MDNews - Cleveland-Akron-Canton

Physician Payment Sunshine Act Signals New Dawn for Compliance By Joseph J. Feltes, JD O NCE UPON A time, physi- cians and their families used to be able to enjoy exotic cruises sponsored by pharmaceutical companies where their only obligation, it seems, was to sign in briefly at sparsely attended meetings before embarking on offshore adventures. It's been awhile since the sun slowly set on the wake of the last ship's sybaritic junket. Today, the Federal Physician Payment Sunshine Act — part of national health- care reform — signals a new dawn of transparency, compliance obligations, and regulatory scrutiny. Beginning January 1, 2012, manufacturers of drugs, devices, biologicals or medical supplies, covered by Medicare, Medicaid or other federal healthcare program, must report to the Department of Health and Human Services all payments or transfers of value they make to physicians or teaching hospitals. The Sunshine Act applies to payments or transfers of value covering a broad array of activities, including: consult- ing fees; compensation for services other than consulting; honoraria; gifts; entertainment; food; travel (including specifi ed destinations); education and research; charitable contributions; royal- ties or licenses; current or prospective ownership or investment interests (other than through publicly traded securities or mutual funds); direct compensation for serving as faculty or as a speaker for medical education programs; grants; or falling within the catchall "any other nature of payment or other transfer of value as defi ned by the Secretary of HHS." Additionally, if the payment or transfer of value relates to marketing, education, or research which pertains to a covered drug, biological, device or supply, that also must be reported, along with the name of the covered product. Remaining outside the aura are certain excluded items that need not have to be reported, such as the transfer of items having a value of less than $10 (unless the items exceed an annual aggregate of $100); product samples for patient use not intended to be sold; educational materials that directly benefi t patients or are intended for patient use; the loan of a covered device for 90 days or less for evaluation purposes; items or services provided under a contractual warranty; certain discounts and rebates; and in- kind items used to provide charity care, to name a few. Covered manufacturers must disclose to the Secretary in electronic form the name of the physician (or teaching hospital); the physician's business address, specialty and National Provider Identifi er; the amount of payment or value of transfer; the dates on which payments or transfers are made; a description of whether payment or transfer was made in cash or cash equivalents, in-kind items or services, or stocks or stock options. This information will be stored in a database. While the burden of reporting rests with covered manufacturers, access to and use of the electronic information stored in the database can be accessed by the media, consumers, the Offi ce for Inspector General, and by prosecutors. That could pose potential liability risk to physicians for non-compliance with federal Anti-Kickback (illegal remunera- tion), the Stark laws (fi nancial interest), or the False Claims Act (ill-gotten gain). It also could create potential reputational 46 | Cleveland-Akron-Canton MD NEWS MDNEWS.COM NOVEMBER-DECEMBER 2011 damage — fairly or unfairly — if it were to appear that research was fl awed or a physician's choice of drug was infl uenced by payments or other transfers of value. The Wall Street Journal, in an inves- tigational piece (December 20, 2010), reported that five spine surgeons at Norton Hospital in Louisville, Kentucky, who performed the third-most spinal fusions of Medicare patients in the coun- try, had received more than $7 million in "royalties" from Medtronic, the nation's biggest manufacturer of spinal implants. The WSJ indicated that it had "mined" certain Medicare databases as the source of its exposé. The new Sunshine Act likely will eliminate the need to dig deeply, since the information will be collected in one database, there for the picking. Critics of the law, including Thomas Peter Stossel, MD, Professor of Medicine at Harvard Medical School, objects that the term "Sunshine" carries with it the "implicit aura of corruption," which indeed is unfortunate. Obviously, not all payments or trans- fers of value to physicians or teaching hospitals are tantamount to, or result in, a confl ict of interest, breach of professional ethics in the selection of drugs or medical devices, or a violation of federal fraud and abuse laws. Physicians should not cease speaking, participating in clinical trials, and otherwise collaborating with manufacturers. But, physicians need to be mindful of the risk of exposure the Sunshine Act presents, and take prudent measures, so they do not get burned. Joe Feltes is an attorney with Buckingham, Doolittle & Burroughs in Canton and a member of its Health & Medicine Practice Group. Mr. Feltes is also the Managing partner of Buckingham Canton. n

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