BY RUTHANN RICHTER
Beginning Aug. 1, pharmaceutical and medical-device companies will collect information about their payments to doctors and teaching hospitals for publication in a public online database, which is scheduled to go live next year.
The Physician Patients Sunshine Act, passed in March 2010 as part of the Affordable Care Act, requires these companies to disclose to the federal government and the public payments over $10 to physicians and teaching hospitals every year. This includes consulting fees; honoraria: gifts: compensation for food, travel, education or conferences: research funding: stock or stock options: investment income: royalties; and licenses.
The law is intended to create more transparency in industry-provider relations. It aims to help consumers make better informed decisions and alert them to physicians’ potential conflicts of interest, which can be detrimental to care and contribute to higher health-care costs. But given the very large volume and complexity of data involved, there is concern among both industry and physician groups about the potential for errors in the new system, which could lead to confusion among consumers.
“Faculty should be aware that virtually all payments made to physicians from companies are going to become a matter of public knowledge and availability,” said Harry Greenberg, MD, senior associate dean for research at the School of Medicine. “I am hopeful that the specific purpose for the payments will be clear and accurate in the public database. For instance, the law requires companies to report payments for specific research projects, which would be totally appropriate and important. Such payments, of course, actually are made to Stanford University, not the individual PI. The university then uses them to fund specific research projects. It also includes reporting of payments for participation in speakers’ bureaus, which is something not permitted at the medical school. I hope the database makes the reasons for specific payments clear and that the companies will report them accurately. But there is potential, given the massive amount of complex data, that there will be errors.”
The law is part of a larger movement nationwide toward greater transparency in physician-industry relationships. Several states, including Maine, Massachusetts, Minnesota and Vermont, already require public reporting of these financial relationships. And some companies have already voluntarily disclosed physician payments on their own public websites in anticipation of the new law.
The School of Medicine now publicly discloses information about faculty consulting relationships with industry in the academic profiles on its website. If a faculty member received $5,000 or more from a company for consulting work, such as board membership or an advisory position, that is listed on his or her profile. The postings are drawn from the information that all faculty members are required to submit to the university about their financial relationships with outside entities.
But the new sunshine law takes it a step further, including both a wider range of types of payments to physicians, such as money paid to the university for research by a principal investigator, and more detailed accounting of amounts over $10 a year.
Under the new law, companies will begin compiling information on any payments they make starting Aug. 1 and continuing through Dec. 31. This data will form the basis for the 2013 reports, which will be made public in an online, searchable database on Sept. 30, 2014. (The first reporting cycle includes only five months of 2013, but future reports will include a full calendar year.)
To review these reports and ensure their accuracy, physicians must register in the system, which will be managed by the Centers for Medicare & Medicaid Services. Registration begins in January.
“We are strongly advising faculty to register so they will be notified when their data are ready to be reviewed and can make sure the information is accurate and, if need be, engage in the dispute-resolution process,” said Kathy Gillam, director of the university’s conflict-of-interest program.
It will be up to individual faculty members to monitor the data reported on payments to them and, as needed, to work with companies to correct what they believe may be faulty figures. Physicians will have the opportunity to appeal the data in question in the second quarter of 2014. The law does not apply to medical residents.
Kendra Martello, deputy vice president of strategic operations at the Pharmaceutical Research and Manufacturers Association, an industry trade group, said companies are scaling up, in some cases developing whole new departments, to comply with the law. As part of the association’s recommendations to the Centers for Medicare & Medicaid Services, companies would identify a point of contact whom physicians and hospitals could turn to for questions and dispute resolution, Martello said.
She said it is also important for physicians to update their profiles in the National Provider Plan and Enumeration System database, a registry of health-care providers, as companies will draw some basic information from this system for the reports.
One of the concerns with the system is how it will handle the reporting of research funding. Manufacturers are asked to use a separate reporting template, providing information on what institution received the funding, the amount, the study, any related product and the principal investigator. The information will be attributed to the principal investigator, and while it should be categorized as research funding — money that goes to the institution, not the individual faculty member — that may not always be clear.
“There is a very big difference between the money that goes to a faculty member, into their bank account for their own personal use, and money that goes to Stanford for support of a sponsored research project and is used to fund part of a specific faculty member’s research effort,” Greenberg said. ” I think this situation has the potential to be very confusing to the public.”
And there is a lot room for error. For instance, on a recent pharmaceutical website, a faculty member was reported as having received a $372,000 honorarium from a company, when in fact the payment was for sponsored research in which the physician served as principal investigator, Gillam said.
There are other potential pitfalls in the system. For instance, the industry-related data in the school’s academic profiles is posted on a different time schedule than the data in the new system, so there will likely be discrepancies between the two, raising potential questions.
“We are going to do everything we can to make sure there isn’t this disparity, but I also encourage faculty to look because the media and other groups will also be looking,” Greenberg said.
There has been speculation that disclosure of industry relationships could prompt doctors to change their behavior, including their drug-prescribing habits. Some might choose to avoid industry connections altogether because of worries about patient and peer backlash or the potential for media or governmental scrutiny, two health policy experts at Harvard noted in a May 30 perspective in the New England Journal of Medicine. But based on existing evidence, they conclude it’s unlikely either patients or physicians will make major changes in their practices as a result of the disclosure system.
Martello, with the industry group, said her concern is that the new system will discourage physicians from participating in vital clinical research.
“My fear is that physicians will not want to conduct industry-sponsored research anymore, and clinical innovations will suffer,” she said. “It’s important to tell the story of the value of these interactions and how important they are in terms of innovation in care.”
Stanford University Medical Center integrates research, medical education and patient care at its three institutions – Stanford University School of Medicine, Stanford Hospital & Clinics and Lucile Packard Children’s Hospital. For more information, please visit the Office of Communication & Public Affairs site at http://mednews.stanford.edu/.