NOV-DEC 2018

MedEsthetics—business education for medical practitioners—provides the latest noninvasive cosmetic procedures, treatment trends, product and equipment reviews, legal issues and medical aesthetics industry news.

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28 NOVEMBER/DECEMBER 2018 | MedEsthetics value if you have referred or may refer federal program business to the vendor. Such gifts may also trigger reporting requirements under Sunshine Act regulations. Part of the Affordable Care Act (ACA), the Physician Payments Sunshine Act requires pharmaceutical companies and durable medical equipment suppliers to report gifts to physicians in excess of $25 to the Centers for Medicare and Medicaid Services (CMS). More Stringent State Statutes In August 2018, the California State Senate passed SB 790 that would restrict pharmaceutical companies from giving gifts and incentives to medical professionals. If the bill be- comes law, it will prohibit companies from providing fl ights, travel and speaking fees, entertainment, consulting payments or other fi nancial benefi ts to healthcare providers. The bill's sponsor, Senator Mike McGuire, stated, "There's a reason why doctors answer the call to practice medi- cine—to help people in their time of need. But growing evidence reveals that fi nancial relationships between some physicians and pharmaceutical companies confi rm what has been suspected—fi nancial incentives change minds." He points to the rising costs of prescription drugs and the excessive number of gifts taken by California-based physi- cians, which he puts at more than $1.4 billion in 2014 alone, as the reason for the legislation. Opponents, including Senator Ted Gaines and Sen- ate Minority Leader Patricia Gates, believe its passage will limit Californians' access to experimental drugs and deter California-based doctors from participating in clinical trials. As drafted, this bill looks like it would only apply to drug manufacturers and prescribed medications, not device manufacturers. Interestingly, it includes a provision that says if the Sunshine Act is repealed, the state will enact a similar provision to disclose payments. SB 790 is a combination of Vermont's and Minnesota's gift ban laws. It explains what allowable expenditures are and then carves out certain exceptions from the "gift" defi nition (e.g., samples, reprints, scholarships, rebates, etc.). Under the legislation as currently drafted, a "gift" is defi ned as: • Anything of value provided for free to a healthcare provider. • Payment, food, entertainment, travel, subscription, advance, service, or anything else of value provided to a healthcare provider, unless it is an allowable expenditure as defi ned in subdivision (a) or the healthcare provider reimburses the cost at fair market value. Allowable expenditures include: payment by a manufac- turer of a prescribed product to the sponsor of a signifi cant educational, medical, scientifi c or policy-making conference or seminar, provided that the payment is not made directly to a healthcare professional or pharmacist. The bill passed the Senate by a 23-13 vote and now heads to the California Assembly. If it passes, it will then go to the governor's desk for signature. Ethical Considerations Aesthetic providers who offer only elective cosmetic proce- dures are in an interesting position in that federal regula- tions, such as the AKS and Stark Law, focus on providers who accept Medicare, Medicaid or other public funding. But many state laws extend to all healthcare providers. Keep in mind also that these regulations are based on ethical con- cerns that extend to all medical professionals. Whether a patient is paying for care with cash, private health insurance, Medicaid or Medicare, physicians should consider only what is in the best interest of the patient when prescribing care and providing referrals. Unfortunately, receiving extravagant gifts can affect one's judgement. In some cases gifts, such as medical equip- ment, education and prescription drug samples, can benefi t patients. To help guide physicians' decision making, the American Medical Association developed the following guidelines on "Gifts to Physicians from Industry": To preserve the trust that is fundamental to the patient-physician relationship and public confi dence in the profession, physicians should: (a) Decline cash gifts in any amount from an entity that has a direct interest in physicians' treatment recommen- dations. (b) Decline any gifts for which reciprocity is expected or implied. (c) Accept an in-kind gift for the physician's practice only when the gift: 1. Will directly benefi t patients, including patient education 2. Is of minimal value (d) Academic institutions and residency and fellow- ship programs may accept special funding on behalf of trainees to support medical students', residents' and fellows' participation in professional meetings, including educational meetings, provided: 1. The program identifi es recipients based on inde- pendent institutional criteria. 2. Funds are distributed to recipients without specifi c attribution to sponsors. Allyson Avila is a partner at the national law fi rm of Gordon & Rees Scully Mansukhani. Contact her at 845.406.2935, LEGAL ISSUES

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