Law360 Article - U.S. and French Sunshine Laws Present Compliance Challenges for Manufacturers

In “From Sea to Shining Sea: French and US Sunshine Laws,” (Law360 subscription required), Reed Smith attorneys Elizabeth Carder-Thompson and Daniel Kadar discuss recent legislation from both sides of the Atlantic designed to increase the transparency of relationships between drug and medical device manufacturers on one hand and physicians and teaching hospitals on the other. While both the U.S. and French Sunshine Acts are intended to address the same general issue, there are several key differences between the two resulting from the respective environments in which they were passed. In addition to providing an overview of the legislation and its immediate effects, the article also discusses some of the compliance issues that have resulted from these laws, including determination of the extent to which non-U.S. headquartered entities or non-U.S. based physicians are subject to U.S. Sunshine Act requirements, and regulation of the amount, organization, and frequency of data disclosure required under the French Sunshine Act.

Manufacturer, Group Payment Organization, and Physician Financial Information Slated For Disclosure, May Spur False Claims Act Activity

As mentioned on our Health Industry Washington Watch blog, pharmaceutical and medical device manufacturers and group purchasing organizations (GPO) are currently in the process of submitting detailed 2013 payment and investment interest data to the Centers for Medicare & Medicaid Services. The submission of this data, as dictated by the Physician Payment Sunshine Act, is intended to highlight certain financial relationships between the manufacturers and GPOs and physicians. With some exceptions, this data will become public by September 1, 2014, at which time the Department of Health and Human Services’ Office of the Inspector General, Department of Justice, and relators’ attorneys will likely analyze the data to initiate investigations and support complaints under the federal False Claims Act. To read the entire post, click here.

CMS Releases List of Teaching Hospitals; Educational Efforts and Requests for Additional Clarification Regarding the Physician Payment Sunshine Final Rule Continue

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

In preparation for data collection to begin under the Physician Payment Sunshine Act Final Rule on August 1, 2013, the Centers for Medicare & Medicaid Services (CMS) released yesterday the list of teaching hospital covered recipients to which payments and other transfers of value must be reported by applicable drug and device manufacturers.  The list, which will be updated annually by CMS at least 90-days before the beginning of a reporting year, can be found on CMS’ National Physician Payment Transparency Program: OPEN PAYMENTS website and includes approximately 1,100 legal business names that are organized by state and tax identification number.

CMS also announced this week that it will be holding a National Provider Call on Wednesday, May 22, 2013 at 2:30 PM EST, directed at physicians and teaching hospitals.  The agenda for the call includes an overview of the Final Rule, key dates, the role of covered recipients and resources available to covered recipients.

Meanwhile, stakeholders and their representatives, including the American Medical Association (AMA) and the Advanced Medical Technology Association (AdvaMed), have continued to seek additional clarification from CMS on a variety of outstanding questions.  These questions include whether journal reprints provided by a manufacturer to a physician or teaching hospital have a discernible economic value that triggers reporting requirements, what constitutes a payment or transfer of value to a teaching hospital as opposed to payments or transfers of value to an employee of the teaching hospital, and more.  Ideally, CMS will issue further guidance on these issues in sufficient time for applicable manufacturers to prepare for the data collection deadline this summer.

Seeing the Light With the Physician Payment Sunshine Act

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On February 1, 2013, the Centers for Medicare & Medicaid Services released the long-awaited final rule implementing the physician payment transparency provisions, commonly referred to as the Physician Payment Sunshine Act, in the Obama administration's 2010 health care reform legislation. The Sunshine Act joins the list of significant federal laws addressing potential conflicts of interest in health care, including the Anti-Kickback Statute and the Stark Law. With implementation of the Sunshine Act now in sight, stakeholders face the real challenge of complying with, and practicing under the shadow of, the Sunshine Act and its complex and detailed regulations.

To read the full article "Seeing the Light With the Physician Payment Sunshine Act," please visit law.com.

Sunshine Physician Payment Final Rule Overview and Analysis

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

On February 1, 2013, the Centers for Medicare & Medicaid Services (CMS) of the Department of Health and Human Services (HHS) released the long-awaited Final Rule to implement the “Sunshine” provisions of the Affordable Care Act of 2010 (ACA). The Sunshine provisions - intended to provide increased transparency on the scope and nature of financial and other relationships among manufacturers, physicians, and teaching hospitals - require that certain manufacturers of drugs, devices, biologicals, and medical supplies covered by Medicare, Medicaid and CHIP report annually to HHS identified payments or transfers of value they have made to physicians and teaching hospitals. In addition, they require manufacturers and certain group purchasing organizations (GPOs) to report to HHS information on physician ownership and investment interests.

The Final Rule provides needed clarity on some troubling aspects of the proposal, however, it leaves a number of questions unanswered. Please click here to read our detailed analysis of the Sunshine provisions, including an overview and summary of the Rule as well as discussion of the important issues that stakeholders should be considering as they prepare for Sunshine implementation.

Massachusetts Releases Final Regulations, Restores Annual "Sunshine" Reporting Requirement for Drug/Device Manufacturers

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

On Wednesday, November 21, 2012, Massachusetts’ Public Health Council (“Council”) approved amendments to the State’s Marketing Code of Conduct, which restricts certain gifts and payments by pharmaceutical and medical device manufacturers to Massachusetts health care practitioners (“HCPs”) and requires disclosure of payments and transfers of value to HCPs. The final regulations, effective as of December 7, 2012, primarily adopt the emergency regulations issued by the State in September but make a few substantive changes.

Importantly, the final regulations do not include language from the emergency regulations that eliminated the requirement that manufacturers report annually specific information regarding payments in connection with sales and marketing activities after calendar year 2012 reports. Instead, the final regulations only prohibit duplicative reporting to Massachusetts if manufacturers have already reported the same information pursuant to federal law (for example, the federal Physician Payment Sunshine Act), and such information is available to the Massachusetts Department of Public Health (“DPH”).

The Council also adopted the revised provisions regarding modest meals substantially as written in the emergency regulations. Under the revision, manufacturers are allowed to provide modest meals and refreshments to HCPs at non-CME educational presentations, as long as manufacturers file quarterly reports detailing such meals. Notably, the Council declined to define “modest” with a clear monetary limit or specifically to ban alcohol at industry-funded events and presentations, as requested by public commenters. With regard to the required quarterly reports, the Council did include a new, open-ended category of information that must be reported: “such other information as determined necessary by the Commissioner.” It is not clear whether this requirement will be clarified in further regulations or guidance that DPH is expected to issue.

Looking forward, the full effect of Massachusetts’ final regulations will not be clear until the release of the final rule for the federal Physician Payment Sunshine Act, because that rule will determine the extent to which Massachusetts’ annual reporting requirement will be preempted. Based on Massachusetts’ final regulations, however, it appears the quarterly reports regarding meals at non-CME educational presentations will not be subject to preemption. Massachusetts’ final regulations are available here.
 

Massachusetts Signals Potential Elimination of HCP Payment Reporting Requirement Through Emergency Regulatory Amendments

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

On September 19, 2012, the Massachusetts Public Health Council approved emergency amendments to the State’s Marketing Code of Conduct regulations, 105 CMR 970.000, which restrict certain gifts and payments by pharmaceutical and medical device manufacturers to Massachusetts health care practitioners (“HCPs”) and require disclosure of payments and transfers of value to HCPs. The regulations, effective as of September 19, 2012, follow amendments to the underlying statute, Massachusetts General Laws, Chapter 111N, signed into law in July by Governor Deval Patrick as part of the FY2013 State Budget. The July statutory amendments are further discussed here in our earlier Client Alert.

The emergency regulatory amendments include many expected changes as a result of the July statutory amendments, including now allowing manufacturers to provide modest meals and refreshments to HCPs at non-CME educational presentations, as long as manufacturers file quarterly reports detailing such meals. However, the emergency amendments also provide that a manufacturer shall be deemed to have met such reporting requirements if the company makes all disclosures required under federal law (for example, the federal Physician Payment Sunshine Act), and such disclosures are then reported by the Secretary of Health and Human Services to the Massachusetts Department of Public Health (“DPH”).

In addition, and importantly, the emergency regulations include new language eliminating the requirement that manufacturers report specific information regarding payments in connection with sales and marketing activities after such reports are made for calendar year 2012. Therefore, although the July 2012 statutory amendments prohibit duplicative reporting to Massachusetts if manufacturers have already reported the same information pursuant to federal law and DPH can obtain the information, the emergency regulatory amendments go even further by eliminating the Massachusetts reporting requirement altogether.

Notably, emergency regulations remain in effect for only three months unless they are formally promulgated according to the Massachusetts Administrative Procedure Act. Therefore, further regulatory action will be necessary to eliminate fully the reporting requirement in 2013 and going forward.

On October 19, 2012, DPH held a public hearing and solicited public testimony regarding the emergency regulations. While some industry stakeholders supported the current definition of “modest meals,” which focuses on “local standards,” others requested that DPH define “modest” with a clear monetary limit and specifically ban alcohol at industry-funded events and presentations. Additionally, stakeholders disagreed regarding whether quarterly reports related to modest meals and refreshments at non-CME educational presentations should be required, given that similar reporting obligations under federal law. Regardless of whether the reporting requirement is permanently eliminated, however, Massachusetts’ broad restrictions remain with respect to gifts and other benefits provided by manufacturers to HCPs.

As we await DPH’s final determination regarding the emergency regulatory amendments, Massachusetts’ potential elimination of the reporting requirement may portend what can be expected from other states as we near release of the final rule for the federal Physician Payment Sunshine 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 certain payments or other transfers of value to physicians and teaching hospitals. Once implemented, the federal Act will preempt any state law that requires a manufacturer to disclose the same type of information required to be reported under the federal law. However, the federal Act does not preempt any state laws that require the disclosure or reporting of information that falls outside of the scope of the Physician Payment Sunshine Act. For example, while the federal law only applies to payments and transfers of value to physicians and teaching hospitals, the Massachusetts reporting requirements cover a broader group of HCPs, including nurse practitioners and physician assistants. As such, but for the recent emergency regulatory amendments, certain Massachusetts reporting requirements would still apply, notwithstanding federal preemption.

Massachusetts’ emergency amendments are available here.

Vermont Offers Limited Amnesty to Device and Biologic Manufacturers who Failed to Report Payments to Health Care Providers

This post was written by Katie C. Pawlitz.

Today the Office of the Vermont Attorney General announced that the Vermont Attorney General is offering limited amnesty to medical device and biologic manufacturers who have failed to report pursuant to Vermont’s Prescribed Products Gift Ban and Disclosure Law. The offer will remain open until October 1, 2012. In order to take advantage of the offer, manufacturers must email prescribedproducts@atg.state.vt.us with the following information: (1) manufacturer name; (2) reporting periods not reported; and (3) name, address, email, and phone number of the representative with whom Vermont should communicate.

The reporting obligation under the Vermont Law became effective July 1, 2009 and, to date, manufacturers have been required to report to Vermont with respect to three reporting periods. The amnesty offer is limited to financial penalties authorized under the Law and does not apply to back-payment of registration fees or penalties for violations of other aspects of the Law, such as gift ban violations. The Office of the Attorney General has indicated that it does not anticipate seeking full disclosure for unreported activity, but that it does anticipate requiring at a later date, disclosure of aggregate information regarding the activity.