Centers for Medicare and Medicaid Services Urged To Issue Final Rule on Physician Gift and Disclosure Regulations

Apr 23, 2012   

On April 4, 2012, Senators Charles Grassley (R-IA) and Herb Kohl (D-WI), authors of the Physician Payments Sunshine Act (“Sunshine Act”), wrote a letter to the Centers for Medicare and Medicaid Services (“CMS”) pushing CMS to issue its statutorily mandated final rule implementing the Sunshine Act provisions of the Patient Protection and Affordable Care Act (“PPACA”). As we previously reported, section 6002 of the PPACA is also known as the Sunshine Act because it is based on the previously proposed, but never enacted, Physician Payment Sunshine Act.

In their letter, Senators Grassley and Kohl said they were “disappointed” that CMS missed the October 1, 2011 statutory deadline for implementing the Sunshine Act. They requested that CMS issue the final rule on implementation no later than June of this year so that partial data collection for 2012 can begin. Furthermore, Senators Grassley and Kohl “strongly urge[d] CMS to work closely with stakeholders to finalize these rules so that they comprise a feasible approach to providing valuable data that patients deserve.”

Clear Definitions and Guidelines

As we previously reported, the Sunshine Act requires drug and device manufacturers to report certain “payments or other transfer of value” made to physicians. The Sunshine Act also requires CMS to design an “Internet website” where the public can search and view such “payments or other transfer of value” made to physicians by drug and medical device manufacturers. In the letter, the Senators encouraged CMS to be clear and to narrowly define precise payment categories so as to allow all stakeholders to work under the same assumptions. Additionally, they ask CMS to consider removing the proposed “other” payment category “so that it does not obscure the true nature of some payments.”

The Senators also urged clarity with regard to indirect research payments. Specifically, they urged CMS to more clearly define instances when indirect research payments and indirect research payments to third parties are reportable, and how and in which context such payments will be reported on CMSs website that will publically available. According to the Senators, this clarity will be very important if physicians will be contacted directly by pharmaceutical companies and reported publicly, physician participation in research activities could be hindered.

Accurate Data/Errors

The Senators also urged CMS to update the website with the correct information as soon as CMS is made aware of errors in the reported data. The Senators stated that CMS should include mechanisms by which the agency can update errors on a quarterly basis because prolonged errors could cause confusion among the public, physicians, and manufacturers.

In an effort to reduce inaccurate payments and disputes, the Senators asked CMS to consider requiring manufacturers to share the data they plan to report to CMS directly to covered physicians before reporting the data to CMS. When disputes do arise, the Senators agree that CMS must develop a mechanism to which the disputes can be reported as smoothly as possible; but insist that CMS not become the default dispute arbiter between manufacturers and physicians.

Other Issues

In addition to the clarity and accuracy of the data, the Senators also addressed concerns with the website that will be designed to report the payments to physicians and outreach to physicians. Specifically, the Senators insist that the website be designed in a “user friendly” manner and the data should be in an “easy-to-use” format with terms and names that are recognizable to patients. The website should also define the terms of value and provide context so that the public best understands what these payments are for and in what capacity they were made. The Senators also encouraged CMS to work directly with stakeholders to best determine how to release the publicly available data on the website.

The Senators also encouraged CMS to increase its outreach to physicians and other covered recipients about the Sunshine Act. This is important because many physicians and other covered recipients are unaware of the Sunshine Act and how it affects them. A recent survey of 500 compliance officers and physicians in the March 1, 2012 issue of “Inside CMS” reported that 47% had not heard of the Sunshine Act.

Implementation Questions

In addition to their general comments, the Senators request that CMS answer the following questions by April 18, 2012:

  1. Can CMS commit to completing a final rule by this summer so that data collection can begin in 2012?
  2. Since CMS missed the initial required Congressional deadline, has CMS increased the resources or personnel assigned to the implementation of the Sunshine Act, including a dedicated information technology lead?
  3. Will CMS commit to issuing an RFP to begin designing the website?
  4. Does CMS have a dedicated working group assigned to implementation of the Sunshine Act, and what technical expertise and program areas are represented?
  5. Does CMS have a public education and outreach plan to raise awareness of the new law with the provider community and with health care consumers?
  6. Has CMS allocated dedicated implementation funds for the Physicians Payment Sunshine Act?

The public comment period for the proposed rules closed in February. CMS is now reviewing and considering the comments as it promulgates the final rules. We will continue to monitor the Sunshine Act and final rules. For more on payment disclosures and reporting requirements under the Sunshine Act, please contact us at or (305) 350-5690.