Press Release


Embargoed Until Contact

September 18, 2014

Sue Ducat
Director of Communications
(301) 841-9962
sducat@projecthope.org

   

The Physician Payments Sunshine Act

 

A new Health Policy Brief from Health Affairs and the Robert Wood Johnson Foundation looks at a section of the Affordable Care Act (ACA), known as the Physician Payments Sunshine Act (PPSA). The PPSA
spells out how medical product manufacturers are required to disclose to the Centers for Medicare and Medicaid Services (CMS) any payments or other transfers of value made to physicians or teaching hospitals as well as physician ownership or investment interests in certain manufacturers or group-purchasing organizations. These data, which have been collected since August 2013, were published for the first time earlier this week in a publicly searchable database and will be updated annually. There is a long history of financial relationships between physicians and medical product manufacturers, which can include anything from free meals to consulting, speaker fees, and direct research funding. This health policy brief looks at the PPSA and its impact on physician-manufacturer relationships.

 

Topics covered in this brief include:

 

    • What's the background? Over the past few years there has been a growing awareness among researchers and policy makers of the ways that physician-industry relationships can bias physician decision making, encourage inappropriate prescribing that drives up health costs, and undermine the independence and rigor of clinical research. A 2009 nationwide survey, published in the Archives of Internal Medicine, showed that nearly 84 percent of US physicians had some form of financial interaction with manufacturers of drugs, devices, biologicals, and medical supplies. In the past few years, at least five states have passed sunshine laws, and reports from the Medicare Payment Advisory Commission and the Institute of Medicine called for the establishment of a standardized, nationwide, mandatory public reporting program. After congressional efforts to create such a system failed to pass in 2007, its provisions were amended and incorporated as section 6002 of the ACA.

    • What's the debate? As the brief explains, most of the debate surrounding the implementation of the PPSA centers around two general issues: the administrative and legal challenges of establishing a nationwide public reporting system; and how reporting will ultimately impact patient, provider, and industry behavior. Physician and industry representatives have expressed concerns about how patients will interpret the information--and some physicians have argued that the threshold for determining "appropriate" physician-industry interaction is not always easy to establish and may vary by practice specialty. The effects of reporting on industry practice are also unclear. Some note that manufacturers have already begun moving away from traditional physician-marketing approaches, such as the increased use of direct-to-consumer advertising and reliance on medical scientific liaisons as well as increased marketing to payers. Taken together, these broader changes have the potential of partly undermining the goals of the PPSA, by encouraging the substitution of one form of undue influence for another.

    • What's next? Most of the data collected in the first reporting period were published in September 2014. As much as one-third of the reported data was withheld because of alleged inaccuracies, with these administrative issues still to be resolved. The full effects of the PPSA will likely not be felt for several years, by the industry, physicians, or the public. Most agree that simple disclosure is not sufficient to address financial conflicts of interest--and that more work is required to ensure that financial conflicts of interest are monitored and regulated appropriately.
 
 
About Health Affairs
 

Health Affairs is the leading journal at the intersection of health, health care, and policy. Published by Project HOPE, the peer-reviewed journal appears each month in print, with additional Web First papers published periodically and health policy briefs published twice monthly at www.healthaffairs.org. Read daily perspectives on Health Affairs Blog. Download weekly Narrative Matters podcasts on iTunes.