APA Shines Spotlight on Flaws in Sunshine Act

As currently written, the Centers for Medicare and Medicaid Services’ (CMS) proposal to reduce the risk of conflicts of interest between physicians and the pharmaceutical industry would be overly burdensome for physicians and potentially undermine their due-process rights.

So contends APA in regulatory comments submitted last month in response to CMS’s proposed rule on the Physician Payments Sunshine Act, which was developed by Sens. Herb Kohl (D-Wis.) and Charles Grassley (R-Iowa) and signed into law as Section 6002 of the Patient Protection and Affordable Care Act.

The proposed rule would require manufacturers of drugs, medical devices, supplies, and biologicals covered by Medicare, Medicaid, or the Children’s Health Insurance Program to annually disclose payments or other transfers of value they make to physicians and teaching hospitals over the course of the preceding year.

While APA “strongly supports” the intent of the Sunshine Act, comments by APA Medical Director James H. Scully Jr., M.D., stressed the need to ensure that “greater transparency does not unduly burden and adversely impact physicians.”

Among APA’s specific recommendations are several focused on the notification, review, and resolution of manufacturers’ transparency reports. APA is urging CMS to revise the rule so that physicians or teaching hospitals are provided with “real time” notice of a manufacturer’s report of payments or transfers of value made to them. This would allow for the timely correction of any erroneous data, Scully pointed out.

APA also disagrees with CMS’s proposal to limit physicians’ review of manufacturers’ reports to a 45-day window. Instituting such a statute of limitations negatively affects physicians’ ability to identify and correct reporting errors that could potentially damage their reputation, Scully noted.

Similarly, APA argues that a presumption of error identified in any report should fall on the manufacturer, not the physician responding to the report. Accordingly, Scully recommended that CMS institute an arbitration system that allows for “the swift resolution of reporting disputes” and does not impose additional costs on physicians.

The expense incurred by physicians in relation to the monitoring of manufacturers’ annual transparency reports is another concern of APA. Scully questioned CMS’s estimate that a physician will need to spend only one hour per year, on average, reviewing these reports for errors.

Also at issue is the means by which CMS calculated report-monitoring costs, based on an assumption that many physicians will be able to delegate their review responsibilities to staff members.

“CMS fails to account for the time physicians will have to spend collecting and tracking the exchanges they have with applicable manufacturers, so they or their employees can effectively examine the validity of the manufacturers’ published reports,” wrote Scully. “A physician’s time is worth much more than the $72 per hour CMS uses in its estimated cost analysis.”

In regard to implementation of a new reporting system, APA requests that CMS not require applicable manufacturers to begin filing transparency reports until January 1, 2013. This would allow sufficient time for manufacturers and physicians to be made aware of and prepare for compliance with reporting requirements following the release of a final rule, Scully said.  

CMS’s proposed rule on the Physician Payments Sunshine Act is posted at www.federalregister.gov/articles/2011/12/19/2011-32244/medicare-medicaid-childrens-health-insurance-programs-transparency-reports-and-reporting-of. APA’s response to the proposed rule is posted at www.psych.org/MainMenu/AdvocacyGovernmentRelations/GovernmentRelations/RegulatoryComments/Physician-Payments-Sunshine-Act-Proposed-Rule-APA-Comment-02-08-12.aspx?FT=.pdf.