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2/12/2014
1
The Sunshine Act and Other Laws
Affecting Vendor Relations
Kelly S. McIntosh
February 13, 2014
Roadmap
 Here ...
2/12/2014
2
Preliminaries
 Presentation will be recorded and available for
download at www.hhhealthlawblog.comg
 If you ...
2/12/2014
3
History of the Sunshine Act
History of the Sunshine Act
 March 2010 – Affordable Care Act Enacted
– Section 6...
2/12/2014
4
Key Terms
 Is there an Applicable Manufacturer or Applicable
GPO?
– Applicable Manufacturers are entities tha...
2/12/2014
5
Key Terms
 Is it a Covered Product?Is it a Covered Product?
– Covered drugs, devices, biologicals or medical ...
2/12/2014
6
Disclosure of Compensation
 Applies to Applicable
M f t t GPOManufacturers – not GPOs
 Direct and indirect t...
2/12/2014
7
Disclosure of Compensation
 “Nature of Payment” identifiers:
▪ Cash or cash equivalent ▪ Education
▪ In-kind ...
2/12/2014
8
Disclosure of Compensation
 CME
– Payments for speaking at events certified/accredited by
specified accrediti...
2/12/2014
9
Disclosure of Compensation
 Exclusions from reporting:
– Indirect transfers where the identity of the Covered...
2/12/2014
10
Disclosure of Ownership
 Applicable Manufacturers and Applicable GPOs
must disclose
 Applies to physicians ...
2/12/2014
11
Timing and Form of Reports
 Requires Applicable Manufacturers to register in
two separate systems
 Phase 1 ...
2/12/2014
12
Timing and Form of Reports
 Attestation required
– Information timely, accurate and completeInformation time...
2/12/2014
13
Timing and Form of Reports
 CMS must publish the data online, available
publicly
 Must be searchable and un...
2/12/2014
14
Civil Monetary Penalties
 Failure to report (without intent) = fines up to
$10,000 per instance with a cap o...
2/12/2014
15
Other Laws on Vendor Relations
AKSStark
Drug
Samples
Sunshine
Act
Conflicts of
Interest
Samples
PHS Financial...
2/12/2014
16
PHS Financial Conflicts of Interest
 Investigators must disclose “significant financial
interests” to their ...
2/12/2014
17
Other Conflicts of Interest and
Clinical Trial Resources
 Conflicts of Interest Policies and Guidance
– FDA
...
2/12/2014
18
Federal Fraud & Abuse Laws
 Stark Law
– Prohibits physicians from referring designated health
i h l h i if h...
2/12/2014
19
State Laws
 States may have laws that regulate vendorStates may have laws that regulate vendor
arrangements ...
2/12/2014
20
Prepare
 Create policies and processes to track vendor
arrangements
 Provide training
 Audit and evaluate ...
2/12/2014
21
Additional Holland & Hart
Resources
 Healthcare Update and Health Law Blog
– Under “Publications” at www.hol...
2/12/2014
22
Questions?
K ll S M I t hKelly S. McIntosh
Holland & Hart LLP
5441 Kietzke Lane, Second Floor
Reno, Nevada 89...
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Sunshine Act and other Laws Affecting Vendor Relations

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 Here Comes the Sun – New Transparency for
Vendor Relationships
 To Whom Does the Sunshine Act Apply?
 What is the Disclosure Process?
 What are the Penalties and Consequences?
 Other Laws and Legal Considerations for Vendor
Relations
– Conflicts of Interest
– Drug Samples
– Fraud and Abuse Laws

Publié dans : Droit
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Sunshine Act and other Laws Affecting Vendor Relations

  1. 1. 2/12/2014 1 The Sunshine Act and Other Laws Affecting Vendor Relations Kelly S. McIntosh February 13, 2014 Roadmap  Here Comes the Sun – New Transparency for Vendor Relationshipsp  To Whom Does the Sunshine Act Apply?  What is the Disclosure Process?  What are the Penalties and Consequences?  Other Laws and Legal Considerations for Vendor RelationsRelations – Conflicts of Interest – Drug Samples – Fraud and Abuse Laws
  2. 2. 2/12/2014 2 Preliminaries  Presentation will be recorded and available for download at www.hhhealthlawblog.comg  If you have questions, please submit them using chat line or e-mail me at ksmcintosh@hollandhart.com.  If you experience technical problems during the program, please contact Luke Kelly at lskelly@hollandhart.com Preliminaries  This program offers an overview of legal considerations for vendor relations, but the applicability to specific arrangements and providers will vary  This program does not establish an attorney-client relationship  This program does not constitute the giving of legal advice
  3. 3. 2/12/2014 3 History of the Sunshine Act History of the Sunshine Act  March 2010 – Affordable Care Act Enacted – Section 6002 – Provisions known as “Sunshine Act”Section 6002 Provisions known as Sunshine Act  December 19, 2011 – CMS publishes Sunshine Act proposed rule – 76 Fed. Reg. 78742  February 8, 2013 – CMS publishes Sunshine Act final rulefinal rule – 78 Fed. Reg. 9458
  4. 4. 2/12/2014 4 Key Terms  Is there an Applicable Manufacturer or Applicable GPO? – Applicable Manufacturers are entities that produce, prepare, propagate, compound, or controvert a covered product, unless only for the entity’s use  Operating in the US  Applies to certain entities under common ownership (5% directpp p ( or indirect ownership)  Distributors, wholesalers or repackagers that do not hold title to Covered Products are excluded Key Terms  Is there an Applicable Manufacturer or Applicable GPO? – Applicable group purchasing organizations (GPOs) are entities that purchase, or arrange for purchase of, a covered product, unless only for the GPO’s use  Operating in the US  CMS specifically referenced physician-owned distributorsp y p y (PODs) in this category
  5. 5. 2/12/2014 5 Key Terms  Is it a Covered Product?Is it a Covered Product? – Covered drugs, devices, biologicals or medical supplies include in effect any product that is a prescribed drug or FDA approved or cleared device or medical supply which is available for payment under Medicare, Medicaid or CHIP. Key Terms  Is there a Covered Recipient? – Covered Recipients include teaching hospitals andCovered Recipients include teaching hospitals and physicians (except manufacturer employees)  Residents are exempted  Teaching hospital listing: – http://www.cms.gov/Regulations-and- Guidance/Legislation/National-Physician-Payment-Transparency- Program/Teaching-Hospitals.html – List organized by state and includes hospital names addressesList organized by state and includes hospital names, addresses and taxpayer identification numbers – Updated listing will be available approximately 90 days prior to the start of each data collection period
  6. 6. 2/12/2014 6 Disclosure of Compensation  Applies to Applicable M f t t GPOManufacturers – not GPOs  Direct and indirect transfers of value – Value is referred to as having “discernible economic value on the open market” Not the same definition used in other laws such as– Not the same definition used in other laws, such as fraud and abuse laws Disclosure of Compensation  For each covered recipient, the following information must be disclosed: ▪ Name ▪ Form of payment ▪ Address ▪ Nature of payment ▪ NPI number ▪ Covered product ▪ Specialty ▪ Eligibility for delayed publication ▪ State license number ▪ Payment to third parties ▪ Amount of transfer of value ▪ Ownership statement ▪ Date of transfer ▪ Optional contextual information
  7. 7. 2/12/2014 7 Disclosure of Compensation  “Nature of Payment” identifiers: ▪ Cash or cash equivalent ▪ Education ▪ In-kind items or services ▪ Research ▪ Ownership interest ▪ Charitable contribution ▪ Return on investment ▪ Royalty or license ▪ Consulting fee ▪ Ownership interest ▪ Fee for other type of service ▪ Compensation for speaking at ▪ Honoraria non-certified CME ▪ Gift ▪ Compensation for speaking at ▪ Entertainment certified CME ▪ Food and beverage ▪ Grant ▪ Travel and lodging ▪ Space rental or facility fee Disclosure of Compensation  No “other” category of payment identifiers – eliminated in final rule  Food and beverages – The value of group meals can be divided by the individuals actually partaking – Buffets at large events can be disregarded
  8. 8. 2/12/2014 8 Disclosure of Compensation  CME – Payments for speaking at events certified/accredited by specified accrediting bodies do not need to be disclosedspecified accrediting bodies do not need to be disclosed if Applicable Manufacturer does not pay the speaker directly or select the speaker  Research – Required information is different  Name of research institution or individual receiving payment  Name of study  Covered products subject to the study  Amount of payment  Principal investigator information  clinicaltrials.gov identifier (optional) Disclosure of Compensation  Limitations on reporting: – If less than 10% of total gross revenue comes from Covered Products, only payments related to Covered Products must be disclosed – If the Applicable Manufacturer has separate operating divisions that do not manufacture any Covered Products, only payments related to divisions that do manufacture Covered Products must be disclosed
  9. 9. 2/12/2014 9 Disclosure of Compensation  Exclusions from reporting: – Indirect transfers where the identity of the Covered Recipient is unknown to the Applicable Manufacturer – Transfers of value of less than $10 (not to exceed an aggregate of $100 in a year)  Amount will increase each year based on CPI  Items of less than $10 value provided at large-scale events do not need to be tracked (ex. pens distributed at a conference) – Samples and coupons for patient use – Educational materials for patients Disclosure of Compensation  Exclusions from reporting: – Short-term loans (not exceeding 90 days) – Items or services under warranty – Discounts – In-kind items used for charity care – Dividends on publicly traded stock P t l t d l i l t l l d i i t ti– Payments related exclusively to legal or administrative proceedings – Transfers of value in a personal relationship
  10. 10. 2/12/2014 10 Disclosure of Ownership  Applicable Manufacturers and Applicable GPOs must disclose  Applies to physicians and their family members – Similar to the definition of ownership or investment interest used in the Stark Law  The following information must be disclosed: ▪ Name ▪ Dollar amount of investment ▪ Address ▪ Current value and terms ofAddress Current value and terms of ▪ NPI number ownership interest ▪ Specialty ▪ Direct and indirect transfers of ▪ State license number value made to or on behalf of the physician Timing and Form of Reports  Required to be submitted by the 90th day of each calendar year  Payments reported for previous calendar year – For 2013 reporting, the period to be covered in reporting is from August 1, 2013 to December 31, 2013  First annual report due March 31, 2014 BUT  Just last week, CMS released information on the two-step process for submitting data in the 2013 program cycle
  11. 11. 2/12/2014 11 Timing and Form of Reports  Requires Applicable Manufacturers to register in two separate systems  Phase 1 – February 18, 2014 to March 31, 2014 – Applicable Manufacturers may register in the CMS Enterprise Portal (EIDM system) and submit corporate profile information and aggregate 2013 payment data.  Phase 2 - Begins in May 2014 and extends for no fewer than 30 days - includes registration in the Open Payments system, submission of detailed 2013 payment data, and legal attestation to the accuracy of the data. Timing and Form of Reports  After the conclusion of Phase 2, by August 1, 2014, information will be available for healthcare providers and manufacturers to review and correctproviders and manufacturers to review and correct inaccuracies  CMS notes that no action is needed from Covered Recipients at this time.  More information on Phase 1 and Phase 2 and l t l t il blsample templates available: – https://www.cms.gov/Regulations-and- Guidance/Legislation/National-Physician-Payment- Transparency-Program/Data-Submission-and- Attestation.html
  12. 12. 2/12/2014 12 Timing and Form of Reports  Attestation required – Information timely, accurate and completeInformation timely, accurate and complete  Optional to file assumptions document – Not publicly available even if filed – Enforcement agencies can obtain from CMS  Disclosure of research payments may be postponed until 4 years from transfer or until FDApostponed until 4 years from transfer or until FDA approval of the product, whichever is earlier – Responsibility of Applicable Manufacturer to notify CMS if a payment is eligible for delayed publication Timing and Form of Reports  After reporting, CMS notifies Covered Recipients of information available for reviewof information available for review – Physicians and teaching hospitals can voluntarily register with CMS to facilitate notification  45 day review period  Additional 15 days to resolve disputes  CMS makes data publicly available by September CMS makes data publicly available by September 30th each year  First CMS report to Congress: April 1, 2015
  13. 13. 2/12/2014 13 Timing and Form of Reports  CMS must publish the data online, available publicly  Must be searchable and understandable  Must be able to be aggregated and downloaded  Must include any enforcement activities taken  Will not include physician NPI numbers Dispute Process  Covered Recipients provide notice of dispute to CMS  CMS forwards the dispute to the reporting entity  Disputes not timely resolved result in CMS’ indication that the data is the subject of a dispute  If a dispute is resolved after the dispute period, the initial data will be reported with the dispute notedinitial data will be reported with the dispute noted and the correction will be published when CMS next publishes data
  14. 14. 2/12/2014 14 Civil Monetary Penalties  Failure to report (without intent) = fines up to $10,000 per instance with a cap of $150,000$ , p p $ ,  Failure to report (with intent) = fines up to $100,000 per instance with cap of $1,000,000  Records must be maintained for 5 years - CMS has the right to conduct audits Resources  CMS Resources: – http://www.cms.gov/Regulations-and- Guidance/Legislation/National-Physician-payment- Transparency-Program/index.html – Questions can be submitted to: openpayments@cms.hhs.gov
  15. 15. 2/12/2014 15 Other Laws on Vendor Relations AKSStark Drug Samples Sunshine Act Conflicts of Interest Samples PHS Financial Conflicts of Interest  Institutions which receive research funding fromInstitutions which receive research funding from the Public Health Service (PHS) are subject to the related Financial Conflicts of Interest (FCOI) rules – Most recent final rule issued August 25, 2011 (76 Fed. Reg. 53256)  Require the management and disclosure of FCOI
  16. 16. 2/12/2014 16 PHS Financial Conflicts of Interest  Investigators must disclose “significant financial interests” to their institutions and update within 30p days of any new interest  Financial interests must be disclosed regardless of if related to PHS-funded research  Includes: – Amounts over $5000Amounts over $5000 – Ownership interest valued at over $5000 in publicly traded company or any value in privately held entity – Intellectual property rights PHS Financial Conflicts of Interest  Each institution must: – Have a conflicts of interest policy and provide educationHave a conflicts of interest policy and provide education and training to investigators – Designate an official to review disclosures – Determine if any significant financial interest could affect PHS-funded research  Website disclosure of financial interests must be made  Disclosures to PHS  Both PHS FCOI and Sunshine Act may apply!
  17. 17. 2/12/2014 17 Other Conflicts of Interest and Clinical Trial Resources  Conflicts of Interest Policies and Guidance – FDA htt // fd /R l t I f ti /G id / 12204 http://www.fda.gov/RegulatoryInformation/Guidances/ucm12204 5.htm – National Institutes of Health  http://www.nih.gov/about/ethics_COI.htm  http://grants.nih.gov/grants/policy/coi/resources.htm – Office for Human Research Protections htt // hh / h / hi /h bj t /fi lt /f id df http://www.hhs.gov/ohrp/archive/humansubjects/finreltn/fguid.pdf  Medicare Clinical Trial Policies – http://www.cms.gov/Medicare/Coverage/ClinicalTrialPoli cies/index.html?redirect=/clinicaltrialpolicies/ Drug Samples  The sale, purchase, or trade (or offer to sell, purchase, or trade) of prescription drug samples isp , ) p p g p prohibited – Under the Prescription Drug Marketing Act of 1987 (PDMA), as modified by the Prescription Drug Amendments of 1992 (PDA) and the FDA Modernization Act of 1997 (FDAMA)  Criminal and civil penalties for violations
  18. 18. 2/12/2014 18 Federal Fraud & Abuse Laws  Stark Law – Prohibits physicians from referring designated health i h l h i if h h i i hservices to a health care entity if the physician has an ownership interest in or compensation arrangement (direct or indirect) with the entity and no exception applies  Strict liability civil statute  Anti-Kickback Statute (AKS) – Prohibits knowingly and willfully offering, soliciting, paying or receiving remuneration in exchange for referring or arranging for services payable by a Federal health care program  Intent-based criminal statute Federal Fraud & Abuse Laws  Arrangements to Avoid – Benefits tied to or tracked with referrals of vendor dproducts – Gifting cash or cash equivalents  Some possible exceptions to the Stark Law and Safe Harbors under the AKS – ▪ Non-Monetary Compensation (Stark) ▪ Personal Services ▪ Medical Staff Incidental (Stark and AKS)Medical Staff Incidental (Stark and AKS) Benefits (Stark) – Remember that any analysis and the applicability of an exception or safe harbor will be fact-specific based on the parties and nature of the arrangement
  19. 19. 2/12/2014 19 State Laws  States may have laws that regulate vendorStates may have laws that regulate vendor arrangements and require disclosures  Need to determine the extent to which an applicable state law is preempted by the Sunshine ActAct Consequences  Heightened scrutiny – Public perception and media access – Source for government investigations  AKS and false claims theories of liability  Off-label promotion – Final rule on Sunshine Act does note that “financial ties alone do not signify an inappropriate relationship”  Changes in ArrangementsChanges in Arrangements – Average hourly payment to physicians for consulting dropped from $604/hr in 2006 to $299/hr in 2011.  Cutting Edge Key Opinion Leader Fair-Market Value and Aggregate Spend study press release 6/14/11
  20. 20. 2/12/2014 20 Prepare  Create policies and processes to track vendor arrangements  Provide training  Audit and evaluate overall compliance of arrangements  Calendar upcoming dates and time periodsCalendar upcoming dates and time periods – Reporting for Applicable Manufacturers – Review for Covered Recipients Additional Resources  OIG Compliance Resources – Draft OIG Compliance Program Guidance for Recipients f PHS R h A dof PHS Research Awards  http://oig.hhs.gov/fraud/docs/complianceguidance/PHS%20Rese arch%20Awards%20Draft%20CPG.pdf – OIG Compliance Program Guidance for Pharmaceutical Manufacturers http://oig.hhs.gov/authorities/docs/03/050503FRCPGPharmac.pdf  Roadmap for New Physicians: Avoiding Medicare Fraud and Abuse – http://oig.hhs.gov/compliance/physician- education/roadmap_web_version.pdf
  21. 21. 2/12/2014 21 Additional Holland & Hart Resources  Healthcare Update and Health Law Blog – Under “Publications” at www.hollandhart.com. – www.hhhealthlawblog.com – E-mail me at ksmcintosh@hollandhart.com  Future Webinars – February 27 – Identifying and Responding to HIPAA B hBreaches – March 13 – Fraud and Abuse Laws: FCA, Stark, AKS and CMP – March 27 – Wage/Hour Laws Additional Holland & Hart Resources  Past webinars covering related topics availablePast webinars covering related topics available through the Health Law Blog: – Stark – Anti-Kickback Statute – Civil Monetary Penalties laws
  22. 22. 2/12/2014 22 Questions? K ll S M I t hKelly S. McIntosh Holland & Hart LLP 5441 Kietzke Lane, Second Floor Reno, Nevada 89511 (775) 327-3004 ksmcintosh@hollandhart comksmcintosh@hollandhart.com

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