Bright-Light Scrutiny on Payments by Drug and Device Makers to Physicians and Teaching Hospitals and Certain Physician Ownership Interests
The Centers for Medicare and Medicaid Services (CMS) published in the Federal Register on December 19, 2011, proposed regulations under the federal Physician Payment Sunshine Act (the "Act"), which Congress passed as part of the 2010 healthcare reform package. The Act requires drug, medical device and other manufacturers to collect data on and annually report to CMS payments to physicians and teaching hospitals. It also requires that these manufacturers, as well as drug and device supplier group purchasing organizations (GPOs), annually report physician ownership and investment interests. Under the Act, data collection activities were to have commenced on January 1, 2012, but CMS was late in issuing regulations. Now, manufacturers and GPOs do not have to begin collecting data until after final regulations are issued, which according to CMS will be sometime in 2012. The first reporting deadline for data collected in 2012 will be March 31, 2013, according to the proposed regulations.
The Act is designed to promote transparency in the relationships between healthcare drug and device manufacturers and physicians and big teaching hospitals, as well as to limit conflicts of interest between these parties. Although manufacturers, physicians and teaching hospitals have been aware since the passage of the Act that these regulations were coming, their effect will be significant. Each covered manufacturer and GPO will have to dedicate staff to collect the data, make the reports and review the data for accuracy before the information is made public. Physicians and teaching hospitals will also have to use staff time to review the data before publication. The consequences of not reporting are considerable, subjecting a non-reporter to civil fines and penalties, from $1,000 for a simple inaccuracy, up to $1 million for a knowing failure to report.
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