Inside CMS: "Software Firm Urges Rx, Device Makers To Focus On Dispute Resolution"

From Vol. 15, No. 8, March 22, 2012

The biggest challenge that the Physician Sunshine Act poses to drug and medical device makers is getting annual reports correct before sending them to CMS because, although the agency will correct faulty physician gift information posted on the database, it will not erase the original incorrect reports, a software executive says. One of the main concerns of physicians is that they will be incorrectly listed as having received gifts from drug and device makers.

Companies need to figure out how they will share with doctors and teaching hospitals, ahead of publication, information they are including in reports, and they need to include a dispute-resolution process, says Michaeline Daboul, president and CEO of MMIS, which offers software to manage dispute resolutions and reporting. CMS’ proposed rule on the Sunshine Act calls for letting providers dispute reports before those reports reach CMS. The agency will also give providers 45 days to dispute reports once they are publicly posted, but to be as transparent as possible, the agency will not change original reports. Instead, CMS will post the disputes next to the original reporting.

That means it is extremely important to get the reports correct before sending them to CMS, Daboul says. Physicians are worried about the reports hurting their reputation with patients, and drug and device makers are worried about hurting their relationship with physicians.

CMS received 314 comments on the proposed rule it issued in December, which delayed the start date for collecting information that companies must begin reporting next January.

One common complaint among drug and device makers is that the proposed rule would cover the foreign affiliates of companies that make products sold in the United States. Device makers consider CMS’ interpretation to be an expansion of the definition of who is covered by the law.

“In some cases, the number of additional entities that would be required under CMS’s broad definition is staggering,” Philips Healthcare states. “Koninklijke Philips Electronics N.V. (Royal Philips), the ultimate parent company of Philips Electronics North America Corporation, has more than 500 separate legal entities under its corporate umbrella, and many would be required to report under CMS’s expanded definition.”

Daboul says several other countries already have laws similar to the Physician Sunshine Act and companies are not arguing against those laws. Thus, companies are not trying to avoid reporting; they merely want to fine tune the law.

Device makers echoed that argument. Foreign affiliates often are not used to U.S. law and did not anticipate being covered by the Physician Sunshine Act, they say. Stryker says even companies with no health care business could be covered by the law. “Based on the express language of the statute, applicable manufacturers did not previously contemplate tracking and reporting payments or other transfers of value associated with their foreign or non-health care affiliates,” the company says.

Many companies also would like more time to implement the law. Consumer group Pew Health Group supports the delay of data collection but unlike many drug and device makers, Pew is pushing CMS to maintain the law’s 2013 start date for reporting that information. That would mean reporting a partial year’s worth of data in 2013, but Pew says that’s much preferred to skipping the first year of reporting.

B. Braun Medical says its product line is diverse and its workforce large, and it estimates it will take 180 days to implement the final rule. “We suspect many other global prescription drug and medical device companies manufacturers face similar implementation challenges,” the company says.

Likewise, Zimmer Holdings says it needs “at least” 180 days following publication of the final rule to implement the law. “Zimmer recommends that CMS require data collection and reporting for the nearest full calendar year following the publication of the final regulation.” — John Wilkerson

Medispend Marketing

Posted on Mar 23, 2012 5:46:44 AM

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