CMS releases Sunshine Act final rule

It’s been a long time coming, but late Friday, the Centers for Medicare & Medicaid Services released the final rule for the Physician Payments Sunshine Act.

Guidance on the Sunshine Act – an Affordable Care Act regulation requiring drug, device and biological companies, medical supply manufacturers and group purchasing organizations to publicly disclose their financial relationships with doctors and teaching hospitals – was originally supposed to be released in the fall of 2011 but it wasn’t released until December of 2011, ruffling a lot of feathers within the communities most impacted by the rule.

[See also: CMS releases overdue Sunshine Act guidance.]

Last spring, CMS delayed implementation of the act so it could fine tune the final rule and give organizations more time to get ready for implementation.

[See also: CMS delays implementation of Sunshine Act.]

In a statement released Friday announcing the final rule, CMS said that the increased transparency offered by the rule “is intended to help reduce the potential for conflicts of interest that physicians or teaching hospitals could face as a result of their relationships with manufacturers.”

CMS said that manufacturers and GPOs will have the chance to review and correct reported information prior to publication. Organizations must begin collecting the required data by Aug. 1 of this year and begin reporting it to CMS by March 31, 2014.

While the industries impacted most by the rule are still digesting it, early response has been cautiously positive.

There may be some grumbling about the cumbersome reporting requirements, said Lee Lasris, a health law attorney and founding partner of the Florida Health Law Center, but “(f)or the most part, people are okay with the rule such as it is.”

However, healthcare lawyers like Lasris recognize the final rule has some soft spots.

Lasris said he wasn’t convinced the civil money penalties will be enough of a disincentive to discourage circumventing the rules, and he doesn’t think CMS drilled down far enough.

“It doesn’t require the manufacturer to make inquiry of the representatives as to whether or not they have a financial relationship with the physicians,” he said. “With that, the manufacturer is allowed to simply not ask the question.”

Further, there are certain distributors along the chain of sale of a product who could have relationships with physicians but are excluded from disclosure if they don’t have title to the product. “It’s kind of weird,” Lasris said. “There’s a big loophole that you can drive a Mack truck through.”

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