What does delay in implementing an industry-favored aspect of Obamacare portend?

Nothing is worse for business than regulatory uncertainty.

Senators Chuck Grassley (R-Iowa) and Herb Kohl (D-Wisconsin) were the architects of the Physician Payment Sunshine Act that aimed to bring transparency into the financial relationship between physicians and the medical technology, biotech and pharmaceuticals industries. Under it, companies would have to report what money and gifts they gave to physicians and teaching hospitals. The bill was signed into law as part of the broader Affordable Care Act in 2010.

The problem is that the Centers for Medicare & Medicaid Services hasn’t figured out a way to implement it.


Now, Reuters is reporting that medical device maker Medtronic is urging CMS to produce final regulation regarding implementation before the year’s end. The letter from Medtronic and Pew Charitable Trusts is noteworthy for the tone of impatience that the medical device maker is voicing.

“Many companies have already invested significant resources in preparing to comply with the sunshine provision,” representatives from Medtronic Inc. and the Pew Charitable Trusts said in a Nov. 16 letter to Marilyn Tavenner, acting administrator of CMS. “We request that final regulations be released no later than December of this year.”

Medtronic and Pew are not the only ones upset with the delay — a draft regulation was released in December 2011, and currently the Office of Management and Budget is reviewing the final version, according to Reuters.

In May, senators Grassley and Kohl showed their frustration at CMS’ inability to implement the law.

Grassley said:

It’s disappointing that CMS won’t even collect data at all this year.  The process has dragged on long past the statutory deadline for implementation.  Consumers need to know more about the financial relationships between their doctors and drug companies sooner rather than later.   It’s important that CMS get this right in every way, including the usefulness and accuracy of the information.  Given all of the extra time, CMS will have no further excuses for not accomplishing these goals.

Kohl was less harsh but showed some chagrin as well.

While I am disappointed by this delay and the timeline, I do look forward to working with CMS to finalize the rules so that data collection can begin in January 2013.

The delay raises a broader question of the timing of implementation of other aspects of the Affordable Care Act. Given how unprepared states are, can we reasonable expect that the state exchanges will be operational in a little over year?

The jury might be out on that given that even nonhealthcare legislation like the financial reform law, also known as the Frank Dodd Act, is also delayed. Both the Affordable Care Act and, from what I hear, the Frank Dodd Act are effecting a sea change, but if delays become a pattern, it serves no one — neither consumers nor businesses.

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