Hidden in the Patient Protection and Affordable Care Act (P.L. 111-148) as amended by the Health Care and Education Reconciliation Act of 2010 (together, the “Act”) are provisions regarding requirements to disclose financial relationships that healthcare providers have with pharmaceutical, medical device, biological and medical supply manufacturers and group purchasing organizations.
Beginning on March 31, 2013 and each year thereafter, manufacturers of certain drugs, medical devices, biologicals and medical supplies and group purchasing organizations that provide payments or anything of value to certain providers must submit information regarding such provider to the Secretary of Health and Human Services. Manufacturers are defined to include any entity which is engaged in the production, preparation, propagation, compounding, or conversion of a covered drug, device, biological, or medical supply (or any entity under common ownership with such entity which provides assistance or support to such entity with respect to the production, preparation, propagation, compounding, conversion, marketing, promotion, sale, or distribution of a covered drug, device, biological, or medical supply. The disclosure requirements apply to any group purchasing organization that purchases, arranges for, or negotiates the purchase of a covered drug, device, biological, or medical supply which is operating in the United States, or in a territory, possession, or commonwealth of the United States.
The information required to be submitted includes the name and business address of the recipient, the National Provider Number of any physician recipient, the value of the payment or other item transferred, the date on which the payment or item was transferred, a description of the form of payment or item transferred, and the nature of the payment or item. If applicable, the name of the drug, device, biological or medical supply, which the payment or other transfer is related. Manufacturers and group purchasing organizations that have physician investors must report the amount invested by each physician, the value and terms of the interest, and all information required with respect to general payments.
Certain exclusions to the reporting requirement apply:
(i) A transfer of anything the value of which is less than $10, unless the aggregate amount transferred to, requested by, or designated on behalf of the covered recipient by the applicable manufacturer during the calendar year exceeds $100.
(ii) Product samples that are not intended to be sold and are intended for patient use.
(iii) Educational materials that directly benefit patients or are intended for patient use.
(iv) The loan of a covered device for a short-term trial period, not to exceed 90 days, to permit evaluation of the covered device by the covered recipient.
(v) Items or services provided under a contractual warranty, including the replacement of a covered device, where the terms of the warranty are set forth in the purchase or lease agreement for the covered device.
(vi) A transfer of anything of value to a covered recipient when the covered recipient is a patient and not acting in the professional capacity of a covered recipient.
(vii) Discounts (including rebates).
(viii) In-kind items used for the provision of charity care.
(ix) A dividend or other profit distribution from, or ownership or investment interest in, a publicly traded security and mutual fund.
(x) In the case of an applicable manufacturer who offers a self-insured plan, payments for the provision of healthcare to employees under the plan.
(xi) In the case of a provider who is a licensed non-medical professional, a transfer of anything of value to the covered recipient if the transfer is payment solely for the non-medical professional services of such licensed non-medical professional.
(xii) In the case of a provider who is a physician, a transfer of anything of value to the covered recipient if the transfer is payment solely for the services of the covered recipient with respect to a civil or criminal action or an administrative proceeding
Manufacturers or group purchasing organizations who fail to report in a timely manner are subject to a civil monetary penalty of not less than $1,000, but not more than $10,000, for each payment or other transfer of value or ownership or investment interest not reported, and if such failure is a “knowing” failure, manufacturers are subject to a civil money penalty of not less than $10,000, but not more than $100,000, for each payment or other transfer of value or ownership or investment interest not reported.
Brynne Goncher is an associate in the firm’s Healthcare Practice. Ms. Goncher concentrates in representing healthcare providers in various business and regulatory matters. Ms. Goncher received her bachelor’s degree from the University of Pennsylvania and both her law degree and master of public health administration from Emory University.