Regulatory Focus™ > News Articles > Sunshine Act Clears CMS Review, But Final Promulgation Could be Months Off

Sunshine Act Clears CMS Review, But Final Promulgation Could be Months Off

Posted 29 November 2012 | By

Signs are emerging that a long-awaited landmark regulation governing the transparency of gifts given to medical practitioners by industry has entered its last clearance stage before final promulgation.

The rule, Transparency Reports and Reporting of Physician Ownership of Investment Interests, is the direct result of the Patient Protection and Affordable Care Act(PPACA)-colloquially known as Obamacare-the seventh title of which contains the "Physicians Payment Sunshine Act."

The Sunshine Act, the brainchild of Sens. Charles Grassley (R-IA) and Herb Kohl (D-WI), is intended to make transparent all transfers of "value" to medical professionals to help curb both actual and perceived conflicts of interest.

The overriding theory of the Sunshine Act is that some doctors are more likely to prescribe products if they have received financial gifts from a particular company regardless of patient benefit, and by making these transactions transparent those doctors would stop passing those costs on to unknowing consumers or government payors.

The Act set statutory deadlines for implementation of rules related to it, but the deadlines for those rules have since come and gone. In late October 2011, Grassley went to the press, lambasting the Centers for Medicaid and Medicare Services (CMS) for blowing its October 2011 deadline for the release of draft guidelines on the rule.

The final rule is supposed to be issued on 1 January 2013-a month from now-with manufacturers to begin reporting gift data to CMS shortly thereafter. While some observers, such as Grassley, have continued to question CMS regarding its progress on the act, new information shows it has neared its final promulgation state.

All regulations and guidance are required by law to clear the Executive branch's Office of Information and Regulatory Affairs (OIRA), a sub-office of the Office of Management and Budget (OMB). There, the regulations are scrutinized for their economic impacts and to determine whether they are inefficient.

For the Sunshine Act regulation, that process started on 27 November 2012. At this point it would seem unlikely that OIRA would be able to analyze the regulation in the next month in time for its 1 January 2013 intended date. Several other pieces of FDA regulations have recently been stalled at the office, sometimes for more than a year, without explanation. An amendment to FDA's Performance Standard for Laser Products, for instance, has been under OIRA review since November 2011 despite only being at the proposed rule stage.

Continued delays could earn legislators', including Grassley's, ire. "The longer we wait, the more taxpayers miss out on the benefits of public disclosure," Grassley said in a September 2012 speech.

Still, even Grassley has speculated on the pace of OMB's review of the Sunshine act. "I am never one to put a lot of stock into rumors, but one that keeps popping up is that CMS has completed the final rule and sent it over to OMB - but OMB will not issue the final regulation until after the election."

Perhaps, then, approval isn't very far away at all.

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