The Sunshine Act—What it Means to Dentists
Healthcare product and device manufacturers will now be required to publicly disclose “transfers of value”—eg, gifts, meals, consulting fees. How will this impact you?
A recent Dental Trade Alliance (DTA)-sponsored webinar provided information on Section 6002 of the Patient Protection and Affordable Care Act (PPACA), that is, the Physician Payment Sunshine Act. The Sunshine Act requires US manufacturers of drugs, biological products, medical supplies, and medical devices covered under Medicare, Medicaid, or SCHIP to annually report “transfers of value” (TOV), which includes gifts, meals, and travel, as well as financial compensation, to “covered physicians”—including dentists—or teaching hospitals to the Secretary of the Department of Health and Human Services. By September 30, 2013, and on June 30 of each calendar year beginning thereafter, the Secretary will make the reported information available through a searchable website.
Reported information will include the name and business address of the covered recipient and, in the case of a physician (or dentist), the doctor’s specialty and National Provider Identifier; the date and amount of each payment; a description of the form of payment; the nature of payment; and whether the payment or other transfer of value is related to marketing, education, or research specific to a covered drug, device, biological or medical supply, and the name of that item.
What it Means to Dentists
While the burden of compliance—complete with quarterly reports and stiff penalties for failure to report properly—will fall on the manufacturers of the drugs and devices on which clinicians depend, busy practitioners may find that their lives too will be changed by the Sunshine Act.
While the Sunshine Act does not prohibit payments to physicians and teaching hospitals, its purpose is to provide greater transparency in their relationship to life sciences companies, and, implicitly, to act as a deterrent to questionable conduct and conflicts of interest.
As potential recipients of TOVs such as meals, travel, and gifts, dentists might want to re-examine some longstanding business relationship traditions, and keep track of even the most innocent of “perks.”
For example, due to one of the 13 exemptions, there’s no need to report a TOV of under $10 per doctor in a practice unless the total exceeds $100 in a calendar year. So, if a sales rep brings in $49 worth of breakfast to a five-dentist practice—which comes to less than $10 per dentist—it will not be reported. However, it does need to be tracked over the course of a year because if the TOVs given by a covered company to a covered doctor total $100 or more per doctor in the practice, it will be reported by the company, and a 1099, which the practice must report as taxable income, will be generated.
In short, dentists should be aware that all TOVs—large and small—from applicable manufacturers must be for legitimate services and be consistent with the fair market value of such services. For their own protection, they should think twice before they accept anything of value that might not stand up to public scrutiny, make sure they actually provided the services for which they were paid, and ensure that the publicly disclosed information matches the IRS Form 1099 that reports the value of the items or services doctors receive.
The complete details of the act and its numerous exceptions—including those that pertaining to individual and cumulative TOV—can be found at www.healthcare.gov/law/full/.
The Dental Trade Association
Representing Support of Oral Healthcare
The Dental Trade Alliance (DTA) is a trade association representing dental distributors, manufacturers, and laboratories in North America. The DTA has more than 220 members, 140 of which are dental manufacturers. Its members represent the majority of the dental market; most of the manufacturing members are small businesses.
Among the many ways DTA serves industry are lobbying to combat the 2% excise tax on Class II medical device manufacturers in the Affordable Care Act and focusing on issues relating to the dental industry.
In keeping with its stated mission to be “mindful of our moral obligation to improve access to oral healthcare and to grow the professional community,” the DTA Foundation has funded numerous innovative programs, including its 2009 introduction of “Oral Healthcare Can’t Wait,” a public awareness campaign intended to foster awareness of the oral–systemic link and to encourage more people to visit their dentist.
Most recently, DTA assembled The Partnership for Healthy Mouths, Healthy Lives, a coalition of more than 35 leading dental health organizations, to secure funding from the Ad Council for a multi-million-dollar public awareness campaign. In time for back-to-school season, the Ad Council and The Partnership debuted the “Kids’ Healthy Mouths” advertising campaign, the first joint national multimedia public service campaign designed to teach parents, caregivers, and children about the importance of oral health and the simple ways in which they can help prevent oral disease, and particularly stresses the importance of brushing for 2 minutes twice a day. The English and Spanish-language public service ads were distributed to media outlets nationwide in late August.