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PPSA: What will come of the Physician Payments Sunshine Act?

by Clive Riddle, June 8, 2012

One of the oodles of components of the Affordable Care Act is the Physician Payments Sunshine Act, which, according to the CMS proposed rule issued 12/19/11 “would require applicable manufacturers of drugs, devices, biologicals, or medical supplies covered by Medicare, Medicaid or the Children’s Health Insurance Program (CHIP) to report annually to the Secretary [of Health and Human Services] certain payments or transfers of value provided to physicians or teaching hospitals (‘covered recipients’). In addition, applicable manufacturers and applicable group purchasing organizations (GPOs) are required to report annually certain physician ownership or investment interests.”

Of course stakeholders and studies have come out on both sides. Various physician and pharmaceutical interest groups have invested in arguing the administration costs and burdens to be borne outweigh the potential benefits. The Archives of Internal Medicine published a Research Letter last week: Effect of Physician Payment Disclosure Laws on Prescribing describing results of study of two such state laws that did not produce intended results. Consumer interest groups have placed count-pressure to fully implement the Act, such as the Pew Prescription Project.

Perhaps in response to such conflicting pressures and 300 comments received to date, CMS last month blogged that they were delaying issuance of the Final Rule until later this year, and provided assurance that no data collection would be required before January 1, 2013.

In the midst of all this, Deloitte has just released a 28 page report: Physician Payment Sunshine Act: Physicians and life sciences companies coming to terms with transparency? The report is based on a survey conducted by Forbes Insights for Deloitte, was conducted in January and February 2012 among 110 U.S.-based physicians and 223 global executives from life sciences companies worldwide. Their findings would seem to indicate we’ll all get through this somehow.

The survey indicated that, when posed the question “Are you in favor of a public, searchable database of all physician-industry relationships to be available to the public?” 54% of physicians responded “yes, as long as patients understand how to interpret the data” and another 14% went further, stating “yes, the more information patients can get, the better.”

Deloitte reported that “with about 12 months to go until the first reporting requirements under PPSA (March 2013), two-thirds (66 percent) of the life sciences executives responding ...said that their companies are either “100 percent ready” or are “50 percent done and hoping to be ready in time” for the PPSA and other new compliance requirements. Meanwhile, the majority (55 percent) of life sciences companies expect to see their HCP transparency-related compliance investments to continue to increase in 2012 and 2013. Almost half (48 percent) of these investments are expected to go into in-house training programs, 34 percent to in-house software upgrades and integration, and 25 percent to hiring new full-time employees.”

But will these new requirement ultimately achieve positive objectives? Seth Whitelaw, Director, Deloitte & Touche LLP U.S., tells us “as the survey results illustrate, physicians, the life sciences industry, and even governments are expected to expend significant time, effort, and resources complying with PPSA. Yet it is too early to tell whether the PPSA will significantly alter the landscape of provider-industry relationships.”

Deloitte cautions that “almost three-quarters (72 percent) of physicians responding to the survey believe that new regulations will not change provider-industry relationships. Moreover, despite all the efforts to comply with the new regulations, 38 percent of life sciences executives responding to the survey said that they either don’t know how, or have no plans, to use and leverage the publicly available data regarding other companies.”

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