CMS to mandate drug, device makers reporting on provider relationships

The Centers for Medicare & Medicaid Services (CMS) yesterday proposed a Sunshine Act transparency rule, in which drug and device manufacturers must disclose information about their relationships with teaching hospitals and physicians.

With goals to reduce potential conflicts of interest, the proposed CMS rule would open up the details of drug/device maker and provider relationships to publication. The Sunshine rule, effectively proposed to start by March 31, 2013, requires manufacturers of drugs, devices, biologicals and medical supplies covered by Medicare, Medicaid or the Children's Health Insurance Program to report CMS payments or other transfers of value they make to physicians and teaching hospitals. It also requires manufacturers and group-purchasing organizations to disclose to CMS physician ownership or investment interests.

If they fail to report, they would face civil monetary penalties up to $150,000 a year or up to $1 million if they knowingly violate the reporting requirements.

"If your doctor is taking money from manufacturers of prescription drugs, suppliers of wheelchairs or other devices, you deserve to know about it," CMS Deputy Administrator for Program Integrity Dr. Peter Budetti said in an announcement yesterday. "Disclosure of these relationships will discourage the inappropriate influence on clinical decision-making that sometimes occurs while still allowing legitimate partnerships."

Under the rule, providers will have the opportunity to review the information and add corrections if necessary before publication, according to the press release.

Data collection will not start Jan. 1, 2012, according to the CMS proposal. Instead, manufacturers and group-purchasing groups will not have to begin data collection until final regulations are issued.

"Depending on the timing of the final rule, CMS is proposing that manufacturers and GPOs will be required to submit a partial year on Mar[ch] 31, 2013. Once the data has been submitted, CMS will aggregate manufacturer submissions at the individual physician and teaching hospital level, provide them with a 45-day period to confidentially review and, if necessary, correct the data, and make the data publicly available by Sep[t]. 30, 2013," according to the statement.

CMS is accepting comments on the proposed rule until Feb. 17, 2012, and a final rule will be published in 2012.

For more information:
- read the CMS press release
- check out the proposed rule (.pdf)

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