AHLA. LL. Out in the Sunshine How to Protect Yourself

Transcription

1 AHLA LL. Out in the Sunshine How to Protect Yourself Jolee Hancock Bollinger General Counsel Franciscan Missionaries of Our Lady Health System Baton Rouge, LA Andrew D. Ruskin Morgan Lewis & Bockius LLP Washington, DC Physicians and Hospitals Law Institute February 5-7, 2014

2 overview Implications of the Sunshine Act for Hospitals: Manufacturer-Physician Relationships under the Microscope Physicians and Hospitals Law Institute February, 2014 Andrew Ruskin, Partner Morgan, Lewis & Bockius, Washington, DC Conflict of Interest Examples Prompting Legislative and Regulatory Action (2000) Jesse Gelsinger dies after receiving experimental gene therapy. Non-disclosure of a purported conflict of interest due to ownership by one of the clinical trial investigators in a biotech company. Lawsuit against numerous parties based in part on this nondisclosure, with claim that the omission was a fraudulent representation. The case settled out of court. (2007) Study published in NEJM shows that 94% of physicians have a financial relationship with manufacturers, e.g., gifts, compensation, etc. 2 1

3 Conflict of Interest Examples Prompting Legislative and Regulatory Action (cont.) ( ) Many stories of researchers failing to disclose outsized manufacturer payments they received to their employers, including employees of Stanford, Harvard, and Emory. (2011) Dr. Vishal James Makker is alleged to have performed repeated, unnecessary spine surgeries, while receiving over $500K per year from his physician-owned distributorship. Numerous settlements with drug and device manufacturers accused of violating the Anti Kickback Statute with purportedly excessive consulting fees for little to no work, CME trips to vacation spots, and other value adds. 3 Timeline of Major Legislative and Regulatory Developments Expansion of the Anti-Kickback Statute, originally enacted in Senator Grassley introduces the original version of the Sunshine Act, which was reintroduced in OIG begins to require disclosures as part of CIAs, totaling approximately 13 companies Affordable Care Act is passed, including Sunshine Act provisions. Aug., Revised PHS FCOI rules promulgated. Dec., CMS publishes Sunshine Act proposed rule. Feb., CMS publishes Sunshine Act final rule. 4 2

4 Sunshine Act Key concepts: Who does it apply to? What compensation disclosure requirements are there? How is research different? What ownership disclosure requirements are there? What is the disclosure process? What are the penalties? 5 Sunshine Act (cont.) Who will be interested in the information? Reporters. Competitors. OIG. Plaintiffs attorneys, including, possibly, relators counsel. Patient interest is likely to be tepid. 6 3

5 Sunshine Act (cont.) Potential consequences to hospitals: Bad press. Bad facts in a malpractice claim. OIG investigation. False Claims Act exposure. Loss of government research funding. Dissension among the medical staff. 7 Sunshine Act (cont.) Applicability. Reporting entities include applicable GPOs and applicable manufacturers. Applicable GPO means an entity that purchases, or arranges for the purchase of, a covered product, not solely for the GPO s own use. Applicable manufacturer means an entity that produces, prepares, propagates, compounds, or converts a covered product, unless solely for such entity s own use. 8 4

6 Sunshine Act (cont.) Applicability (cont.) Covered drug, device, biological, or medical supply is essentially any product that is either a prescribed drug or an FDA cleared or approved device. Also required to be reimbursed under Title XVIII or XIX. Covered recipients include physicians (except manufacturer employees) and teaching hospitals. Residents exempted, but fellow are not. There is a question as to whether a teaching hospital is defined by its TIN, irrespective of whether that includes the rest of the university. 9 Sunshine Act (cont.) Compensation disclosure. Applies only to applicable manufacturers, not GPOs. Includes direct and indirect transfers of value. Transfers of value need not relate to a specific product, except in certain limited circumstances. Manufacturers with less than 10% of their revenue attributable to covered products. Entities under common ownership that provide assistance or support in the sale of a product. A separate business line not independently manufacturing product. A contract manufacturer that does not hold FDA approval. 10 5

7 Sunshine Act (cont.) Compensation disclosure. (cont.) For each covered recipient, the following information is furnished: Name. Address. NPI, specialty, and State license number. Amount of transfer of value. Date of transfer. Form of payment. Nature of payment. 11 Sunshine Act (cont.) Compensation disclosure. (cont.) For each covered recipient, the following information is furnished (cont.): Covered product (if applicable). Eligibility for delayed publication (if research). Payment to third parties for covered recipient. Indication of whether recipient is an owner. (Optional) contextual information. 12 6

8 Sunshine Act (cont.) Compensation disclosure. (cont.) Acceptable form of payment identifiers: Cash or cash equivalent In-kind item or services Ownership interest Return on investment 13 Sunshine Act (cont.) Compensation disclosure. (cont.) Acceptable nature of payment identifiers: Consulting fee. Fee for other type of service. Honoraria. Gift. Entertainment. Food and beverage. Travel and lodging. Education. Research. 14 7

9 Sunshine Act (cont.) Compensation disclosure. (cont.) Acceptable nature of payment identifiers: (cont.) Charitable contribution. Royalty or license. Ownership interest. Compensation for speaking at a non-certified continuing education program. Compensation for speaking at a certified continued education program. Grant. Space rental or facility fees. 15 Sunshine Act (cont.) Compensation disclosure. (cont.) Special rules for continuing education and food and beverages apply. Research funding disclosure is distinct. Research payment disclosure can be postponed for up to 4 years. Any value not included as part of protocol will still be reported, but not as research. 16 8

10 Sunshine Act (cont.) Compensation disclosure. (cont.) Reporting exclusions: Indirect transfers of value where the applicable manufacturer is unaware of the identity of the covered recipient. Transfers of value of less than $10 (not to exceed $100 in the aggregate over a year). Product samples and coupons intended for patient use. Educational materials that directly benefit patients. The loan of a covered device for a short term trial period, not to exceed 90 days. Items or services under warranty. 17 Sunshine Act (cont.) Compensation disclosure. (cont.) Reporting exclusions: (cont.) Discounts. In-kind items used for charity care. Dividends on publicly traded stocks. Payments exclusively related to a legal or administrative proceeding. Transfers of value in the context of a personal relationship. Not excluded are payments for items purchased from teaching hospital. 18 9

11 Sunshine Act (cont.) Ownership disclosure. Disclosable ownership interests Reportable by both manufacturers and GPOs, and applies only to physicians and their family members. Includes: Physician name. Address. Specialty, NPI, and State license number. Dollar amount of investment. Current value and terms of ownership interest. Direct and indirect transfers of value to such physicians, or transfers of value made on behalf of such physicians 19 Sunshine Act (cont.) Reports follow a specific timeline. Reports are to be submitted by the 90th calendar day each year. Attestation required. Reporting entities may file a voluntary reasonable assumptions letter. CMS notifies covered recipients regarding the availability of the information for review. 45 day review period, plus an addition 15 days to resolve any disputes. OPEN PAYMENTS will make data publicly available September 30. Disputes not timely resolved result in CMS indication in the data that it is the subject of a dispute, and later corrections are included when data updated annually

12 Sunshine Act (cont.) Penalties. Failure to report (without scienter) results in fines of up to $10,000 per instance, with a cap of $150,000. Failure to report (with scienter) results in fines of up to $100,000 per instance, with a cap of $1,000, Public Health Service FCOI Regulations Reporting chain is investigator hospital Public Health Service. Investigators must disclose significant financial interests to their institutions, and update this disclosure within 30 days of any new significant financial interests

13 Public Health Service FCOI Regulations (cont.) Any financial interest that reasonably relates to the investigator s institutional responsibilities, irrespective of whether it relates to any PHS-funded research. Specifically included are: Receipt of value from any entity that exceeds $5000 in value. Ownership interest in a publicly traded entity of at least $5000, and in a privately held entity of any value. Value received from intellectual property rights. Excluded from disclosure are salary payments and certain other payments, such as payments for presenting at certain conferences. 23 PODs Typical structure: Physician-owned. Revenue derived from sales by POD to entities where physicianowners will perform services using goods sold by POD. Particular concern with implantable devices, which are often considered physician preference items chosen by physicians, rather than hospitals

14 PODs (cont.) Risk factors include: Selecting investors because of their ability to generate business. Requiring investors not using POD goods to divest their ownership interests. Distributing returns on investment disproportionate to the level of risk involved. Physician-owner referrals to hospital are contingent on POD purchases. Evidence that the PODs are sham businesses with no value additivity. 25 Out in the sunshine How to protect yourself Jolee Hancock Bollinger General Counsel 13

15 Franciscan Missionaries of Our Lady Health System 27 Media Reports Neurosurgeon Adam Lewis at his Jackson, MS office. The Clarion-Ledger 28 14

16 Widespread Relationships Discovered Reports on Employed Physicians Continued Focus on Physician Acquisitions Physician Preference Items Growth of Research Minimal Knowledge on Independent Physicians 29 Open Payments Reputation Risk Liability Risk Board/Executive Interests How to MITIGATE RISKS?

17 Steps Taken Discussed Issues in Terms of Best Patient Care Informal Meetings to Discuss Issues Identify Physician Champions Develop Conflict Policy Through Collaboration 31 Goals of Conflict Policy Overriding Goal of Best Patient Care Balanced Competing Interests Benefits resulting from physician knowledge and collaboration Financial incentives leading to treatment bias Mitigate risks Reputation risks Liability risks 32 16

18 Conflict of Interest Policy Topics Addressed Gifts Personal Donations of Equipment Monetary Donations Meals On-site Off-site Prescription Drug Samples Hospitals Clinics 33 Conflict of Interest Policy Topics Addressed Travel Paid By Industry Industry Representative Access Industry Sponsored Scholarships and Other Educational Funds Participation in Industry Sponsored Programs Industry Marketing Agreements/Contracts with Third Parties Honorarium from Continuing Education Events Research 34 17

19 Continuing Questions/Issues Employed vs. Non-Employed Physicians Implementation 35 How to Review Reports? Register with Open Payments Vendor Websites Work with manufacturers and GPOs to review information before it is sent to CMS Request review of data before reporting Provide opportunity to correct reported data Add statement describing context of payment 36 18

20 Education Physicians were advised to: Download App for Tracking Assistance Search Open Payments in App Store 37 Public Health Service FCOI Regulations (cont.) Each institution subject to the rule must have and enforce a financial conflict of interest policy that it uses to educate its physicians and makes available on its website. Institutions must designate an institutional official to review investigator disclosures. Institutions must determine whether any significant financial interest could directly and significantly affect the design, conduct, or reporting of the PHS funded research

21 Public Health Service FCOI Regulations (cont.) Institutions must manage any financial conflicts of interest, including through disclosure, monitoring, or divestiture. Website disclosures of significant financial interests, including their amount, must also be made. The amounts can be in ranges (e.g., $0-$4,999, $5,000 to $9,999, etc.). Institutions must provide reports to the Public Health Service, and they must certify compliance with every application for PHS funding. Failure to adhere to these requirements could lead to sanctions, including suspension of PHS funding. 39 Public Health Service FCOI Regulations (cont.) Other agencies FCOI policies to consider include: FDA NIH OHRP Voluntary guidelines from AAMC and others are also available

22 Clinical Trial Reimbursement Important billing compliance obligations are found in these policies. Failure to have complied with the applicable requirements means that the claims were not properly payable. Hospitals learning through Sunshine Act disclosure that members of their medical staff had been receiving research funding may trigger a need to determine if billing had been compliant. 41 Clinical Trial Reimbursement (cont.) Medicare Clinical Trial Policy Clinical trial requirements. Must involve the evaluation of an item or service that falls within a Medicare benefit category. Test must have a therapeutic intent. Must enroll patients with diagnosed disease rather than healthy volunteers if therapeutic intervention. Diagnostic tests can have a control group

23 Clinical Trial Reimbursement (cont.) Medicare Clinical Trial Policy (cont.) Must be good science, which is deemed to be true for: Trials funded by NIH, CDC, AHRQ, CMS, DOD, or VA. Includes trials supported by centers or groups funded by any of these agencies. Trials conducted under an IND reviewed by the FDA. Trials exempt from an IND. 43 Clinical Trial Reimbursement (cont.) Medicare Clinical Trial Policy (cont.) Exclusions from payment include: The investigational item itself. Data collection not directly related to clinical management. Items and services customarily provided by research sponsors free of charge to any enrollee in the trial

24 Clinical Trial Reimbursement (cont.) Medicare Clinical Trial Policy (cont.) Billing. Paid for consistent with existing systems (DRG, APC, etc.). Use condition code 30 for all claims. Use diagnosis code V70.7 for healthy control group individuals. Use diagnosis code V70.7 as secondary diagnosis for all patients receiving treatment. For services billed on a CMS 1500, use modifier Q1 next to services that are routine care furnished to individuals in qualifying trial and Q0 for investigational items. Medical record requirements also apply. 45 Clinical Trial Reimbursement (cont.) Investigation Device Policy. Coverage of Category A devices. Routine costs covered, but not the device itself, provided that: Involves the diagnosis, monitoring, or treatment of a life-threatening disease. Provider furnishes information regarding clinical trial to contractor. Meets yet undetermined scientific and ethical standards to be established by CMS. Must be medically necessary for given patient

25 Clinical Trial Reimbursement (cont.) Investigation Device Policy. (cont.) Otherwise Category A devices, and services that are incident to the device, such as preparatory services and after-care, are not covered. Coverage of Category B devices. Routine care is covered. Must be in an FDA-approved clinical trial. Must be medically necessary for given patient. 47 Clinical Trial Reimbursement (cont.) Investigation Device Policy. (cont.) Billing. Before billing, must submit to Medicare Contractor: A copy of the FDA-approval letter. Device name. Applicable IDE special controls implemented. A narrative description of the device. A statement indicating how the device is similar to and/or different from other comparable products. Indication of whether the device will be billed on an inpatient or outpatient claim. Summary of the study design or copy of trial protocol. Informed consent process

26 Clinical Trial Reimbursement (cont.) If the first time a hospital learns of a physician s use of an investigational item is after a Sunshine Act disclosure, then it is too late. 49 Precautionary Steps Disclosure Response policy Need a dispute resolution policy, including when will require medical staff to dispute Need reasonable assumptions letters Need to establish criteria for which discrepancies between physician disclosures and Sunshine Act reports will trigger further investigation Determine the parameters of all such investigations. Performed by Compliance? Legal? What due process is given the physician? Range of consequences? Need to be able to explain to public why PHS and Sunshine Act are different 50 25

27 Precautionary Steps (cont.) Research policy Need to be clear about how clinical trial dollars will be treated by sponsor Vendor Procurement policy Ensure that hospital s policy with respect to procurement of physician preference items is insulated from conflicts of interest Be conservative in terms of deciding which vendors will be subject to policy Consider Sunshine Act issues when deciding whether to start taking GME payments 51 26