March 28, 2011 – The Coalition for Healthcare Communication (CHC) and other stakeholders warned government regulators that they must be very careful to limit the scope of regulations that enforce the new “Sunshine Act” to avoid a serious regulatory burden on both the government and industry. Regulators also need to avoid sending a signal to the press and the public that collaboration between the medicines and device industries and medical providers is inherently bad, they asserted.

Indeed, the CHC strongly believes such collaborations improve patient care by providing enhanced communications that result in better use of medicines and devices with patients. Accordingly, Coalition Education Foundation Executive Director Jack Angel participated in last week’s call held by officials at the Centers for Medicare & Medicaid Services (CMS) to seek guidance on how to best implement Section 6002 of the Affordable Care Act. Section 6002 creates a national registry of gifts and payments to physicians, i.e., public reporting of payments/transfers made by manufacturers and group purchasing organizations of medical products covered by Medicare and Medicaid to physicians and teaching hospitals.

During a CMS Open Door Forum held March 24 to collect stakeholder input regarding that implementation, entitled “Open Door Forum on Transparency Reports and Reporting of Physician Ownership or Investment Interests,” Barbara Cebuhar, CMS Office of External Affairs, explained that CMS is working toward the publication of a draft regulation in 2011. She asked that call participants provide “insight and experience” on how to best craft transparency provisions.

“Transparency is appropriate,” the CHC’s Angel said, but only when financial relationships are not portrayed negatively, and when the data provided publicly are accurate and are put in the proper context. It’s also important that the costs of compliance are as low as possible in order to avoid increasing the cost of medical products.”  

Similar views were expressed by many industry stakeholders, who raised concerns about any potential expansion of the categories of payments and asked that CMS set clear requirements, allow for stakeholder review of any data before public dissemination and establish technological requirements for submission, review and correction.

“The process is already quite onerous,” said Michael D. Seidman, M.D., otolaryngology/ENT, at the Henry Ford Medical Group in the Detroit area. “Regulations should not further stifle innovation,” Seidman remarked.

Industry to CMS: No Expansion Necessary

In response to the first questions posed by CMS – whether other forms of payment or transfers of value should be considered as part of the draft regulation – several commenters stated that they were not aware of any need to expand the category, and that any expansion would be redundant.

Marjorie Powell, senior assistant general counsel at PhRMA, said that CMS should carefully consider the amount of transaction data that will be required to be collected, aggregated and reported under the currently defined forms of payment. “CMS is going to be inundated with transaction data. We have heard from one mid-size pharmaceutical company that it would expect to report up to one million transactions involving approximately 300,000 physicians in the first year alone.”

Requirements should be “very clear and simple for manufacturers to use and for CMS to compile,” Powell added, and should include a master list of teaching hospitals and physicians for whom payments must be reported. “Given the complexity of the statute as written, we encourage CMS to focus on getting proposed regulations prepared rather than on expanding the universe,” she said.

CMS also asked call participants to provide input on the definitions of the nature of payment or transfers of value and whether the agency should consider more than the 14 types of payment specified in the legislation or whether additional categories of information should be reported. Doug Petticord, executive director, Association of Clinical Research Professionals (ACRO), told CMS that ACRO’s answer “largely would be ‘no,’” and that it was “hard to see what additive value would be brought by new categories.”

Public Should Receive Contextual Information

A question from CMS about which types of information should be reported to the public and how it can maximize the use of collected information on its Website was met by industry comments about appropriate context for consumers. Sandi Dennis, deputy general counsel for BIO, advised CMS to include objective background for consumers, directed at targeted consumer audiences.

“We recommend that the agency conduct focus group research and consult with experts to ensure that the information provided is clearly defined and explained,” Dennis said, and that it is “useful and not misleading.” CMS also should consider creating a task force of industry members, providers and public advocates to help establish what contextual information should be included on the Website, she said.

Julie Cohen, vice president, governmental affairs, for AdvaMed, stated that although AdvaMed supports disclosure about relationships between medical technology companies and physicians, the organization wants to “ensure that consumers get accurate information,” including clear background information about why these relationships exist and benefit patients. “For example, physicians themselves are often the inventors of new technology. Other physicians provide valuable feedback, research and technical expertise to improve existing technology,” Cohen said.

“It’s also important to emphasize that physicians receive critical training both from companies and other skilled physicians so they can use and operate medical technology safely and effectively,” Cohen told CMS. “AdvaMed believes that the information provided in the public database should emphasize how these interactions contribute to continued medical advances in technology and to providing safe and effective medical care.” She also noted that companies should be permitted to provide additional context surrounding payments in the database, so that “patients can better understand the relationships that exist.”

Several other commenters requested that CMS work to ensure that the requirements neither stifle innovation nor chill relationships between companies and physicians. Also addressed was establishing a defined pathway for all entities to correct any data errors before information is publicly disseminated. Technical considerations, such as CMS possibly designing submission templates and providing data that is searchable and downloadable, also were presented. 

CMS has made a recording of the call available until midnight on March 28. It can be accessed by calling 1-800-642-1687 and referencing conference number 51513536. CMS also is accepting written comments sent to the following e-mail address through April 7 at: physiciansunshine@cms.hhs.gov.