What will aggregate-spending rules do to healthcare provider recruitment?

It’s still early innings in the implementation of the Physicians Sunshine Act, a part of the Affordable Care Act that requires pharma and med device companies to report financial arrangements or other “transfers of value” to licensed physicians and other healthcare providers. The law’s basic intent has been to track the effects of aggregated payments to physicians who (presumably) might be more favorably inclined to recommend or use a manufacturer’s products. Now, there are signs that it will have broader impact: Money spent in the process of recruiting job candidates could become reportable events—and that report could become a publicly accessible record.

According to Kim First and Jeff Applebaum, CEO and COO, respectively, of The Agency Worldwide, a Los Angeles-based recruitment firm specializing in researchers, medical directors and other high-level pharma and med device executives, the Sunshine Act has stopped some negotiations with candidates in their tracks, or has changed the not-uncommon practice of handing over an airplane ticket for a candidate to meet with a hiring company’s executives. But overall, says First, “it’s the unknowns that people are scared of.” The usually confidential process of recruitment “could become a record that will searchable when the public reporting begins.”

As things stand now, manufacturers were supposed to have filed complete information on themselves, and some aggregated information on recipients of payments, by March 31; another data-entry period begins May 1 to complete the detailed reporting of transactions that occurred between Aug. 1 and Dec. 30, 2013; and all of this is to become public information no later than Sept. 30. Starting last January, payment data will be collected for the full calendar year, and reported early in the following year. However, the entire program has already been delayed for one year from its original target date (for data to be reported in 2013), and more guidance is still coming from CMS. And although there was a $10 de minimis limit on what was to be reported, manufacturers still have to track essentially all payments, in case they amount to more than $100 for the calendar year.

The Agency Worldwide’s First says that only some pharma companies’ HR offices are aware of the rules—but among those that are, such practices as conducting online video interviews are one workaround; another is to put any recruitment costs on the candidate’s shoulders rather than their own. (And, presumably, job candidates coming from other pharma companies, rather than from academia or health systems, are outside the system’s scope.) Other sources, such as ProPublica, an investigative-journalism concern that runs the “Dollars for Docs” website, have already reported that the agg-spend rules are constraining speaker fees and other common industry-HCP interactions.

While this situation makes a hash of executive recruitment until all its ramifications are worked through, The Agency Worldwide’s Applebaum says that at least as far as his firm is concerned, business has never been better. The first quarter of each year is usually a quiet time for recruitment, he says, but his company has seen its activity jump by 200% from the previous quarter, and “all are clients seem to be hiring now,” especially in areas relating to pharmacovigilance and drug safety.