with positions the American Medical Association has put forth calling for informed judgment for patients and a focus on their benefit, all the while requiring meaningful independence from industry for doctors.” 

The problem is, the AMA writes, that CMS “intends to have its Center for Program Integrity (CPI) — in plain language, its anti-fraud unit — carry out the Sunshine Act.  By putting the center in charge of the collection and distribution of public reports on physician-industry interactions, CMS is making it appear that it is now the ethical police of the profession.” 

“It creates the impression that any physician who appears on the list, no matter how limited financially or legitimate the nature of the interaction, is somehow engaged in behavior that could be seen as ethically or legally suspect.  Rather than encourage transparency, CMS’ proposed final rule could have a chilling effect on beneficial interactions between doctors and researchers that help advance medicine.

As a result, AMA argues that “CMS should leave data collection, reporting and appeals to another part of the agency and reserve CPI only for matters involving compliance with the law.” 

The AMA put forth its concerns about CMS’ action in an Oct. 10 letter to the agency’s acting administrator, Marilyn Tavenner. The letter, signed by AMA Executive Vice President and CEO James L. Madara, MD, stated AMA’s objections that CMS would: 

• Expand the act beyond its intentions by proposing that some indirect transfers, such as certified continuing medical education in which sponsoring manufacturers have no input into the content, speakers or attendees, be included in the reporting.
• Allow physicians to be listed as receiving payments or transfers if they were employed or affiliated by an organization that got them — even if those physicians individually never received them.
• Not provide physicians a sufficient mechanism for appealing or challenging any information appearing on the list.  Manufacturers submit the information and have 45 days to make any appeals, but physicians have no guarantees that they will see companies’ lists on an ongoing basis so they may make corrections.  AMA asserted that this process would deny physicians “substantive and procedural du process rights.” 

The letter recognized that the explicit purpose of the Sunshine Act “is to promote transparency, not to chill, or curb, otherwise appropriate interactions that advance the art and science of medicine.”  The AMA noted that “While not all transfers are subject to reporting under the Sunshine Act, the AMA provides ethical guidance that covers all transfers—including indirect ones.” 

The AMA also again reiterated that CMS is “Not Authorized by Statute to Expand Reporting to Indirect Transfers (Not Otherwise Specified in Statute) Such as Certified CME.”  Previously, AMA testified at the Sunshine Roundtable in support of exempting certified continuing medical education (CME) from Sunshine reporting.  The AMA recognized that by “opening the door to a far broader number of indirect transfers that are of questionable relevance, the proposed regulation would obscure significant interactions between industry and physicians and impose a significant paperwork burden.” 

The AMA rightfully asserted that CMS’ interpretation that indirect transfers that occur through certified CME is “not supported by statutory language.”  They emphasized that “CME is independent and manufacturers have no control or input into the content, the speakers, or the attendees. In light of the foregoing, certified CME is not covered by the Sunshine Act and CMS should make this clear.”  Furthermore, AMA pointed out that “there was broad agreement among the Senate Roundtable participants that requiring reporting on indirect transfers including certified CME would pose a significant administrative challenge and were not the type of transfers that most concern patients.” 

All of these issues become even more critical in light of CMS’ decision to elevate CPI as the one to implement the Sunshine Act.  “While the transparency reporting undoubtedly could provide information in some cases on transfers that violate professional ethical codes or even federal and state fraud and abuse laws, the purpose of the Sunshine Act registry is not to supplant the role of the profession in regulating ethical conduct or to create new fraud and abuse laws,” Dr. Madara wrote.  In fact, CMS said the same thing in its proposed final rule: “We recognize that disclosure alone is not sufficient to differentiate beneficial, legitimate financial relationships from those that create conflict of interests or are otherwise improper.” 

“An example laid out in the AMA letter is that suddenly there could be a stigma attached to industry-physician collaborations that facilitate the application of knowledge on the human genome. If physicians risk being seen as somehow engaging in untoward behavior because of who is managing a list, then it jeopardizes the sharing of information and resources for necessary and appropriate medical care.” 

At the Senate roundtable on the Sunshine Act, held in December 2011, a wide range of stakeholders agreed that the Sunshine Act is there to promote those ideals, not to chill or curb transactions that advance the art and science of medicine.  

Accordingly, the AMA maintained that “There is still time for CMS to rethink its rule in that light so that its list promotes openness and dialogue, not a climate of unwarranted suspicion.”  The AMA urged CMS to reconsider tasking the Center for Program Integrity with implementation of the final Sunshine Act regulation “because it will cause significant confusion about the purpose of the transparency reports and create a strong perception that anything contained in a transparency report presumptively raises ethical, fraud, abuse, and program integrity concerns.”

While the AMA appreciated that CPI has experience with the imposition of civil money penalties (which manufacturers potentially would be subject to if they fail to comply), AMA recommended “bifurcation of the responsibility whereby another component of the agency is responsible for the data collection, reporting, and appeals while CPI is referred compliance matters including enforcement.” 

Further, AMA expressed additional concerns that some transparency reports─a small number─could be used as evidence by CPI in its program integrity role and, yet, CPI would control the corrections and other elements of what would become evidence.  “This creates a strong perception of, if not an actual, conflict of interest where a component of an agency molds and generates the evidence that then is used by the very same component of the agency to establish violations of agency policies or fraud and abuse/program integrity laws.  The foregoing is mitigated through checks and balances and is not an uncommon practice and policy within the U.S. Department of Health and Human Services.”