Health Care Reform Part II: Health Care Reform: Disclosure of Items Received by Physicians

Special by Elizabeth E. Hogue, Esq.

The Centers for Medicare and Medicaid Services (CMS) issued a proposed rule on December 27, 2011, that implements Section 6002 of the Affordable Care Act (ACA). This proposed rule requires manufacturers of drugs, devices, and biological and medical supplies covered by Medicare, Medicaid, or the Children’s Health Insurance Program (CHIP) to report annually to the Secretary of the U.S. Department of Health and Human Services (HHS) payments or transfers of value provided to physicians and teaching hospitals. Information must be reported in an electronic format by March 3, 2013, and on the 90th day of each calendar year thereafter. The Secretary is required to publish information received from manufacturers on a public website. The goal of this requirement is to provide greater transparency regarding payments and items given to physicians.

Manufacturers are required to report:

  • Cash or cash equivalents;
  • In-kind items or services;
  • Stock, stock options, or any other ownership interests, dividends, profits, or other return on investment; and
  • Any other form of payment determined by the Secretary.

Specifically, manufacturers may be required to report:

  • Consulting fees;
  • Compensation for services other than consulting;
  • Honoraria;
  • Gifts;
  • Entertainment;
  • Food;
  • Travel, including the specific destination;
  • Education;
  • Research;
  • Charitable contributions;
  • Royalties and licenses;
  • Current or prospective ownership or investment interests;
  • Direct compensation for serving as faculty or as a speaker for medical education programs;
  • Grants; and
  • Any other payments or transfers of value as defined by the Secretary.

If the regulations are finalized, manufacturers must report anything given to physicians exceeding $10.00 in value. If the aggregate value of items under $10.00 exceeds $100.00 in any calendar year, however, then these items valued at less than $10.00 must also be reported.

Like the Stark law and regulations, the value of items, such as food, provided to a group practice will be attributed equally to each member of the group. If, for example, there are four physicians in the group and lunch is provided that costs $100.00, then $25.00 of the cost of lunch will be attributed to each physician, whether or not the physician actually ate any of the lunch.

There are some exceptions to the requirements to report, including such things as product samples, education materials for patient use, in-kind items used for the provision of charity care, and stock dividends of publicly traded companies.

Why are these requirements important to post-acute providers?

Providers have observed that the “bar” for giving items to referral sources seems to be set by manufacturers, especially drug companies. To the extent that reporting and the resulting transparency on a public website puts a damper on the practices of manufacturers, the “bar” for items of value is likely to change for all referral sources, including wound care practitioners. Practitioners may ultimately be subject to similar requirements.

The climate with regard to items of value given to referral sources is undergoing rapid change. Manufacturers who provide such items and recipients must adjust to this new climate.

This material is provided to HCAF by Elizabeth E. Hogue, Esq. Contact by phone at (877) 871-4062, fax at (877) 871-9739 or email at

© 2010 Elizabeth E. Hogue, Esq. All rights reserved. No portion of these materials may be reproduced in any form without the advance written permission of the author.

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