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HHS tightens conflict of interest regulation

By William Sacks
12:37 PM
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While healthcare organizations have been preoccupied with EHR meaningful use, ICD-10 and HIPAA 5010, a lesser-known set of regulations that could have a dramatic effect on research institutions, and which will also require technological solutions, was finalized this year.

On Aug. 23, 2011, the Department of Health and Human Services published its final rule on financial conflicts of interest (FCOI). The regulations are a significant update on initial rules published in 1995, and they demand greater transparency and accountability for research institutions that receive Public Health Service (PHS) funds from the National Institutes of Health (NIH).

High-tech hospitals and practices may be able to leverage their infrastructure to comply with the final rule, but organizations that still collect and track financial disclosure information on paper could have a significant challenge ahead. The compliance deadline is August 24, 2012, so institutions that currently have FCOI compliance on the back burner will need to start developing new disclosure processes immediately.

Below are five steps to help organizations comply with the FCOI final rule and suggestions about how to incorporate technology to make the process easier.

1.    Involve senior leadership: Just as with EHR meaningful use and ICD-10, complying with the FCOI final rule should be a top priority for an organization’s senior leadership. Updating or creating a database that tracks physicians’ and other research investigators’ remuneration from pharmaceutical and medical device companies - as well as other financial interests that might affect their decision-making - will require staffing time and money. Leadership awareness and endorsement of the initiative will help secure those resources. Leaders can learn more about the final rule from this NIH Webinar that was held on November 30: http://grants.nih.gov/grants/policy/coi/fcoi_webinar_20111130.htm.

2.    Improve data gathering capability: The new regulations define “significant financial interest” (SFI) as any industry compensation that exceeds $5,000 over 12 months, down from the current $10,000 limit, any equity participation in a non-public company, and certain intellectual property rights. Disclosure is required if these payments or interests are "reasonably related" to institutional responsibilities. A significant financial interest can be that of the investigator, his or her spouse or dependent children. Ideally, organizations should be gathering financial disclosures at least annually through an automated on-line questionnaire that feeds into a centralized database. If disclosures are still collected on paper, then that information should be entered into a relational database that can be updated on a transactional basis as physicians and researchers join the organization or receive new industry compensation, and as institutions apply for PHS funding.

3.    Create management plan templates: One of the most significant new aspects of the final rule calls for institutions to create management plans for mitigating FCOI among research investigators. Some of those management plan components include:
•    Disclosure of FCOI to participants;
•    Appointment of an independent monitor to protect the design, conduct, and reporting of the research against bias resulting from the FCOI;
•    Modification of the research plan if FCOI is determined;
•    Change of investigator responsibilities, or disqualification from participation in all or a portion of the research;
•    Reduction or elimination of the financial interest (such as sale of an equity interest); and
•    Severance of relationships that create financial conflicts.
By creating and pre-approving language addressing each of these components, organizations will be better prepared to quickly create plans to address conflicts that are identified.

4.    Assess ability to respond to public disclosure requests within five days: Also new to the final rule, institutions must respond within five days to a written public request for financial conflict information. The proposed version of the regulation required organizations to post disclosures on a website, but that requirement was eliminated after the public comment period. Even so, if an organization has a robust website and physician directory, it could post financial disclosures and conflict of interest policies there, as some major research institutions have already done:  http://my.clevelandclinic.org/Documents/About/COI.pdf.

5.    Train investigators: Another new wrinkle in the final rule requires physicians and researchers to be trained about the institution’s FCOI policies and procedures before engaging in research related to PHS funding. Researchers also must be retrained at least every four years, or immediately when an institution’s FCOI policies change, an investigator joins an organization, or a researcher is found noncompliant with the policy. From a tech perspective, this training can be done through an individual Web-based class or a live Web conference with other participants.

The cost of implementing changes to comply with the final rule is an allowable cost that may be eligible for reimbursement as a Facilities and Administrative cost on PHS supported funding. Even amid a multitude of competing demands, compliance with the new FCOI regulations is critical. In an environment where research funding is more competitive than ever, organizations must ensure that nothing stands in the way of conducting essential research that is a critical part of the academic enterprise.

William Sacks has more than 30 years of experience in healthcare management as a consultant, medical practice manager and faculty practice plan director. He is the co-founder and vice president of Health Care Compliance Strategies, a provider of online compliance training and tracking solutions to healthcare facilities.