Device firms adjust to increased payment disclosure

  • Updated: March 8, 2014 - 2:00 PM

The risk of discrepancies rises when reporting of payments to medical professionals kicks in.

– Mark DuVal’s law firm has been busy teaching medical device and drug makers how to obey the Physician Payments Sunshine Act.

It is no easy task, says DuVal, a Minneapolis attorney who used to work for Medtronic Inc. and 3M Co.

New federal reporting requirements that began Feb. 18 are complicated and eventually will include public disclosure of most business expenditures to medical professionals valued at more than $5 per event or more than $100 cumulatively per year.

Thousands of companies across the country, including hundreds in Minnesota’s medical technology sector, fall under the act, which arose from concerns that undisclosed financial relationships between drug and device makers and health care providers influenced patient treatment.

“There are things the medical community just doesn’t realize are going to be reported,” said DuVal, whose firm DuVal & Associates has conducted daylong Sunshine Act seminars for over 100 companies. “Things they consider innocuous.”

Businesses, as well as group purchasing organizations, can now be fined $10,000 to $100,000 per violation for knowingly failing to report their financial ties to doctors, dentists, podiatrists, optometrists, licensed chiropractors and teaching hospitals. Unintentional reporting mistakes can garner fines of $1,000 to $10,000 per violation up to $150,000. Total fines cannot exceed $1.15 million per year per company.

Health care professionals, meanwhile, fret because inaccurate disclosures may cause them undeserved criticism and hurt their reputations with patients.

Risks of discrepancies between what companies say they gave health care providers and what those same providers believe they got are high. A recent Yale Medical School study compared voluntary disclosures of financial relationships on the websites of device makers Medtronic and DePuy with voluntary disclosures by members of a spine doctors association.

More than half of Fridley-based Medtronic’s published data did not match with what doctors reported, the study found. At DePuy, the discrepancy rate was 30 percent.

“It goes wrong in both directions,” said Dr. Jonathan Grauer, the Yale orthopedics professor who directed the study. “My concern is that people will look at it as trying to hide things. But it’s not. It’s largely a documentation issue.”

For example, Grauer said a company that makes spinal implants reported providing him a meal at a dinner that he knows he did not attend.

Pins and needles

Such confusion has companies and health care providers on edge. The government does not resolve disputes between industry and medical professionals, although the government has made available smartphone applications that allow doctors and companies to record and store payments and other “transfers of value” as they happen.

The Centers for Medicare and Medicaid Services (CMS) also allows members of the medical community to check data between the time companies submit it to the government and the time the government publishes it. During a 45-day window providers may dispute numbers and negotiate privately with companies to make changes. If the two sides fail to agree, however, the numbers submitted by industry go public with a notation that the amount remains contested.

Most health care providers are not aware of that, said Anita Griner, who manages Sunshine Act disclosures for CMS. “The fact that they disputed [data] does not inhibit it from being posted on the public website,” she explained.

That is because manufacturers, not doctors, guarantee the accuracy of data and face penalties if they violate the law.

However, CMS is “encouraging physicians to ask [companies] for pre-submission review and we are also encouraging manufacturers to offer pre-submission review so the data gets cleaned up even before we get it,” Griner said.

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