regulation — VOICES for REASONVOICES for REASON

A while back, I wrote about the Physician Payments Sunshine Act, a small part of Obamacare that may nonetheless have a large impact. Essentially, the law requires companies in the medical field to report in detail on every item of value they convey to doctors.

What’s the alleged justification for this new reporting burden? Basically this: Since some doctors might allow conflicts of interest to undermine patient care, every doctor’s financial transactions with industry have to be scrutinized in minute detail.

If you want a taste of what the new law will require in practice, check out this article on the “Top 50 Things to Know” about the law. Here’s a sample, elaborating on the basic reporting requirement for meals supplied to doctors (boldface and underlining are from the “Top 50″ article):

5. The per person value of the meal must be reported as a payment or other transfer of value only for covered recipients who actually partook in the food or beverage.  Applicable manufacturers are not required to report or track buffet meals, snacks, soft drinks, or coffee made generally available to all participants of a conference or similar events where it is difficult to identify the identity of those who partook in the offering.

The premise there is that you can trust your doctor to cut your chest open and remove a tumor from your lung, but you can’t trust him to be objective about prescribing drugs made by the manufacturer that offers him a free Coca-Cola.

Now, here’s an item that elaborates on the requirement that each valuable item be linked up with some product of the company that’s providing the item:

46. If a “payment or other transfer of value is not related to at least one covered product, then applicable manufacturers should report “none.”  Conversely, “if the payment or other transfer of value is related to a specific product, which is not a covered product, then applicable manufacturers are to report “non-covered product.”  Finally, if the payment or other transfer of value is related to at least one covered product, as well as at least one non-covered product, then applicable manufacturers must report the covered products by name (as required), and may include non-covered products in one of the fields for reporting associated product.”

Confused? Just think about the number of man-hours that will be diverted away from medical research and into the task of figuring these regulations out.

Finally, put yourself in the position of a pharmaceutical company that has made a payment to a practice group of multiple doctors. How do you allocate the value among them?

49. “. . . payments provided to a group or practice (or multiple covered recipients generally) should be attributed to the individual physician covered recipients who requested the payment, on whose behalf the payment was made, or who are intended to benefit from the payment or other transfer of value. “This means that the payment or other transfer of value does not necessarily need to be reported in the name of all members of a practice.” For example, many payments or other transfers of value may need to be divided evenly, whereas others may need to be divided in a different manner to represent who requested the payment, on whose behalf the payment was made, or who was intended to benefit from the payment or other transfer of value.

If you’re in a business or profession other than medicine, just try to imagine how a “sunshine law” would impact the way you do business.

Meanwhile, what’s most important is to condemn laws that authorize government coercion—even in the superficially innocuous pursuit of “transparency”—before there’s any evidence of particular wrongdoing.