New Transparency Reporting Guidelines Affecting Physicians

Although healthcare reform continues to be hotly debated on Capitol Hill, doctors already have to deal with one topic of the reforms from the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act: transparency in reporting. Responding to concerns about manufacturers’ gifts to doctors, these two laws aim to force manufacturers to disclose what typically had been grants of medical supplies and pharmaceuticals to a public that may see such gifts as a conflict of interest.

An extensive amount of data now has to be reported, and there’s a distinct possibility that some of it will be incorrect. And, while the legal responsibility for these disclosures remains with the manufacturer, it will be necessary for doctors to ensure that the information reported by the manufacturer is correct. Also, since this is the first time the government is attempting such a program, there may be complications.

This process isn’t entirely new for physicians. Even before these transparency laws were enacted, the American Medical Association (AMA) has had in effect its own board-approved legislative principles on gifts to physicians that encourage doctors to take an active role in the process. According to the AMA, “Ultimately, it isthe responsibility of individual physicians to minimize conflicts of interest that may be at odds with the best interest of patients and to access the necessary information to inform medical recommendations.”

What Must Be Reported

The manufacturer will be required to report the physician’s name and address, the value of payment or gift given (cash or cash equivalent; in-kind items or services; stocks, a stock option, ownership interest or return on investment) and the date the gift was provided. Additionally, the manufacturer must disclose a description of the nature of the gift, such as whether it is for consulting fees, compensation for services other than consulting, honoraria, entertainment, food, travel, education, research, charitable contribution, royalty or license, current or prospective ownership or investment interest, compensation for serving as a speaker or faculty for a continuing medical education program, or a grant. If the gift is related to marketing, education or research specific to a drug, device or a biological or medical supply, the name of that product must be reported as well. All of this information must be reported by Sept. 13, 2013 (and on June 30 each year thereafter), and it must be made available to the public online.

When it comes to product research or development of a new medical technology, a new application of existing technology, or a new drug, device or biological or medical supply for clinical investigations, the information should be made available either after the U.S. Food and Drug Administration approves the drug or item, or four calendar years after the date that the payment was made.

Drug samples also now fall under the reporting requirements. For years, drug manufacturers have been required to collect information about drug samples that they distributed, since many consumers fear that the procurement of samples by doctors influences which prescriptions they are filling for patients. But, this internal information will now be turned over to the federal government to be part of a searchable online database. The identity and quantity of drug samples requested and distributed by doctors seeking the samples must be disclosed starting April 1, 2012.

Beginning March 31, 2013, manufacturers and grouppurchasing organizations will be forced to reveal all physicians (or an immediate family member of the doctors) who have any ownership or investment interest in the company. However, this doesn’t include publicly traded securities or mutual funds. Plus, they must disclose the amount invested by each physician, the value and terms of each ownership or investment interest, and any payment or transfer of value provided to a doctor (or entity or individual who is designated on behalf of the physician) holding such ownership or investment interest.

Hospitals also have to disclose any physicians who are owners or investors, as well as the nature and extent of all of their interests. Hospital facilities must implement procedures for physician owners and investors to disclose their interests to patients referred to the hospital. In addition, the hospitals must divulge that they are partially owned or invested in by doctors, either on their websites or by taking out a public advertisement. As a side note, if the hospital does not have a doctor on the premises during all hours of operation, it must tell patients of the limited physician availability prior to admitting them for treatment.

One transparency law that went into effect this past January directly pertains to physicians: Doctors who refer a patient for in-office radiology or imaging services must divulge that there are other nearby providers the patient can use instead. But it’s not sufficient to just inform the patient that he or she can receive these services from another provider; doctors have to inform them in writing and list providers who offer the same services in the area in which the patient resides.

One hazy area is the conflict these new federal laws may have with state laws. Although the new federal transparency provisions trump the state laws starting January 1, 2012, the healthcare industry isn’t completely exempt from adhering to applicable state reporting laws. If a state’s laws go beyond the federal provisions, then those state reporting requirements must still be adhered to. For example, if the state requires someone other than a manufacturer or a physician to do the reporting, that still will be required. And, the state may allow disclosure to a federal, state or local governmental organization for public health surveillance, investigation or other purpose to ensure public health is protected.

What Is Excluded

Of course, there are some exclusions to the new federal reporting guidelines. Any gift under $10 doesn’t have to be reported, as long as the total amount during a year given to that doctor does not exceed $100. Since this amount is so small, this basically means that everything will have to be reported. The cap can easily be surpassed by one gratis meal.

Product samples for patients that aren’t for sale and educational materials that directly benefit patients, like brochures, also do not have to be reported. Another exception is a device that is loaned for a trial period, as long as the trial period does not exceed 90 days.Any items or services covered under a contractual warranty, including the replacement of a medical device, needn’t be reported, since those are not providing anything new of value to doctors. Anything of value that has to do with a civil or criminal action or an administrative proceeding also is exempt. Discounts and in-kind items used for charity care are other exceptions, such as services for Doctors Without Borders or similar organizations, do not fall under these guidelines.And, as previously mentioned, any dividend from an ownership or investment in a publicly traded security or mutual fund does not need to be reported.

The Process

These laws have been enacted by the government, but still it is not clear what the information-intensive reporting process will look like. While there are financial penalties that are meant to keep the manufacturers honest in disclosing their gift-giving practices, there isn’t any readily available oversight to ensure that all the information is correct, which means that physicians should be sure to monitor the reporting on their own. When in doubt about a gift from a manufacturer, physicians should look to the AMA’s principles for guidance on the matter: “Any gifts accepted by physicians individually should primarily entail a benefit to patients and should not be of substantial value.” That means textbooks, modest meals and other gifts are acceptable if they serve an educational function, but cash is not appropriate. An even simpler way to think about it: Don’t accept any gifts that you wouldn’t want your patients to know about.