On November 18, 2009, the U.S. Senate released the latest healthcare reform bill, HR 3590.  Significantly, the bill includes a new version of federal Physician Payments Sunshine legislation that is stricter and more expansive than the version proposed earlier this year in the Senate.

The following are the some of the more significant aspects of the bill:

Covered Entities: applies to certain manufacturers and distributors of covered drugs, devices, biologics, or medical supplies

Covered Recipients: physicians and teaching hospitals (which is vastly more limited than the House version of the Sunshine provision).

Data Elements: the annual report will include the following data elements: recipient‘s name, business address, physician specialty, national provider identifier, amount of the payment, date of the payment, name of related drug, device or supply (if available), a description of the form of the payment, and nature of payment.

Delayed Reporting Requirements: contains delayed reporting requirements for payments made pursuant to a product research or development agreements, or clinical trials.

De Minimis Exemption and Aggregate Reporting Threshold: exempts from reporting any payments or transfers of less than $10, unless the aggregate amount during the calendar year exceeds $100 (subject to percentage increases).

Other Exemptions: product samples (although section 6004 of the bill includes the reporting of drug samples); educational materials that directly benefit patients or are intended for patient use; loan of a covered device for a short-term trial period; items or services provided under a contractual warranty; 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; discounts (including rebates); in-kind items used for charity care; a dividend or other profit distribution from, or ownership or investment interest in, a publicly traded security and mutual fund; payments under a self-insured plan; payments to a physician who is also a licensed, non-medical professional if the payment is solely related to non-medical services; payments to a physician solely for services related to a civil or criminal action or an administrative proceeding;

Reporting Deadline: reporting requirement would begin on March 31, 2013, and annually thereafter.

Disclosing Ownership or Investment Interests: requires any manufacturer, distributor, or related GPO, to report annually certain information regarding any ownership or investment interest (other than in a publicly traded security and mutual fund) held by a physician (or an immediate family member) in the manufacturer or GPO during the preceding year

Penalties: manufacturers or GPOs would be subject to a civil money penalty (CMP) of not less than $1,000 but not more than $10,000 for each payment or transfer not reported. The total amount of the penalties for any annual submission shall not exceed $150,000.  Any manufacturer or GPO that knowingly fails to submit information would be subject to a CMP of not less than $10,000 but not more than $100,000 for each payment or transfer not reported. The total amount of the penalties for this failure to report category of submissions shall not exceed $1,000,000 annually.

Public Availability: beginning September 30, 2013, submitted information would be available to the public on an internet website

Preemption: would preempt any state (or political subdivision of a state) law or regulation that requires manufacturers or distributors to disclose the type of information required under this provision regarding payments or transfers to covered recipients

No Preemption: would not preempt any state (or political subdivision of a state) law or regulation that requires the disclosure or reporting of (1) any information not required under this provision; (2) the types of information excluded from reporting requirements under this provision, with the exception of the $10 de minimis requirement; (3) information by any person or entity other than an applicable manufacturer, distributor or covered recipient described above; and (4) information reported to a Federal, state, or local government for public health purposes

Click here to download the latest Senate bill in its entirety (or scroll down to page 1542, section 6002, to view the "sunshine" provision).  R-Squared will be monitoring Sunshine Act developments closely and will post periodic updates and alerts to the website.

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