Medicare drops Sunshine Law proposals

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The Centers for Medicare & Medicaid Services unveiled a Sunshine Law proposal that would require device and drug makers to report all payments made to certain health care providers.

As part of health reforms contained in the Affordable Care Act, the proposed rule would require med-tech makers as well as drug, biologicals, medical supplies manufacturers and group purchasing organizations to keep records of payments and other values transferred to doctors and teaching hospitals.

"While some collaboration is beneficial to the continued innovation and improvement of our health care system, payments from manufacturers to physicians and teaching hospitals can also introduce conflicts of interests that may influence research, education, and clinical decision-making in ways that compromise clinical integrity and patient care, and may lead to increased health care costs," according to the proposal.

The rule would also require manufacturers and GPOs to disclose physician ownership or investment interests, including those held by immediate family members.

"We recognize that disclosure alone is not sufficient to differentiate beneficial, legitimate financial relationships from those that create conflict of interests or are otherwise improper. Moreover, financial ties alone do not signify an inappropriate relationship," the agency wrote. "However, transparency can shed light on the nature and extent of relationships, and may dissuade inappropriate conflicts of interest from developing."

A failure to report could result in a $150,000 fine per year, with up to $1 million in fines or knowingly concealing payments, which include consulting fees, food, entertainment, grants, royalties and licenses, honoraria and gifts.

The agency plans to publish all records to a public website, where it will be downloadable, searchable and easily aggregated. In addition, CMS plans to submit annual reports to Congress and each state summarizing the data.

CMS hopes to finalize the rule as soon as possible and may require a preliminary report from manufacturers by March 31, 2013. The agency doesn’t plan to ask manufacturers to begin collecting data until it issues a final rule.

The proposal is open for public comment until Feb. 17, 2012.

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