On February 1, 2013, the Centers for Medicare and Medicaid
Services ("CMS") issued the much anticipated final rule
("Final Rule") implementing the federal Physician Payment
Sunshine Act ("Sunshine Act"). Enacted in 2009 as part of
the Patient Protection and Affordable Care Act, the Sunshine Act
requires two different types of reporting to CMS.
First, US entities engaged in the production, preparation,
propagation, compounding, or conversion, including those who hold
title to any drug, device, biological, or medical supply covered by
Medicare, Medicaid, or CHIP must submit annual reports of certain
payments or transfers of value provided to physicians and teaching
hospitals. Second, manufacturers and group purchasing organizations
(including physician-owned distributorships) (together
"GPOs/PODs") must submit annual reports of physician
ownership or investment interests held in such manufacturers and
GPOs/PODs.
When reporting payments to physicians, manufacturers must provide
several items, including:
- physician name, address, specialty, NPI, and state license number(s);
- date and amount of payment;
- form of payment (e.g., cash, in-kind items/services, ownership interest, dividend/profit);
- nature of payment (e.g., consulting or speaker fee, honoraria, gift, entertainment, food/beverage, travel/lodging, education, research, royalty/license, charitable contribution, grant); and
- name of related covered drugs, devices, biologicals, or medical supplies.
When reporting physician ownership interests, manufacturers and GPOs/PODs must provide some of these same items as well as:
- the dollar amount invested by each physician or immediate family member; and
- the value and terms of each ownership or investment interest.
These are not exhaustive lists, but demonstrate the type of
information that will be available to the public as described
below.
Under the Final Rule, manufacturers must start collecting data on
August 1, 2013, and submit their first annual reports to CMS by
March 31, 2014. CMS has the authority to impose penalties of up to
$10,000 for each payment or other transfer of value not reported
timely, accurately, or completely, up to a per annual report cap of
$150,000. However, these penalties are not the only risks faced by
manufacturers, physicians, and teaching hospitals under the
Sunshine Act.
CMS will publish most of the reported information on a searchable
public website by September 30, 2014. As a result, manufacturers,
physicians, and teaching hospitals will be subject to increased
scrutiny not only from patients, but also from enforcement
authorities who will be able to mine the reported data for
compliance purposes. In fact, CMS has made clear that complying
with the Sunshine Act reporting requirements does not exempt
manufacturers, physicians, or others from any potential liability
associated with payments or other transfers of value or with
physician ownership or investment interests (e.g., potential
liability under the federal Anti-Kickback Statute or False Claims
Act). Accordingly, it is critical that manufacturers,
physicians, and teaching hospitals ensure that all payments or
transfers of value exchanged are in full compliance with the
Anti-Kickback Statute, False Claims Act, and all other applicable
federal and state healthcare laws. Physicians would also be wise to
register through the CMS website so they can review the reported
data prior to its publication and dispute any payments or items of
value incorrectly attributed to them.
The Sunshine Act requirements are extensive and compliance
throughout your organization must be a high prioritybefore the
August deadline.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.