Affordable Care Act “sunshine rule” to increase transparency in health care

The Centers for Medicare & Medicaid Services (CMS) has announced a proposed rule
that will increase public awareness of financial relationships between drug and device manufacturers and certain health care providers.  CMS says this is one of many steps under the Affordable Care Act (ACA) designed to increase transparency in the health care system, which can lead to better care at lower costs.

The proposed rule would implement Section 6002 of the Affordable Care Act, and would require manufacturers of drugs, devices, biologicals, and medical supplies covered by Medicare, Medicaid, or the Children’s Health Insurance Program to report to CMS payments or other transfers of value they make to physicians and teaching hospitals.  The proposed rule would also require manufacturers and group purchasing organizations (GPOs) to disclose to CMS physician ownership or investment interests.

This increased transparency is intended to help reduce the potential for conflicts of interest. “If your doctor is taking money from manufacturers of prescription drugs, suppliers of wheelchairs or other devices, you deserve to know about it,” said Peter Budetti, M.D. CMS deputy administrator for Program Integrity.  “Disclosure of these relationships will discourage the inappropriate influence on clinical decision-making that sometimes occurs while still allowing legitimate partnerships.”

CMS estimates that roughly 150 drug or biologic manufacturers, 1,000 device or medical supply manufacturers, and 420 GPOs will be required to submit information to CMS on an annual basis pursuant to this provision.

The Affordable Care Act provides that violators of the reporting requirements will be subject to civil monetary penalties (CMPs), capped at $150,000 annually for failing to report, and $1,000,000 for knowingly failing to report.

CMS will accept comments on the proposed rule until Feb. 17, 2012, and will respond to them in a final rule to be published in 2012.

Click here to download the proposed rule