It’s back to the grind after the long holiday, but before the year was out, CHS left us with some very interesting reading --the Physician Payments Sunshine Provisions proposed rule. Much of the discourse and interpretation about the legislation has been focused on the payment or other transfers of value (PTOV) reports provided to covered recipients. The other shoe to drop, of course, surrounds CHS’s proposed report for applicable manufacturers and group purchasing organizations (GPOs) on physician ownership or investment interests (POII).
Here are a few more interesting nuggets gleaned from the proposed rule:
Under the requirements of this report, there is some divergence from the definitions provided by CMS as they relate to PTOV report. For instance:
Group purchasing organizations (GPOs) only include those entities that procure covered drugs, devices, biologicals, or medical supplies for purposes other than their own use even if those organizations are wholly or in part owned by physicians. Entities that must report are those that resell or distribute any covered drugs, devices, biologicals, or medical supplies to others.
Who are physicians? Here is another divergence from some of CMS’s potential common definitions. Section 2 differs from section 1 in that section 2 does not use the term "covered recipient" which excludes PTOV to physician employees of an applicable manufacturer or GPO. Section 2 specifically calls out physicians which ostensibly includes any physician, regardless of employer.
Similarly, ownership and investment interests of immediate family members of physicians must also be reported under this provision. Immediate family members include:
- Natural or adoptive parent, child, or sibling;
- Stepparent, stepchild, stepbrother, or stepsister;
- Father-, mother-, daughter-, son-, brother-, or sister-in-law;
- Grandparent or grandchild;
- Spouse of a grandparent or grandchild.
While it’s easy to understand the reasoning behind tracking such interests to close relatives of physicians, it’s equally easy to appreciate the difficulty in obtaining and verifying reliable information. The most likely scenario for this report is self-disclosure and auditing.
Just as the responsibility for the PTOV report lies squarely with applicable manufacturers and GPOs, the responsibility for the POII report may lie with physicians. The data sources for such a report are foreign to those involved in providing services to generate the PTOV report. For those of us familiar with financial independence reporting, you can appreciate the effort to create a useful and accurate POII report. For key stakeholders in the proposed rule, I suggest vigorous commentary to CMS on this requirement.
Additional points of note in the proposed POII report are below:
Ownership or investment interests in an applicable manufacturer or GPO include the following:
- Stock and stock options (other than those received as compensation)
- Loans, bonds and partnership shares,
- Limited Liability Company (LLC) memberships,
- Financial instruments secured with an entity's property or revenue or a portion of that property of revenue.
Ownership or investment interests in an applicable manufacturer or GPO exclude the following:
- Investment interest as part of a publicly traded security or mutual fund;
- Interest in an applicable manufacturer or GPO’s retirement plan offered by that employer to the physician (or a member of his or her immediate family);
- Stock options and convertible securities received as compensation (prior to being exercised or converted;
- An unsecured loan through a lending company;
- Ownership or investment interests included in the PTOV report.
By this time, your spend-transparency governance body should have already met to review and interpret the proposed rule. If you haven’t already done so, assign portions of the rule to team members and decide whether a comment is warranted. For those worthy of comment, draft a concise response for each and gain consensus with your governance body. Once there’s agreement, immediate submission to CMS should follow. With the deadline for comments to CMS quickly approaching, consult with your governance body members and submit your viewpoints on the proposed rule in writing by February 17, 2012.