CMS Proposals Seek to Increase Transparency In Health Care


December 14, 2011—The Centers for Medicare & Medicaid Services (CMS) announced a proposed rule that is intended to increase public awareness of financial relationships between drug and device manufacturers and certain health care providers. 

The agency stated that this step was undertaken as part of implementing the Affordable Care Act, which is designed to increase transparency in the health care system while leading to better care at lower costs. CMS stated that the increased transparency from the proposed rule may reduce the potential for conflicts of interest that physicians or teaching hospitals might face as a result of their relationships with manufacturers. The proposed rule can be downloaded from the Federal Register.

Peter Budetti, MD, who is CMS Deputy Administrator for Program Integrity, commented, “When people are faced with the difficult task of choosing the right doctor, they need all the information they can gather. If your doctor is taking money from manufacturers of prescription drugs, suppliers of wheelchairs, or other devices, you deserve to know about it. Disclosure of these relationships will discourage the inappropriate influence on clinical decision making that sometimes occurs while still allowing legitimate partnerships.”

According to CMS, the proposed rule would require manufacturers of drugs, devices, biologicals, and medical supplies covered by Medicare, Medicaid, or the Children’s Health Insurance Program to report to CMS payments or other transfers of value they make to physicians and teaching hospitals. The proposed rule would also require manufacturers and group purchasing organizations (GPOs) to disclose to CMS physician ownership or investment interests.

The new reporting requirements will affect drug and biologic manufacturers, medical device or supply manufacturers, and GPOs. These organizations, as well as the physicians and teaching hospitals, would be allowed an opportunity to review and correct information before publication.

The agency advised that the Affordable Care Act provides that violators of the reporting requirements will be subject to civil monetary penalties, capped at $150,000 annually for failing to report, and $1,000,000 for knowingly failing to report.

CMS proposed that data collection will not begin on January 1, 2012, and manufacturers and GPOs do not need to begin data collection until final regulations are issued. Depending on the timing of the final rule, CMS is proposing that manufacturers and GPOs will be required to submit a partial year on March 31, 2013. Once the data have been submitted, CMS will aggregate manufacturer submissions at the individual physician and teaching hospital level, provide them with a 45-day period to confidentially review and, if necessary, correct the data, and make the data publicly available by September 30, 2013. CMS will accept comments on the proposed rule until February 17, 2012, and will respond to them in a final rule to be published in 2012.


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