On March 24, 2011, the Centers for Medicare & Medicaid Services ("CMS") held a teleconference,[1] titled "Transparency Reports and Reporting of Physician Ownership or Investment Interests."[2] During the teleconference, CMS provided interested parties with the opportunity to publicly comment on certain topics related to the implementation of Section 6002 of the Patient Protection and Affordable Care Act ("PPACA"). These topics included (1) additional forms and natures of payments and transfers of value to be considered by CMS for reporting; (2) accessibility to, and usability of, the reported data for consumers; and (3) mechanisms for accurate, efficient, and cost-effective reporting of data. CMS announced that "draft regulations" will be issued later this year and that interested parties would have the opportunity to also comment on these draft regulations. See "Federal Transparency Is Now a Reality: Challenges and Opportunities for Pharma, Devices, and PBMs" for an overview of Section 6002 of PPACA.

CMS stated during the teleconference that the teleconference was intended to be the first of several opportunities to provide comments to CMS in a public format. Interested parties may submit written comments to physiciansunshine@cms.hhs.gov until April 7, 2011. This alert provides a summary of the questions presented by CMS during the teleconference and highlights key areas for potential written comment.

I. Forms of Payments and Transfer of Value

The statutory language of Section 6002 of PPACA provides "cash or a cash equivalent," "in-kind items or services," "stock, a stock option, or any other ownership interest, dividend, profit or other return on investment" as the forms of payments and transfers of value that are reportable by manufacturers. CMS inquired during the teleconference whether additional forms of payments or transfers of value should be considered and, if so, what additional forms should be included. Teleconference participants who responded to the question orally generally stated that the forms of payments and transfers of value should not be expanded by CMS. Rather, CMS should focus on providing clear guidance in the regulations related to the existing categories set forth in PPACA.

Interested parties should consider submitting comments to CMS that support comments made by teleconference participants regarding scope and CMS direction. Areas that may be ripe for comment include certain de minimis items that are difficult to track, including promotional materials and certain items provided at conference booths.

II. Nature of Payments and Transfer of Value

Section 6002 of PPACA provides that "consulting fees, compensation for services other than consulting, honoraria, gift[s], entertainment, food, travel (including the specified destination), education, research, charitable contributions, royalty or license, current or prospective ownership or investment interest, direct compensation for serving as faculty or as a speaker for a medical education program, [and] grants" as natures of payments and transfers of value that are reportable. CMS inquired of teleconference participants whether additional natures of payment or transfers should be considered and, if so, what additional categories should be considered and the additive value of these items. CMS further inquired how "narrowly or broadly" CMS should define the nature of payments and other transfers of value listed in the legislation. Teleconference participants who responded during the call generally stated that CMS should not consider additional areas for reportable natures of payments or transfers of value. Rather, teleconference participants provided examples of terms that CMS should define clearly and narrowly, such as payments related to research, consulting services, and education.

Interested parties should consider submitting comments to CMS that support comments made by teleconference participants. Additionally, interested parties should consider providing comments to CMS related to the need for clear definitions for the various categories provided in Section 6002 of PPACA. For example, what is the difference between a "consulting fee," "honoraria," and "direct compensation"? Comments should emphasize that clear definitions will facilitate consistent reporting across manufacturers.

III. Additional Categories of Reportable Information

Section 6002 of PPACA provides for a number of categories of information that are reportable, and also provides that the Secretary of Health and Human Services ("Secretary") may include additional categories. In this regard, CMS asked teleconference participants whether additional categories of information regarding the payments or other transfers of value reported by manufacturers should be considered and, if so, what categories should be included. CMS also requested comments from teleconference participants regarding the additive value of these additional categories of information. Generally, teleconference participants who provided comments discouraged CMS from considering additional categories and, instead, encouraged CMS to consider aggregating certain categories. For example, the wide variety of payments that may be made in connection with research should be aggregated into one research category.

Interested parties should consider submitting comments to CMS that support comments made by teleconference participants. Additionally, interested parties should consider submitting comments to CMS related to challenges associated with capturing downstream payments, such as payments made in connection with research and educational grants.

IV. Ownership or Investment Interests

Section 6002 of PPACA requires manufacturers to report certain information related to "any ownership or investment interests . . . held by a physician (or an immediate family member of such physician" in the manufacturer. CMS asked teleconference participants whether additional information regarding these interests should be required and, if so, what additional information should be considered. Teleconference participants who responded generally stated that CMS should consider the original language and intent behind this provision.

Interested parties should consider submitting comments to CMS regarding the need for clear definitions related to "ownership" and "investment interests" to ensure accurate and consistent reporting by manufacturers.

V. Information Made Available to the Average Consumer

Section 6002 of PPACA requires the Secretary to make the information reported annually by manufacturers available on a public website. CMS inquired of teleconference participants what type of background information should be provided to the public regarding the relationships between industry and health care professionals. CMS also inquired about best practices for the presentation of the data to maximize its use and ensure that it is understandable to consumers. Teleconference participants who responded generally agreed that any information provided to the public should be clearly defined and well explained. For example, teleconference participants stated that the information should not lead the public to believe that every payment or relationship between industry and health care professionals is problematic. These teleconference participants further suggested that CMS consult with focus groups and industry experts to ensure that the information is not misleading.

Interested parties should consider submitting comments to CMS related to best practices for making this information available to the public.

VI. Data Reporting

CMS inquired about approaches and mechanisms that it should consider to ensure the accurate, efficient, and cost-effective reporting of data. Specifically, in what electronic format should submissions be made? Teleconference participants who responded generally indicated that CMS should consider the use of a standardized spreadsheet, which is generally acceptable, searchable, and downloadable.

Interested parties should consider submitting comments to CMS related to electronic formats, or characteristics of such, used for state law reporting that have provided better success for complete and accurate reporting. Additionally, interested parties should provide comments to CMS related to identifiers for physicians and teaching hospitals that would facilitate the accurate and efficient tracking and reporting of data. It also would be helpful if CMS clearly identified which institutions will constitute "teaching hospitals" for purposes of the statute.

VII. Review and Correction Process

Section 6002 of PPACA provides manufacturers and health care professionals with an opportunity to submit to the Secretary corrections to the information reported by manufacturers. CMS inquired about best practices for this process. Teleconference participants who responded generally supported a review process.

Interested parties should consider submitting comments to CMS related to the process for this review. Specifically, interested parties should consider providing comments related to the challenges that may arise in connection with this review process. For example, it is unclear how the Secretary will address a situation in which the information provided by the covered recipient differs from that of the manufacturer.