What Otolaryngologists Need to Know About the Physician Payment Sunshine Act

In addition, manufacturers and GPOs must report all ownership and investment interests held by physicians or immediate family members of physicians. Required information includes investment amounts, the value and terms of each ownership or investment interest, payments to each physician and background information regarding each physician investor or owner.

The proposed rule was criticized by some for establishing onerous reporting requirements, particularly for manufacturers that only make a small number of covered products. CMS revised the requirements so that if a manufacturer receives less than 10 percent of its gross revenue from covered products during the previous year, then the manufacturer is only required to report payments associated with the covered products. In order to meet this exception, the manufacturers will be required to attest that less than 10 percent of their gross revenue came from covered products. Despite public comments that voiced disagreement with the proposed rule, the final rule still requires manufacturers that do not meet the specific exceptions to report all payments or transfers of value, not just those associated with a covered product.

The final rule provides guidelines for manufacturers to determine the values to be reported, and includes the option for manufacturers to provide contextual information about the payment that would be disclosed on the public webpage. The final rule and its commentary also provide clarifications regarding the payments excluded from the reporting requirement. For example, payments made at the request of or designated on behalf of a physician are still reported and attributed to the physician. However, if the physician does not accept payment and does not request that the payment get directed to another individual or entity, then it does not need to be reported. So, otolaryngologists who have historically directed their consulting fees or honoraria to a charity will see the payments attributed to them, under the category of charitable contribution, on the CMS public webpage.

It is important to note that, while physicians and other covered recipients will have the opportunity to review their individual data that the manufacturer electronically submits, if there is a dispute regarding such information the data still may become public if the error is not corrected during the review and correction period. It will be important for otolaryngologists to review their data in order to try to resolve any issues prior to the public disclosure. In order to avoid the disclosure of potentially inaccurate information, otolaryngologists should consider negotiating into future agreements with manufacturers (and request to amend existing agreements) the right to review data prior to the manufacturer’s submission to CMS. Once the data are published and the dispute resolved, information cannot be modified until the following year.

Timeframe for Reporting

Reports must be filed annually by the applicable manufacturer/GPO, with each report reflecting payment, ownership and investment information for the previous calendar year. Given the delay in issuing the final rule, manufacturers and GPOs will have until August 1, 2013 to begin collecting information, and then must report the information to CMS by March 31, 2014, with the initial annual report limited to the period from August 1, 2013 through December 31, 2013.