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ObamaCare remains on the March: what may be a ray of sunshine for patients likely will burden a number of small companies with additional compliance rules and paperwork to the point of bankruptcy.

AMID ALL OF THE talk about health care reform, an interesting law that goes into effect in 2013 largely has gone unnoticed. It is called the Physician Payments Sunshine Act (PPSA), and was passed in March 2010 as part of the Patient Protection and Affordable Care Act, frequently referred to as ObamaCare. PPSA was designed to bring transparency to the financial relationships existing in the medical profession, and was introduced by Sens. Herbert H. Kohl (D.-Wis.) and Charles E. Grassley (R-Iowa). PPSA requires all manufacturers of drugs, biologicals, and medical devices to disclose on an online database payments to physicians and teaching hospitals amounting to more than $100 per year.

Companies also must disclose payments of cash and cash equivalents, stock, stock options, dividends, profits, or other returns on investments. They do not have to report educational materials for patient use and benefits, or product samples intended to be free for patients.

Physicians are to be listed on the database by name, business address, specialty, and their National Provider Identifier Number. PPSA provides for penalties for the companies for noncompliance: a minimum payment of $1,000 per violation, with the total capped at $125,000 per year, and a minimum penalty of $10,000 per violation for the willful failure to submit this information, with the total capped at $1,000,000 per year. As of Oct. 1, 2011, the Secretary of Health and Human Services has been required to establish procedures for the submission of the required information. This information is to be released to the public on March 31, 2013.

PPSA refrains from banning these payments, but requires that they be disclosed. It reflects the belief that, as the late Supreme Court Justice Louis D. Brandeis stated, "Sunshine is the best disinfectant." A random study of this physician-industry relationship was published in The Archives of Internal Medicine in 2010, and it indicated that 83.8% of all respondent physicians had some type of relationship with industry. The study involved primary care physicians (internal medicine, family practice, and pediatrics) and specialists (cardiology, general psychiatry, and anesthesiology). The types of payments and gifts most physicians routinely receive include the following: consulting and research fees, informing other doctors about the company's products; serving as the company spokesperson for these products; sitting on physician advisory boards; money for continuing medical education courses; and lunches, dinners, trips, entertainment tickets, office trinkets with company logos, and limousine service to and from various events.

Although these gifts or payments are not inherently dishonest, they raise questions about potential conflicts of interest. Numerous studies have pointed out that researchers taking in funding from medical companies are far more likely to report favorable results than researchers who get no such funding, and that physicians often have a financial reason (as opposed to a medical one) for recommending one product over a less expensive alternative. In compelling companies to disclose these payments and gifts to physicians, PPSA seeks to subject the medical profession to public scrutiny.

This physician-industry relationship is a relatively new development. Until the 1980s, the American Medical Association adhered to the view that physicians should limit the source of their professional income to medical services rendered to patients. Its position would be modified to coincide with the new business-oriented approach to modern medicine. This shift was made possible by the phenomenal scientific developments that have taken place.

However, physicians--whether general practitioners or specialists--found it difficult to keep up with the research. In The Gold Standard, the authors note that there are 20,000 medical journals publishing 2,000,000 articles a year and reporting on more than 250,000 controlled trials. In one five-year period, for instance, there were 14,000 articles published on the use of one type of medication for hypertension.

Another problem was that the quest for these innovations led to an expenditure of an enormous amount of money as companies sought to maximize their profits. One effective way to achieve this goal is to establish contact with physicians, inform them about innovations in the field, and present their products in the most favorable light. The fact that the AMA was cognizant of these changes as far as drug companies were concerned was apparent a decade ago, when it announced it would sell its information technology services about physicians to data mining companies (also referred to as health services companies), which pair this information with prescribing records purchased from pharmacies, and sell it to pharmaceutical companies to enable them to market their products more effectively to physicians.

The passage of PPSA represents a concerted effort by various groups and organizations to shed light on the physician-industry relationship. Among the participants were state legislatures, two Senate investigating committees, newspaper reporters, academic researchers, public service organizations, and the medical profession itself.

As has happened before, it was the states--rather than the Federal government--that took the initiative in addressing the issue. In 1993, Minnesota became the first state to require disclosure of payments to doctors for medical conferences, honoraria, compensation for research, etc. totaling $100 per year. Disclosure laws subsequently were passed in Vermont (2001), Maine (2003), the District of Columbia (2003), West Virginia (2004), and Massachusetts (2008).

These vary in effectiveness and compliance, with Vermont initially providing the strongest enforcement. Vermont's disclosure information also was accessible to the public on an online database. A 2010 Health Services Research about the disclosure law in Vermont found that payments were monopolized by a few major drug companies, and approximately two percent of the state's prescribers received 69% of the gifts and payments. The largest payments were made to physicians specializing in psychiatry, endocrinology/diabetes/metabolism, internal medicine, and neurology.

In 2010, Massachusetts--its list included payments by medical device companies--published its findings online, and supplanted Vermont as the state with the most comprehensive database in the country. Its database showed that 5,048 physicians, or approximately 12% of the state's doctors, received payments.

It was the PPSA sponsors, Kohl (chair of the Special Committee on Aging) and Grassley (the ranking member of the Senate Finance Committee), who took the leadership in Congress in investigating conflicts of interest between physicians and industry. In 2007, Kohl presided over a heating by the Special Committee examining the relationship between physicians and the pharmaceutical industry. That same year, Grassley's committee began an ongoing investigation into the issue of taxpayer-funded research and undisclosed and unmonitored conflicts of interest involving universities and pharmaceutical companies. It uncovered evidence that academic researchers were accepting funding from the National Institutes of Health and various drug makers while failing to disclose their financial ties to the NIH and universities.

One of the committee's investigations focused on 10 psychiatrists, including a prominent child psychiatrist, and two department chairs from leading medical schools. They were highly regarded in the profession, and were known as key opinion leaders, a term used to identify physicians who influence their peers' medical practices, including the prescription of medication, the use of medical devices, and the designation of diagnostic tests. The child psychiatrist failed to disclose the fact (until prodded by the Grassley committee to do so) that he received $1,600,000 in drug company payments. In 2008, his university began a three-year investigation into the matter, during which time he was placed on leave. At its conclusion, he received minor sanctions and was reinstated.

In another investigation, the Grassley committee found that there was a discrepancy of $70,000 in what a department chair said he had earned from drug companies and what he had reported to his university. He also had a grant from the NIH to oversee research on a drug, in spite of the fact that he owned $1,600,000 worth of stock in the company developing the drug. His university steadfastly defended him when he was criticized by the committee, and he remained as department chair.

The other department chair received $2,800,-000 in consulting fees from pharmaceutical companies at the same time he held a grant from these companies to evaluate several of their drugs. He also violated the terms of an NIH grant, which required researchers to report payments of more than $10,000. In his case, he voluntarily stepped down as department chair in 2008. The following year, he was appointed to a similar position at another medical school.

The press also did its part in calling attention to the failure of physicians to disclose conflicts of interest. These stories appeared in national, as well as regional, newspapers and featured the reporting of both well-known and unknown reporters. One story that attracted considerable attention concerned a radiologist at a noted teaching hospital. She was the lead author of a study that appeared in the New England Journal of Medicine in 2006.

The study concluded that lung cancer deaths could be reduced by as much as 80% in a group of high-risk patients by using a new chest imaging technique. At the end of the article was a long list of institutions funding the study, including a little known charity called the "Foundation for Lung Cancer. Early Detection, Prevention & Treatment." Eighteen months after the article had appeared, a newspaper broke the story that the Foundation was underwritten almost entirely by $3,600,000 in grants it received from a tobacco company. The radiologist also held patents related to the new screening technology and received royalties from a company that made some of the screening devices.

The New England Journal of Medicine published a correction as to her incomplete disclosures, as did several medical journals that also had published her work. In regard to her research, a huge Federal study, published in November 2010, did not entirely discredit her findings insofar as it found that scans did reduce the risk of lung cancer in these high-risk patients. However, the decrease was by 20%, as opposed to 80%.

It not only is newspapers that have published stories about the failure of physicians to make complete disclosures to medical journals. In the last decade, medical journals have carried many articles critical of the physician-industry relationship. To cite one example, three academic researchers published an article in the Archives of Internal Medicine in 2010; it followed the disclosing practices of 40 orthopedic surgeons who had received $1,000,000 or more in consulting fees from medical device companies in 2007. The following year, these surgeons published 95 articles related to the companies, including studies and analyses designed to influence patient care and treatment. The authors found that fewer than half of them disclosed their financial ties to medical device companies in these articles.

Championing disclosure

Various public service organizations, including Public Citizen and ProPublica, have championed the importance of disclosure laws. In 2007, the deputy director of the Health Research Group at Public Citizen testified before Kohl's Special Committee on Aging, and called for the kind of legislation that was enacted when PPSA was passed three years later.

In September 2010, the online investigative news organization ProPublica gave a preview of the kind of information that would become available when PPSA goes into effect in 2013. ProPublica compiled payments made by seven drug companies during 2009 and the first half of 2010, and put them on an online database called "Dollars for Docs." These disclosures amounted to $258,030,000, paid to more than 17,700 physicians and other health care providers.

It updated its study in September 2011, based on reports from 12 firms that comprise more than 40% of drug company sales in this country. The new data led to the addition of hundreds of thousands of names to the database. This time, payment to doctors and other health care providers totaled more than $760,000,000 during the period between 2009 and the second quarter of 2011.

In both instances, the information is on a single database, but there is a state-by-state breakdown. Since one of the drug companies has separate listings for the same doctor (as in "Joseph D. Smith" and "Joe Smith") it is more accurate to search for a particular state in order to find out the full amount of payments made to a physician. There will be no such confusion when the PPSA database is made public because all physicians will be identified by their Provider Identifier Numbers.

It would have been difficult for the medical profession to have remained silent in the face of the growing amount of criticism levied against it. As early as 1980, an article written by a physician appeared in the New England Journal of Medicine calling attention to the "new medical-industrial complex." The author expressed concern that there would be an eroding of medical ethics in this commercialized health care market.

In a 2006 article in the Journal of the American Medical Association, a task force consisting of a group of medical personnel called for restrictions on the relationship between academic physicians and industry, including a ban on talks for drug companies. Although the authors acknowledged the importance of industry collaboration in the development of new drugs and medical devices, they expressed concern that academic medical centers were losing their ethical compasses. Shortly thereafter, the Association of American Medical Colleges, other professional medical organizations, and various major universities revised their conflict of interest codes.

In 2009, JAMA issued a Special Communication coauthored by several outspoken anti-industry critics, calling for all professional medical associations to work for a complete ban on industry contributions to medical societies. While the implementation of these goals was not always successful, PPSA did have the backing of virtually all major medical organizations at the time of its enactment.

PPSA is not without its critics. Many of the companies affected by the regulations regard them as a burden, and fear they will face an accounting nightmare in trying to comply with the new legislation. Indeed, a number of small companies may be driven out of business. Another criticism is that it would stigmatize certain physicians receiving substantial amounts of money, by casting aspersions on a physician-industry relationship that has led to many of the major advances in the field of medicine and has resulted in vast improvements in the care of patients. To other critics, it simply is another example of the Federal government meddling into an area where it does not belong.

When PPSA goes into effect, there is a good possibility that little will change with regard to the physician-industry relationship, except that payments to physicians will be made public. Yet, it promises to be a substantial benefit to those patients who take the time to look at the database. This database will enable people to see if there appears to be a conflict of interest regarding the medial treatment that has been suggested.

If in doubt, patients can speak to their physicians about the matter, and there always is the option of seeking a second opinion.

Diana Klebanow is an adjunct professor of political science at Long Island University, Brooklyn, N.Y., and coauthor of People's Lawyers: Crusaders for Justice in American History.


Please note: Some tables or figures were omitted from this article.
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Title Annotation:Physician Payments Sunshine Act; Political Landscape
Author:Klebanow, Diana
Publication:USA Today (Magazine)
Geographic Code:1USA
Date:Jan 1, 2012
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