Will Physician Payment Sunshine Act Data Usher In A New Era Of FCA Litigation?

The payment data pharmaceutical and medical device manufactures are required to submit to CMS under the Physician Payment Sunshine Act will soon be made public. HHS' Office of the Inspector General, the DOJ and whistle-blowers' attorneys will likely utilize the data in fraud investigations and filing False Claims Act lawsuits, according to a report from the law firm of ReedSmith.

Under the Physician Payment Sunshine Act, pharmaceutical and medical device manufacturers and group purchasing organizations are required to register with and submit payment and investment interest data to CMS on certain financial relationships between themselves and physicians and teaching hospitals.

In May, manufacturers and GPOs will be required to submit to CMS detailed 2013 payment data. With some exceptions, CMS will be making the data public by Sept. 1.

Wile the publicly available data is intended to provide more transparency for patients — to allow them to have a better understanding of the financial relationships between physicians and pharmaceutical and medical device companies — it is likely the information will be used to initiate investigations and support complains under the FCA, according to the report.

It is easy to see how publishing information regarding payments from pharmaceutical and medical device manufacturers to physicians and teaching hospitals could implicate the Anti-Kickback Statute, and by extension, the FCA. Any payment from a pharmaceutical or medical device manufacturer to a physician who prescribes a product manufactured by the company providing the payment could be viewed as potentially inappropriate remuneration intended to influence prescribing behavior, according to the report.

Publicly available information reported as a result of the Sunshine Act may also have off-label promotion implications. Notably, reports to CMS must include the name of the drug or the type of device that forms the basis of the payment. Tying the payment to a particular drug or type of device could raise suspicions of off-label promotion. A pharmaceutical or medical device manufacturer that promotes its products for uses for which the product has not yet been approved by the U.S. Food and Drug Administration is at risk of FCA liability, according to the report. 

Payments going to physicians who specialize in an area that is outside the scope of a pharmaceutical or medical device's approved indication could raise suspicions the manufacturer is promoting the product for unapproved uses, according to the report.

More Articles on False Claims Act:

FCA Risks Soar With Release of Medicare Physician Billing Records 
Tuomey Ordered to Pay $70M While Waiting On Appeal 
Rising Scrutiny of Kwashiorkor Claims Places Hospitals at Risk of FCA Lawsuits 

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