Life Science Compliance Update

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September 25, 2012

Physician Payment Sunshine: Vermont Offers Reporting Amnesty Until October 1st, Also Revises Regulation One More Time

Over the past few years, we have covered closely the evolving transparency laws in the state of Vermont, regarding physician-industry relationships and payments. 

The Vermont Attorney General’s Office recently announced an offer of amnesty, expiring October 1, 2012, to manufacturers of medical devices and biologics who failed to comply with reporting obligations under the Prescribed Products Gift Ban and Disclosure Law (“Gift Ban and Disclosure Law”).  Accordingly, under certain conditions, the Attorney General will not seek penalties on manufacturers who failed to comply with reporting requirements under the Gift Ban and Disclosure Law.   

The announcement first came back in July, when Vermont Assistant Attorney General for the Public Protection Division, Kate Whelley McCabe, gave a presentation at CBI’s annual Aggregate Spend and Sunshine Conference.   

The Attorney General anticipates, however, that it will require manufacturers to disclose “some aggregate information related to the [unreported] activity” at a later date.  The offer of amnesty is limited to the following circumstances:   

  • The manufacturer’s obligations under the Gift Ban and Disclosure Law began on or after July 1, 2009.
  • The manufacturer failed to report required information for FY10 (7/1/09-6/30/10), FY11 (7/1/10-6/30/11), or 2011 (7/1/11-12/31/11).
  • The manufacturer’s potential penalties are only for failure to report required information. The amnesty is not applicable to back-payment of registration fees or violating other provisions of Gift Ban and Disclosure Law. Thus, a manufacturer will not be forgiven for   failing to pay registration fees or providing banned items or payments to relevant entities. 

The Attorney General may also execute an Assurance of Discontinuance to ensure the manufacturer’s future compliance with the Gift Ban and Disclosure Law.  This is essentially an agreement by the Attorney General not to take action against a manufacturer in exchange for an assurance of future compliance with the Gift Ban and Disclosure Law.  

Manufacturers seeking to benefit from this offer must email the following information on or before October 1, 2012:  

  • Manufacturer name.
  • Reporting period(s) for which the manufacturer failed to report.
  • Name, physical address, email address and phone number of person with whom the Office should communicate about the unreported activity. 

Other Changes to Vermont Regulations 

McCabe presented several slides about the changes to the Vermont regulations.  Highlights include:

  • Prescription eyewear no longer prescribed product
  • Medical food and infant formula permissible and must be reported with samples
  • OTC products other than OTC drugs, nonprescription medical devices, nonprescription durable medical equipment, medical food and infant formula no longer permissible
  • Report distribution of all product with samples, including:
    • OTC products
    • Product donated to free clinics
    • Reporting a pharmacy as recipient no longer permissible
    • Combination product defined by reference to federal law
    • Change in ID number for Green Mountain Care Board Member 

She also gave insight into how the Vermont law will be preempted by the federal Sunshine law.  Specifically, for 2012, Vermont preempted from requiring disclosure of: 

  • allowable expenditures and permitted gifts which would have been reported to federal government under “Sunshine”
  • Allowable expenditures and permitted gifts valued at under $10, unless aggregate to recipient over $100 

Not preempted:

  • Gift ban and samples reporting
  • Except as noted above, allowable expenditures and permitted gifts not required to be reported to federal government 

McCabe’s presentation indicated that the short term impact will be that in 2012, the Attorney General’s office will accept voluntary reporting of preempted disclosures.  She noted that manufacturers should indicate on the compliance officer form whether they intend to submit data that would also have been submitted to the federal government.  She noted that in the long term, “the utility of disclosed information may decrease because of gaps caused by partial preemption.”  Nevertheless, she noted that there is “no appetite in Vermont legislature for repealing the law.” 

Interestingly a recent study published in the Journal of Pharmacy Practice found that a “high proportion of Vermont providers are unaware of the current law.”  Moreover, at “least a quarter disagreed with banning small gifts and meals.” 

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Now a days not all the physicians are showing there interest in welcoming the patients with Medicaid/Medicare !

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