The Physician Payments Sunshine Act regulations came into effect on August 1. Part of the 2010 Patient Protection and Affordable Care Act (aka, "Obamacare"), the Sunshine Act requires the public reporting of any payments to physicians from pharmaceutical, biologic, medical device and medical supply manufacturers. With client companies now subject to the regulations, survey, opinion and marketing researchers are encountering additional scrutiny, bureaucracy and various requirements from their clients’ compliance departments.

MRA won an exclusion for research incentives for doctors in the law, with assistance from the Pharmaceutical Marketing Research Group (PMRG), for any "payment or transfer of value" if "made indirectly" to a doctor participating in a marketing research study where the pharmaceutical or medical device manufacturer "is unaware of the identity" of the doctor receiving the payment:

Section 6002 of the Affordable Care Act
SEC. 1128G (e)(10)(A)
: The term ‘payment or other transfer of value’ means a transfer of anything of value. Such term does not include a transfer of anything of value that is made indirectly to a covered recipient through a third party in connection with an activity or service in the case where the applicable manufacturer is unaware of the identity of the covered recipient.

The Centers for Medicare and Medicaid Services (CMS) released regulations implementing the Sunshine Act on February 1, further detailing that exclusion:

42 CFR § 403.904
(i) Exclusions from reporting...: (1) Indirect payments or other transfers of value (as defined in §403.902), where the applicable manufacturer is unaware of the identity of the covered recipient. An applicable manufacturer is unaware of the identity of a covered recipient if the applicable manufacturer does not know (as defined in §403.902) the identity of the covered recipient during the reporting year or by the end of the second quarter of the following reporting year.

42 CFR § 403.902 Definitions.
Indirect payments or other transfers of value
refer to payments or other transfers of value made by an applicable manufacturer (or an applicable group purchasing organization) to a covered recipient (or a physician owner or investor) through a third party, where the applicable manufacturer (or applicable group purchasing organization) requires, instructs, directs, or otherwise causes the third party to provide the payment or transfer of value, in whole or in part, to a covered recipient(s) (or a physician owner or investor).

Know, knowing, or knowingly--(1) Means that a person, with respect to information-- (i) Has actual knowledge of the information; (ii) Acts in deliberate ignorance of the truth or falsity of the information; or (iii) Acts in reckless disregard of the truth or falsity of the information; and (2) Requires no proof of a specific intent to defraud.

In the explanation of the new regulations, CMS tried to clarify a few things, even addressing marketing research:

We believe that by clarifying that applicable manufacturers must only report indirect payments or other transfers of value that they direct or instruct third parties to pay to covered recipients, we will address some of the commenters' concerns about the broader knowledge standard. Therefore, if a payment meets the definition of an indirect payment or other transfer of value in §403.902, then the payment can only be excluded from the reporting requirements if the applicable manufacturer did not "know" the identity of the covered recipient, as defined in §403.902. However, we want to clarify that, for purposes of this rule only, we will not consider an applicable manufacturer to be acting in deliberate ignorance or reckless disregard of a covered recipient's identity in situations when the reason a payment or other transfer of value is being made through a third party is that the identity of the covered recipient remains anonymous. For example, an applicable manufacturer may hire a market research firm to conduct a double-blinded market research study, which includes paying physicians $50 for responding to a set of questions. The applicable manufacturer clearly intends a portion of the payment to be provided to physicians, but given that the reason for the third party's involvement is specifically to maintain the anonymity of the respondents and sponsor, we do not intend this to be considered a reportable indirect payment or other transfer of value.

CMS used a similar approach in its own FAQs (#8992) on the resulting Open Payments system:

Is a payment or other transfer of value considered indirect if an applicable manufacturer utilizes a market research company’s services to conduct double-blinded market research with primary care physicians, which includes paying physicians for participating? 

No, a payment or other transfer of value provided to a market research company to conduct double-blinded market research with physicians is not considered an indirect payment.  The applicable manufacturer clearly intends a portion of the payment to be provided to physicians, but given that the reason for the third party’s involvement is specifically to maintain the anonymity of the respondents and sponsor, we do not intend this to be considered a reportable indirect payment or other transfer of value.  Additionally, under section 1128G(e)(10)(A) of the Social Security Act, Open Payments excludes reporting of payments when an applicable manufacturer is unaware of the covered recipient, and the payment to the covered recipient is made indirectly through a third party, such as the market research company, in the above facts.

It all seemed clear at first glance, but researchers and their clients have some questions. As always, MRA recommends that researchers consult with their own counsel about the application of any such law or regulation to your specific circumstances.

MRA MEMBERS ONLY: ANSWERS TO MARKETING RESEARCH’s FREQUENTLY ASKED QUESTIONS (FAQs) ON COMPLIANCE WITH THE PHYSICIAN PAYMENTS SUNSHINE ACT

 

This information is not intended and should not be construed as or substituted for legal advice. It is provided for informational purposes only. It is advisable to consult with private counsel on the precise scope and interpretation of any laws/regulation/legislation and their impact on your particular business.