“Transparency Reports” on Industry Payments to Physicians and Teaching Hospitals

Abstract

PUBLICAWARENESSOFINDUSTRYPAYMENTSTOPHYSICIANS and teaching hospitals in the United States is about to markedly increase.Asrequiredbythe“Sunshine”provisions of the Patient Protection and Affordable Care Act, by September 2013 the Centers for Medicare & Medicaid Services (CMS) is to publish “transparency reports” that disclose these industry payments on a public website; the informationmustbe“searchable,” “clearandunderstandable,” and “able to be easily aggregated and downloaded.” Unlike most disclosures of physician-industry relationships to date, the reportswill include theamountsofpaymentsorother “transfers ofvalue.”Payments largeandsmall shouldberevealed, including the drug or device that the payment was related to. CMSissuedtheproposedregulations inDecember2011,afteradelayof severalmonths, andtheyareopenforpubliccomment until February 17, 2012. The FIGURE summarizes the information about industry payments that is proposed to be publiclyavailable;comparable informationwouldalsobeavailable about physician ownership or investment interests in manufacturers and group purchasing organizations. Because CMS has committed to issue the final rule in 2012, the initial transparency reports could disclose information about payments made later this year. It would not be surprising, however, if the government delays the timetable. Some financial relationshipsbetweenphysiciansand teaching hospitals and the pharmaceutical and medical device industries can benefit patients, primarily those that are related to bona fide basic and clinical research. But as the preamble of the proposed rule states: “Close relationships between manufacturersandprescribingproviderscanleadtoconflictsofinterest that may affect clinical decision-making. Increased transparencyof theserelationships tries todiscourage inappropriate relationships, while maintaining the beneficial relationships.” Tohelpcontrol conflictsof interest, the transparencyreport website—aprototype isnotyetpubliclyavailable—should fulfill expectations foraccuracy,clarity, andeaseofuse.So far,onlinedisclosuresofindustrypaymentstophysicians,suchasthose from orthopedic device makers to orthopedic surgeons, have often frustrated and disappointed those who have read them. Experienceswithstatedisclosure lawshavehighlightedthedifficulties of accessing the information and the limited quality ofthedata.ProPublicaassembleddisclosuresofpaymentsmade to physicians between 2009 and 2011 that 12 pharmaceutical companieshadpublicallyposted,creatingasinglecomprehensive database (http://projects.propublica.org/docdollars/) that is searchable for individual physicians. The reporters noted that the work “was not easy. Some of the firms constructed their sites in a way that made it near impossible to analyze or, in some cases, even download their data.” The proposed rule interprets the statutory language sensibly. The rule covers any entity that manufactures a drug, device,biological,ormedical supply forsaleordistribution in the United States that is available for payment by Medicare, Medicaid, or the Children’s Health Insurance Program. It defines a teachinghospitalasanyhospital thatreceivesanypaymentfrom Medicare for medical education. The rule also covers both direct and indirect payments, those that a company makes to a third party, such as a medical society, a contract research organization, or a medical education and communication company, but that are intended for a physician or other recipient covered by the law. When the manufacturer knows who the eventual recipients are, it must report their identities. Disclosing both direct and indirect payments is important to meet the goalsof transparency;whenmoney intended forphysiciansor teaching hospitals is routed through a third party, the actual source of the funds must be clearly identified. Disclosures of indirectpaymentsshouldfurtherilluminatemanufacturers’ total research payments, as well as industry’s role in funding continuingmedical education(CME). Total commercial support for CME has declined since it peaked in 2007 at $1.21 billion. But in 2010, commercial support was still $830.8 million, or 37.1% of the $2.24 billion of total income for CME providers. The transparency reports should disclose industry payments from about 1150 applicable manufacturers to about 1100 teaching hospitals and an unknown number of the estimated 892 000 health care professionals covered by the legislation. In addition to teaching hospitals, covered recipients are doctors of medicine and osteopathy, as well as dentists, podiatrists, optometrists, and licensed chiropractors. Payments to nurses, physician assistants, pharmacists, and others in the medical field are not subject to the reporting and disclosure requirements, nor are payments to most hospitals; 5754 hospitals meet the American Hospital Association’s criteria for registration as a hospital facility. The lawpermitsdelayedpublicationofcertainpayments for bona fide product research and development and clinical investigations,which ifmadepublicmightdamage themanufac-