Print this page

Health Care Reform Act Calls for Increased Transparency in Physician Relationships

May 6, 2010

Part A of title XI of the Social Security Act was recently amended by section 6002 of the Patient Protection and Affordable Care Act of 2010. The amendment, entitled Transparency Reports and Reporting of Physician Ownership or Investment Interest, states that beginning March 31, 2013, every manufacturer of a covered drug, device, biological, or medical supply product operating in the United States will be required to electronically report information on payments or other transfers of value in excess of $10. Each year after 2013, the electronic reports will be due to the Secretary on the 90^th day of the calendar year. The following list describes what should be included in the report:

1. The name of the covered recipient ("C.R.")
2. Business address of C.R., and if the C.R. is a physician, the specialty and National Provider Identifier of the C.R.
3. Amount of payment or transfer of value
4. Date of payment or transfer of value provided
5. Description of the form of payment or transfer of value
6. Description of the nature of payment or transfer of value
7. Note whether the payment or transfer of value is related to marketing, education, or research specific to a covered drug, device, biological, or medical supply, and the name of such product
8. Any other information that the Secretary deems necessary

Additionally, certain payments made at the request or designated on behalf of a certain C.R. should be reported under the name of that C.R.

In addition to the above requirements, the following information should be reported regarding the ownership or investment interest of a physician in a manufacturer:

1. The dollar amount invested by the physician
2. The value and terms of the investment
3. Any payment or transfer of value provided to the physician
4. Any other information the Secretary deems necessary

Penalties for Noncompliance

Additionally, any manufacturer that knowingly fails to report in a timely manner is subject to no less than a $10,000 penalty, but no more than $100,000 penalty for each payment or transfer of interest and no more than $1,000,000 for each annual submission.

Public Availability

Beginning September 30, 2013, and June 30 each year thereafter, information provided to the Secretary regarding payment or transfer of value must be made available through an internet website. The information must:

1. Contain information describing the nature of the payment or transfer of value, and the name of the covered drug, device, biological, or medical supply
2. Contain information that it is easily aggregated and downloaded
3. Contain a description of any enforcement action taken; including any penalties imposed
4. Contain background information on the industry-physician relationship
5. NOT contain the National Provider Identifier
6. Provide the manufacturer with an opportunity to review and submit corrections to the information

Any manufacturer that fails to report in a timely manner is subject to no less than a $1,000 penalty, but no more than $10,000 penalty for each payment or transfer of interest and no more than $150,000 for each annual submission.

For more information about increased transparency in physician relationships contact HORNE Partner Kathy Watts at kathy.watts@horne-llp.com or 731.668.7070.