June 19, 2013 – The pharmaceutical industry needs to put strategies in place now to help them overcome the significant obstacles it will face as the Physician Payment Sunshine provisions of the Affordable Care Act kick in over the next year, according to speakers at a June 18 Webinar co-sponsored by the Coalition for Healthcare Communication and the Association of Medical Media.  

In particular, advertising agencies and publishers should be aware that Sunshine implementation “creates a huge professional relationship challenge,” according to Coalition Executive Director John Kamp. Other challenges include putting the collected data in context for the general public, interpreting several unclear provisions that seem contrary to the Act’s goals, educating doctors about the regulations, and putting systems and procedures in place to ensure data accuracy.

Data Accuracy, Communication Are Key

“Doctors are our key opinion leaders, so we must do this and do it well,” Kamp said at yesterday’s Webinar, “Preparing for Physician Payment Sunshine Implementation: A Primer for Agencies and Publishers.”  He explained that on Aug. 1, covered entities will begin collecting data on any “payment or transfer of value” (POTV) to doctors and teaching hospitals; reports on those data will be submitted to the Center for Medicare & Medicaid Services (CMS) starting March 31, 2014. CMS will post reports on its Website as of Sept. 30, 2014.

That database “will be a huge target for critics of industry, the press and plaintiff attorneys seeking to sue industry or doctors,” Kamp noted, adding that news outlets already are running articles – based on transparency reports that companies are posting on their Websites as part of corporate integrity agreements – that paint an unbalanced picture of industry’s relationship with healthcare providers. “We should assume that the press will be more active when the registry is up and running,” he said. “In fact, we should be certain of it.”

Because studies show that many physicians are still unaware of or unfamiliar with the specifics of the Sunshine final rules, the onus is on industry to ensure that implementation goes smoothly. For example, covered entities are responsible for tracking all POTVs, so they must be clear on what Kamp terms “the $10/$100 rule.” Under this provision, any expense of less than $10 is not reportable, but these expenses still must be tracked, because if a company spends more than $100 on one physician in a given year (albeit in less than $10 increments), then that amount must then be reported, he explained.

Accuracy in these reports is of the utmost importance, he added, because some physicians have indicated that reporting inaccuracies would either alter their relationships with industry or force them to sever ties with a company. Kamp also pointed out that although there is a dispute period – 45 days for doctors to review data, followed by a 15-day data correction period – if disputes are unresolved after the combined 60 days, the data still will be published, just with an asterisk denoting an ongoing dispute.

“There are many questions that remain unanswered, and companies are advised to parse through those in an ‘assumptions document’ that spells out their philosophy and policies for reporting,” he said.

Educational Materials at Issue

One of those unanswered questions involves the reporting status of medical textbooks and journal reprints. Although materials designed to be used directly by or with patients, such as anatomical models or wall charts, are considered “educational” and not subject to reporting, materials that benefit patients more indirectly by educating their physicians are considered reportable under the final rules, even though there is no mention of them in the ACA.

“We object to the potential negative effect that these rules may have on educational materials,” Coalition Education Foundation Executive Director Jack Angel told Webinar attendees. In May, the Washington Legal Foundation asked CMS to delay application of reporting requirements to medical textbooks until CMS has had an opportunity to examine the First Amendment implications of including these items as “transfers of value” from manufacturers to doctors.

“I also was shocked to see journal reprints included as reportable, because it seems contrary to what this rule is trying to accomplish and it appears that there is a lack of understanding regarding industry’s role in physician education,” Angel remarked. “We can give away all of the bagels and pens we want to, but not peer-reviewed journal articles? Our fundamental concern is that this will impact patient care.”

The Coalition has met with CMS on several occasions to try to resolve this and other issues. However, even if the reprint provision stands, it is unclear what value should be assigned to those items, Angel noted. “If physicians receive these items for free or as part of a subscription or site license, what value to the physician should be placed on them for reporting purposes? It needs clarification.” The Coalition also has sent two formal comments to CMS on the Sunshine final rules and continues to work with industry allies and to consider options for further action, according to Angel. “This includes possible legislation that gives us relief from an unnecessary part of the rules,” he said.

Next Steps for Industry

Between now and Aug. 1 and beyond, industry must make reporting accuracy its first priority. Kathy Bronshtein, SVP Compliance, Sudler & Hennessey, told Webinar attendees that because disputes over data accuracy will most certainly be problematic, companies need to ensure that data are correct. One part of that process is understanding what POTVs are included and excluded under the final rules, and another part is developing an infrastructure to facilitate the data collection and reporting function within the entity. That development begins when agencies and publishers can answer some key questions, Bronshtein said.

“You need to determine who will be accountable. Will it be finance or the account team? And who is the pharma contact person for POTV reporting? Are there training requirements for the pharma financial system? What are the information requirements? Will pharma provide unique identifiers, such as NPIs? Do they have data templates?” she asked the audience. Other questions include whether there is an assumptions document to demonstrate how calculations should be completed, how and when data will be submitted, what operational processes and financial systems will be implemented and how disputes will be handled.

Bronshtein reiterated the point that most healthcare professionals do not have a full understanding of the Sunshine Act and noted that when contracting, agencies and publishers should ensure that physicians know “what they are signing up for and the resources they can access for information. Many don’t even know that they must register on the CMS site to review the POTV reported against their name. It is so important to talk to them in advance.”