Health Industry Washington Watch : Washington DC Healthcare Industry Law Firm : Reed Smith : Health Industry Washington Watch : Regulations, Medicare/Medicaid, Governmental Organizations

This post was written by Elizabeth B. Carder-Thompson, Katie C. Pawlitz, Nancy E. Bonifant and Debra A. McCurdy.

On December 19, 2011, the Centers for Medicare & Medicaid Services (“CMS”) published a proposed rule (the “Proposed Rule”) related to section 6002 of the Affordable Care Act, commonly referred to as the “Physician Payment Sunshine Act” (so referenced herein, or as the “Act”). The Physician Payment Sunshine Act requires applicable manufacturers of drugs, devices, biologicals, or medical supplies covered under Medicare, Medicaid, or CHIP to report annually to the Secretary of the Department of Health and Human Services (“Secretary”) certain payments or other transfers of value to physicians and teaching hospitals. Additionally, applicable manufacturers and applicable group purchasing organizations (“GPOs”) must report certain information regarding the ownership or investment interests in them that are held by physicians or their immediate family members.

The Proposed Rule comes more than two months after CMS’s statutory deadline of October 1, 2011. CMS proposes an expansive reading of its statutory authority, arguably extending reporting requirements to manufacturers and payments not contemplated by Congress. Moreover, while offering some much-needed clarification regarding certain tracking and reporting obligations under the Act, it leaves many questions unanswered. Indeed, CMS solicits comments on almost every aspect of the Proposed Rule – 60 topic areas in all. Accordingly, significant ambiguity still remains in terms of compliance with certain aspects of the Act. Comments to the Proposed Rule are due no later than 5 p.m. ET February 17, 2012.

This Client Alert outlines the guidance and proposals included in the Proposed Rule. As further discussed in this Alert, CMS has delayed implementation of tracking requirements under the Physician Payment Sunshine Act, but applicable manufacturers and GPOs still are advised to continue to prepare for implementation of the Act, potentially occurring during this calendar year 2012. Applicable manufacturers and applicable GPOs may do so by taking steps to ensure that tracking and reporting systems conform to the requirements of the Act and the Proposed Rule, to the extent clarity is currently available, and by closely monitoring future CMS guidance in this area.

To read the full Alert, click here.

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This post was written by Elizabeth B. Carder-Thompson, Katie C. Pawlitz and Debra A. McCurdy.

The Centers for Medicare & Medicaid Services (“CMS”) released today a proposed rule implementing the physician payment transparency provisions of the Patient Protection and Affordable Care Act (Section 6002), commonly referred to as the "Physician Payments Sunshine Act." Among other things, the Act requires drug, device, biological or medical supply manufacturers to report payments or other transfers of value to physicians and other covered recipients. In addition, the Act requires manufacturers and group purchasing organizations (GPOs) to report certain information regarding ownership or investment interests held by a physician in the manufacturer or GPO.

The official version of the proposed rule, titled “Transparency Reports and Reporting of Physician Ownership of Investment Interests” (the “Proposed Rule”), will be published in the Federal Register on December 19, 2011. Comments on the Proposed Rule are due no later than 5:00 PM EST on February 17, 2011.

Although released later than the statutory deadline for the regulations (October 1, 2011), upon initial review, the Proposed Rule appears to provide important guidance to manufacturers regarding several aspects of the Physician Payments Sunshine Act. Notably, CMS has announced that manufacturers and GPOs will not be required to collect required information until after the final rule is published (rather than the statutory January 1, 2012 deadline). CMS anticipates publishing the final rule “as soon as possible” in 2012.

We are in the process of conducting a full review of the Proposed Rule and will release shortly a Client Alert providing a detailed analysis of the proposal. In the meantime, please contact Elizabeth Carder-Thompson (202-414-9213 or ecarder@reedsmith.com), Katie C. Pawlitz (202-414-9233 or kpawlitz@reedsmith.com), or any other member of the Reed Smith Health Care Group with whom you work, if you would like additional information or if you have any questions.
 

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A number of Congressional committees have held hearings recently on a variety of health policy issues, including the following:

• The Senate Judiciary Antitrust Subcommittee held a hearing to examine the proposed Express Scripts/Medco merger;
• The Senate Finance Committee examined “Drug Shortages: Why They Happen and What They Mean”;
• The House Oversight and Government Reform Committee held a hearing entitled, “A Medicaid Fraud Victim Speaks Out: What's Going Wrong and Why”.

Three additional hearings are scheduled for December 15: a Senate Health, Education, Labor and Pensions Committee hearing on prescription drug shortages; a House Small Business Investigations Subcommittee hearing on new medical loss ratio rules; and a Senate Aging Committee hearing on implementing the Physician Payment Sunshine Act (rescheduled from December 8).
 

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The Centers for Medicare & Medicaid Services (CMS) has sent to the White House Office of Management and Budget (OMB) its long-awaited proposed rule to implement the Transparency Reports and Reporting of Physician Ownership of Investment Interests (also called the Physician Payment Sunshine Act) provisions of the ACA. These provisions are intended to encourage greater transparency in the relationships between drug and device companies and physicians by (among other things) requiring covered drug, device, biological or medical supply manufacturers that provide a payment or other transfer of value to a “covered recipient” – a physician or a teaching hospital – to submit detailed reports to the HHS Secretary. In addition, the provision requires certain manufacturers and group purchasing organizations (GPOs) to report to the Secretary certain information regarding ownership or investment interests held by a physician in the manufacturer or GPO. The text of the rule is not available at this stage, but the rule could reach the Federal Register in the near future. As noted in a separate posting, the Senate Aging Committee has scheduled a December 15 hearing on this issue.

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