September 17, 2013By Lance Baily

Has Your Sim Center Lost Donation Opportunities Due To The SunShine Act?

medical supply donations

The letter below was submitted for distribution by the Former Director of The Center for Simulation Education & Safety Research (CSESaR): Bruce Nappi. He has shared with me that since the Sunshine Act has taken into affect – 28 different medical equipment and supplies vendors that have previously donated supplies to his center have stopped coming around. If you have experienced similar issues Bruce is hoping to connect with you via his email. Read his letter below to learn more about this concerning issue:

“The Sunshine Act is Finally Final”


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Dear Simulation Friends,

Recently I retired from my position as Director of the CSESaR center, at U. Florida, Jacksonville. But, medical simulation is in my blood. So, I keep looking for new sim challenges to take on. I’m writing this article to seek your support on one of them.

I’m sure, most of you have come across Conflict of Interest rules that must be addressed when involving medical device or pharmaceutical manufacturers in training. Prior to a few years ago, conflicts were mostly related to food supplied for classes and hand outs of literature. In December 2011, the Centers for Medicare & Medicaid Services (CMS) released proposed language to implement Section 6002 (1) of the Affordable Care Act. The rules became final in January 2013. (2) That language, typically referred to as the SUNSHINE ACT, added section 1128G to the Social Security Act, (3) which requires applicable manufacturers of drugs, devices, biologicals, or medical supplies to report annually to the Secretary of CMS each INDIVIDUAL payment or TRANSFER OF VALUE in excess of $10 provided to physicians or teaching hospitals. The Secretary is required to PUBLISH the submitted payment information on a PUBLIC website.

While this seemed to many people to be a simple requirement for transparency, it created a landslide of repercussions. To comply with the law, teaching hospitals substantially beefed-up their Conflict of Interest policies.


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Section 1128G adds the following requirements. Any applicable manufacturer that provides a payment or other transfer of value to an entity ( i.e. sim center ) or individual at the REQUEST of or DESIGNATED ON BEHALF OF a recipient, shall annually submit to the CMS Secretary, in electronic form, the following information: name of recipient, address, specialty, provider ID, amount of payment or value, date of transfer, and description of payment or value. The payment or value can include: cash, items, SERVICES, stock, and stock options. The description of the payment or value could include things like: consulting fees, compensation for services other than consulting, honoraria, gifts, entertainment, FOOD, travel, education, research, charitable  contributions, royalty or license, direct compensation, grants, or any other nature of the payment or other transfer of value as defined by the Secretary. If the payment or value is related to marketing, education, or research specific to a covered drug, device, biological, or medical item, the item must be identified. The name of the RECIPIENT must be supplied. In addition, there are significant penalties, running up to $100K per transfer, and $1M per filed report for “willful” failure to report a transfer. Penalties up to $10K per transfer and $150K for the year apply even for MISTAKES in filing. 

Due to the complexity of tracking all these transactions, a whole new business has been created for companies like IntelliCentrics to provide services like RepTrax. To use the service, manufacturers reps now have to register with a service, go through a credentialing process, HIPPA, vaccinations, TB test, background checks, Fire Safety courses etc. and pay a fee for doing so – this year $229 for RepTrax. When they come on campus, the reps must log in to kiosks in hospitals to record every visit and transfer of information. The system is also used to schedule appointments for the reps to see physicians.

In short, the device and pharmaceutical companies don’t like this. Not only does it block their access to physicians, it costs them a lot of money, creates a nightmare of paperwork, AND, it essentially exposes their entire marketing effort. So, they’ve reacted strongly.

Here’s where this directly impacts some simulation programs. Before 2011, CSESaR had a lot of equipment support from a large number of vendors. This spanned the range from needles and suture all the way to OR instrument trays and laproscopic towers. Large centers like CSESaR might get half to $1M in donated equipment and disposables a year. In the spring of 2012, things changed. It was like a switch getting thrown. In our case, 28 vendors just disappeared! The result is, without that industry support for our training efforts, either the efforts will hurt, or the training programs will have to provide a huge additional amount of training money for supplies and equipment.

A few calls around determined that CSESaR was not alone facing this problem. I’ve been digging deeper into the problem and finding groups forming to take action. Here’s where you can help. Send me a short email and let me know if you’ve seen a cut back in industry support at your center or not. If yes, I’ll send you back a short survey form. I’ll pull together the responses and follow-up on this article with a summary of what I receive. I will only report aggregate data, so no individual center will be identified.

Best wishes to all and if you have anything to add please contact me!

Bruce Nappi
[email protected]  

References: 

1. Medicare, Medicaid, Children’s Health Insurance Programs; Transparency Reports and Reporting of Physician Ownership or Investment Interests  CMS-5060-F

https://www.federalregister.gov/articles/2011/12/19/2011-32244/medicare-medicaid-childrens-health-insurance-programs-transparency-reports-and-reporting-of

2. The Sunshine Act is Finally Final   http://www.forbes.com/sites/aroy/2013/02/11/the-sunshine-act-is-finally-final/

3. Social Security Law, Sec. 1128G http://www.ssa.gov/OP_Home/ssact/title11/1128G.htm

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Looking to get more medical supplies donated to your Sim Lab? Read my 2010 article “How to Get FREE Sim Lab Supplies”!

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