MedPac Discussed The Public Reporting of Physician’s Financial Relationships

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MedPAC Considers New Requirement for Financial Disclosure

The Medicare Payment Advisory Commission (MedPAC) is an independent Congressional agency established to advise the U.S. Congress on issues affecting the Medicare program. The Commission's statutory mandate is quite broad: In addition to advising the Congress on payments to private health plans participating in Medicare and providers in Medicare's traditional fee-for-service program, MedPAC is also tasked with analyzing access to care, quality of care, and other issues affecting Medicare.

MedPAC Recommends Public Reporting of Financial Relationships with Physicians and Others

On Thursday, October 2, 2008 the Medicare Payment Advisory Commission (Medpac) held a public meeting, which Heart Rhythm Society staff attended, to discuss four draft recommendations regarding public reporting of physician’s financial relationships. The panel's recommendations will likely be included in the new version of the Sunshine Act, which will be re-introduced next year. The initial recommendations were:

Draft Recommendation 1
Congress should require all manufacturers (as well as their subsidiaries) of drugs, biologicals, devices, and supplies to report to the Secretary their financial relationships with:

physicians and other prescribers
hospitals and medical schools
organizations that sponsor continuing medical education (CME)
patient organizations, and
professional organizations

Manufacturers should be required to report payments if the total annual value of payments to a recipient exceeds $100. This threshold would be adjusted annually based on inflation.

Relationships that would be reported include:

gifts, food, entertainment, honoraria, research, funding for education and conferences, consulting fees, investment interest, product royalties
discounts, rebates, and free samples for patient use would be excluded
companies would have to report:
- value, type, and date of each payment
- name, specialty, Medicare billing number (if applicable), and address of
  each recipient

Comments
Some MedPAC Commissioners argued that drug samples should be required in reporting for several reasons, including that they are distributed to encourage prescribing of more expensive drugs and that the samples market amount to about $18 billion a year. Others suggested that they should not be reported or should be reported through a different “non public” process because those samples can be passed along to low-income patients struggling with high drug costs.
The MedPAC staff will draft two alternative recommendations on drug samples. One would call for a lower level of reporting on samples, but would require enough reporting to allow data to be analyzed and studied. A second would require the same level of reporting as the one specified for other financial relationships.

Draft Recommendation 2
Congress should direct the Secretary to post the information submitted by manufacturers on a public website in a format that is searchable by:

manufacturer
recipient name, Medicare billing number, and specialty
type of payment
year

Comments
Privacy protections for database: Some Commissioners argued that the provider’s Medicare billing number should not be available to the public because of potential identity theft and Medicare fraud.The Commission agreed that the provider’s Medicare billing number will not appear on the public website and that a data use agreement should be required before researchers and others could link information on financial relationships and Medicare claims data through a Medicare billing number.

Threshold for payments that should be reported: Some Commissioners argue that the amount should be $0. Others thought that $100 is a reasonable amount. In the end, the Commissioners decided not to amend the draft recommendation.

Draft Recommendation 3
Congress should require all hospitals and Ambulatory Surgical Centers( ASCs) to annually report each physician who directly or indirectly owns an interest in a hospital or ASCs (excluding ownership of publicly traded stock). The Secretary should post the information on a searchable website.

Comments
Some Commissioners noted that physicians could have financial relationships with other outpatient providers in addition to ASCs; examples of these include independent diagnostic center, and radiation diagnostic and therapy centers.
In the end, the Commission agreed that the list of recipients of payments should be broadened to include the entities mentioned above as well as pharmacists, health plans, and Pharmacy Benefits Management (PBM).

Draft Recommendation 4
Congress should require the Secretary to report on the prevalence of various arrangements which could inform future decisions on what types of relationships hospitals should publicly report.

Comments
The Commission agreed to broaden the list of recipients of payments to included hospitals, ASCs, independent diagnostic centers, radiation diagnostic and therapy centers, pharmacists, health plans, and PBMs.