"Sunlight is the best disinfectant," at least according to former U.S. Supreme Court Justice Louis Brandeis, and the medical device industry’s main lobbying group seems to agree.
In a letter to U.S. Dept. of Health & Human Services secretary Kathleen Sebelius, the Advanced Medical Technology Assn. urged lawmakers to fully implement the Physician Payments Sunshine Provision of the Social Security Act and the Patient Protection & Affordable Care Act.
The provision, part of the health care reform act passed in passed last year, would require manufacturers to report to HHS payments made to physicians and teaching hospitals.
"Full implementation of this law will protect patients and help restore trust in our health care system," according to the AdvaMed letter.
The sunshine provision, which won bipartisan support in Congress, states that HHS is required to "consult with the Inspector General, affected industry, consumers, consumer advocates and other interested parties to ensure that the information made available to the public is presented in the appropriate context," according to AdvaMed.
The provision requires the companies to begin reporting gifts or payments worth more than $10 no later than March 31, 2013. The result, a searchable database containing the names and addresses of each recipient and the details of the payments, will be made publicly available by Sept. 30 of that year, and on June 30 every year following.
The act also mandates stiff penalties for companies that fail to comply. Companies found to inadvertently omit reports could ring up civil fines of between $1,000 and $10,000 "for each payment or other transfer of value or ownership or investment interest not reported," according to the act. Companies found to knowingly skirt the reporting rules could be slapped with civil fines of $10,000 to $100,000. The total amount of fines can’t exceed $1 million or 0.1 percent of total annual revenues in a single year.
AdvaMed reminded Sebelius that unless HHS defines absolute terms for companies, it will be "increasingly challenging for manufacturers to know whether they are meeting their statutory obligation as they begin to collect data in 2012."
Earlier this month, AdvaMed released a report saying the U.S. medical device industry was slowly rebounding after a less-than-stellar 2009 performance.
Revenues for publicly traded companies grew to $205 billion in 2010, a 4 percent increase from the $197 billion reported in 2009, which was a 0.1 percent slide from the prior year.
Net income spiked a whopping 57 percent to $12.4 billion, compared to 2009’s $7.9 billion, largely thanks to relief from merger and impairment charges incurred in 2009, according to the report.