Sunshine Act

SUNSHINE ACT PPACA LEGISLATION REQUIRING TRANSFER OF VALUE REPORTING

Subject: Recommendations on Preparation for Impending PPACA Legislation

Background: The Physician Protection and Affordable Care Act (PPACA) was signed into law in 2010 as a part of the health care reform legislation. As part of this, the “Sunshine Act” requires the drug and device industry to make quarterly reports on payments and “transfers of value” to physicians. This includes (but is not limited to) gifts valued at $10 (or less if the aggregate calendar-year amount exceeds $100), all the way to consulting fees, grants, speaker fees, entertainment or gifts. There are some minor exceptions. Items would be tracked via the prescriber’s National Provider Identifier (NPI), a CMS-issued HIPAA Administrative Simplification Standard required for all administrative and financial transactions. NPI Numbers are public record and can be accessed through the NPI Registry database.

Final legislation is to be released in October 2011, and the industry will begin to track in January 2012. Payment data will be made publicly available through a government database beginning September 2013.

Industry Implications: A TriStar Publishing survey found that 58% of healthcare association professionals were unaware of this impending NPI number tracking legislation, and 78% of those surveyed said their organizations had never discussed it. A full 90% of those surveyed said their organization does not currently have a plan to collect NPI numbers to support this tracking requirement.

A Communications Media, Inc. ByDoctor® OnDemand(SM) survey of physicians found that 90% of physicians do visit pharmaceutical company exhibit booths at medical conferences (75% to get new product information, 58% to get updated information, and 32% to meet with sales reps.) 94% of those surveyed understood the purpose of NPI numbers, and more than half (51%) knew of the upcoming legislation. The survey also found that while physicians are aware of their NPI numbers, awareness of the Sunshine Act provisions, as they directly affect medical meetings, is low.

Recommendation: Healthcare Associations need to educate their membership so they can develop a better understanding and be more comfortable with providing what is needed to assist their Industry partners. For this to happen, pharmaceutical and device companies who exhibit at healthcare association conferences must continue to stress its importance with association partners. If associations don’t collect NPI numbers at registration, eventually pharmaceutical and device company compliance departments may prohibit exhibiting at these meetings. Implementation of an education process is critical. We also recommend pharmaceutical and device companies set NPI number validation processes internally to prepare for this impending legislation since event-supplied NPI numbers are likely to be attendee-reported and provided to industry without validation.