Sunshine Bill Renews Focus on Conflicts of Interest

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While health care players and politicians have long debated the issue of medical transparency, deeper scrutiny of physician–industry relationships has produced a general consensus on one aspect of the dispute: The climate has changed.

imageThomas Hoffman, JD

Thomas Hoffman, JD, associate general counsel for the ACR®, says, “Physicians need to look before they leap; also, industry (for its part) needs to be more careful because the government, through the Congress—as well as through federal agencies like the OIG—is looking more closely at relationships and what kind of effect these kinds of payments might have on medical decision making.”

A prime example of the growing interest in physician disclosure is the Physician Payments Sunshine Act, legislation that was reintroduced this year to cast an even more watchful eye on potential conflicts of interest. Cosponsored by Sens Chuck Grassley (R–IA) and Herb Kohl (D–WI), the revised bill would require physicians to disclose payments of $100 or more from pharmaceutical and device manufacturers.

According to American Medical News, Grassley had headed an investigation into “academic physician researchers who received millions in industry payments but allegedly failed to report the income as required by the National Institutes of Health and their universities.”¹

The original bill had a higher threshold for public disclosure, mandating that physicians report payments of $500 or more. The revised version requires physicians to disclose any investments in and ownership of manufacturers, and companies must report payments and other transfers of value—including consulting fees, gifts, entertainment, food, and travel, among others.

Failure to report payments as a result of an oversight can warrant fines between $1,000 and $10,000, up to $150,000 per company per year. For those with deliberate noncompliance, fines can total up to $1 million per company. “Radiologists need to realize that the so-called rules have changed,” Hoffman says. “It’s appropriate to take a step back and consider the perception, as well as the reality, of how a payment or something of value might affect their decision making.”

Under the proposed legislation, the HHS secretary is responsible for creating a procedure for companies to disclose, in an online format that is easily accessible to the public, the following payments or transfers of value:

  • consulting fees,
  • honoraria,
  • gifts,
  • entertainment,
  • food,
  • travel,
  • education,
  • research,
  • charitable contributions,
  • royalties or licenses,
  • current or prospective ownership or investment interest,
  • compensation for serving as faculty or as a speaker for a CME program, and
  • grants.

The new bill also contains a clause that can postpone reporting of payments made for clinical investigations or product-development agreements for up to two years.

Following the Lead

American Medical News reported that while the original bill also preempted state disclosure laws, the latest version contains language that enables states to enact additional requirements. Maine state Rep Sharon Treat (D), executive director of the National Legislative Association on Prescription Drug Prices, told the publication that the bill delineates a federal standard and allows for states to “fill in the gaps.”¹ In fact, six states, including Minnesota and Massachusetts, have passed laws that govern disclosure of industry payments to physicians. “The federal rules are the floor, not the ceiling,”¹ she told American Medical News.

Hoffman points out that many medical institutions, academic medical centers, and private practices have, in some respects, jumped ahead of the bill. Over the last couple of years, leading institutions such as Stanford, Johns Hopkins, and the Mayo Clinic have developed their own codes of ethics and standards for their physicians. “Some have gone so far as to prohibit their physicians and employees from accepting anything of value—even notepads, pens, and coffee mugs, let alone lunches or dinners—from the manufacturer,” Hoffman notes. “Some are also setting up their own Web sites that are available to the public. They’ve realized that it might be better to act rather than react, in this exercise.”

Recently, a new piece of legislation written by Sen Max Baucus (D–MT) came out of the Senate Finance Committee proposal. Containing much of the same language as the Sunshine Act, the Baucus bill requires manufacturers to report payments and other transfers of value of $100 or more