California Legislation Proposes Requirement to Make Patients Aware of Open Payments

Earlier this year, the California Assembly passed legislation that would require physicians in California to inform their patients on an annual basis about any money or gifts they receive from drug and medical device companies for the prior three years.

The bill, AB-1278, would require physicians to disclose any payments or other transfers of value received from pharmaceutical and device companies in writing to each patient prior to prescribing any drugs or devices manufactured or distributed by the company. Physicians would also be required to post an open payments database notice in each location where the licensee practices in a conspicuous place, likely to be seen by all patients who enter the office and post the same notice on its website. For physicians that are employed by a health care employer, the same requirements extend to the employer. The only physicians exempt from the requirement are those who work in hospital emergency departments. Failure to follow the law as proposed would result in unprofessional conduct.

The Reason Behind the Bill

Adrin Nazarian, Assemblyman from Sherman Oaks, proposed the legislation after meeting with one of his constituents who suffered a failed breast reconstruction surgery. The constituent, Wendy Knecht, found that the device used in her surgery failed and left her in chronic pain and disfigurement. She had to undergo three additional surgeries to remove the device and repair the damage caused by its failure.

After the surgeries, Ms. Knecht learned that the surgeon who performed the initial surgery had received nearly a half a million dollars over the course of four years from the device manufacturer.

Nazarian believes that had Ms. Knecht “been aware of this website, she would have checked it and she would have asked questions about it.” He also believes that she “would have gone into the surgery much better informed and she may have chosen to go with another surgeon.”

Knecht echoes that sentiment, saying that she would not have consented to the procedure if she knew about the financial ties while still noting that the proposed legislation is not intended to shame or expose physicians or surgeons (her husband is a gastroenterologist), but is about transparency. She believes that patients will find themselves across a spectrum once the information is more talked about: some patients may not care, others may care and want a second opinion, and still others may appreciate that a doctor has received information about a drug or device directly from the manufacturer.

Support and Opposition

The Medical Board of California voted to support the legislation at its May quarterly meeting, despite some board members questioning whether the bill would require physicians to interrupt patient visits to see if they have received money from a specific company. According to proponents of the legislation, as it currently stands, doctors would not need to interrupt patient visits but including a list in the waiting room packets that patients have to complete and sign would suffice.

It is likely that the California Medical Association and pharmaceutical and device manufacturers will oppose the legislation. During its May quarterly meeting, Emily Hughes, a legislative advocate for the Association, spoke out against it, saying while CMA generally supports displaying information about Open Payments in doctors’ offices, the bill might wind up creating an administrative burden on individual doctors and distract from the reason the patient sought care in the first place. She also noted that it might wind up damaging physician-patient relationships and disparage doctors for attending continuing education that is paid for by companies.

The legislation has passed the Assembly and now must pass the state Senate before becoming law.