The Physician Payments Sunshine Law and You: Building Stronger Industry-Physician Interactions
Signed into law in 2010 as part of the Affordable Care Act, the Physician Payments Sunshine Act (the “Sunshine Law”) requires manufacturers, including certain distributors, of medical devices, drugs, biologicals, and medical supplies to track and report certain payments made to and transfers of value provided to physicians and teaching hospitals.
The Sunshine Law also requires manufacturers and Group Purchasing Organizations (GPOs) to report certain ownership and investment interests held by physicians and their immediate family members.
The main purpose of the Sunshine Law is to provide patients with enhanced transparency into the relationships their health care providers have with life science manufacturers, including medical technology companies. It’s important to note that the Sunshine Law does not restrict industry-physician collaboration or interactions, or prohibit payments or transfers of value. Rather, it requires tracking and reporting of payments and transfers of value that result from these interactions.
The Official CMS Website for the Sunshine Law, also referred to as the National Physician Payment Transparency Program:
Information from the AMA:
Information from AdvaMed:
- Aug. 1, 2013: Manufacturers and GPOs are required to begin collecting information about payments, transfers of value, and ownership interests.
- Mar. 31, 2014: First manufacturer / GPO report is due. This report must cover August – December 2013 payments/ transfers of value and ownership interests. Subsequent reports will cover an entire calendar year and be due the 90th day of the following year.
Aug. 2014 (in subsequent years, during the month of May): Physicians and teaching hospitals may access their own data via secure online portal for review and correction.
- 45 Days to Review and Initiate Disputes
- 15 Days to Resolve Disputes
- Sept. 30, 2014: 2013 data published on a public website by CMS. In subsequent years, information will be published on June 30.
- Manufacturers of medical devices, drugs, biologicals, and medical supplies operating in the United States, including certain wholesalers/distributors and certain entities under common ownership (5% or more) with a Manufacturer (collectively, “Manufacturers”) must submit Transparency Reports annually to CMS on Payments / Transfers of Value given to Physicians and Teaching Hospitals;
- Group Purchasing Organizations (GPOs) and Manufacturers must report ownership and investment interests held by Physicians or their Immediate Family Members and any Payments / Transfers of Value to Physician Owner/Investors.
Payments and Transfers of Value made by Manufacturers to “Physicians” and “Teaching Hospitals” must be reported. Payments made to physicians and teaching hospitals through a third party or those made to a third party at the request of or on behalf of a physician or teaching hospital are reported and include the name of the third party.
The Sunshine Law applies to all of the following types of doctors, as long as they hold a current license to practice in the United States. These doctors are subject to the law regardless of whether or not they are enrolled in Medicare, Medicaid or CHIP.
- Doctors of Medicine;
- Doctors Osteopathy;
- Optometrists; and
- Residents are excluded from the requirement (including residents in medicine, osteopathy, dentistry, podiatry, optometry and chiropractic).
- Third Party Entity recipients of a Payment/ Transfer of Value made “at the request of” or "in the name of" a Physician, must be reported in the name of the physician and the recipient.
Payments, Transfers of Value, and Ownership/Investment interests.
Payments and Transfers of Value: must be reported when an item is worth $10 or more and if items are worth less than $10, when the sum of all items given to a particular recipient over a year exceeds $100.
Manufacturers are required to report:
(a) Direct payments and transfers of value
(b) Indirect payments and transfers of value; and
(c) Payments and transfers of value that are made to a third party at the request of or on behalf of a physician.
Ownership and Investment Interests held by Physicians or their Immediate Family Members, in GPOs and Manufacturers—
- The Dollar Amount Invested and the Value and Terms of the ownership or investment interest (excluding interests in publicly traded securities or mutual funds).
- Any Payments / Transfers of Value provided to the Physician owner or investor.
- Manufacturer or GPO Name;
- Name and Business Address of the Physician;
- Specialty, NPI, and State Professional License Number;
- Dollar Value and Date of the payment/transfer of value;
- Form of Payment /Transfer of Value (e.g., Cash/Cash Equivalent; In-kind Items / Services; Stock, stock option, or any other ownership interest; and Dividend, Profit, or Other Return on Investment);
- Nature of Payment/Transfer of Value – one of 16 pre-defined Categories (see next column);
- Device Product Name, Therapeutic Area or Product Category related to the payment/transfer of value;
- Context - (optional) brief description of the context of the payment/transfer of value;
- Name of Entity that Received the Payment/Transfer of Value, if not provided to the Physician directly;
- Whether the Payment/Transfer of Value was provided to a Physician holding Ownership / Investment Interests in the Manufacturer; and
- Whether the Physician or an Immediate Family Member holds the Ownership/Investment Interest.
Payments related to research must be reported separately and submitted the year the payment occurs stating the name of the institution & principal investigators. Some of these details may qualify for delayed publication to the public CMS website.
What are the Nature of Payment Categories that must be used to describe Payments and Transfers of Value?
The Payment/Transfer of Value must be categorized as one of the following:
- Consulting fee;
- Compensation for serving as faculty or as a speaker for an accredited or certified CE program;
- Compensation for serving as faculty or as a speaker for an unaccredited and non-certified CE program;
- Compensation for services other than consulting, including serving as faculty at an event other than a Continuing Education (CE) program;
- Gifts (DJO prohibits provision of gifts to HCP);
- Entertainment (DJO prohibits payments for HCPS entertainment);
- Food and beverage;
- Travel and lodging (including specifying the destination);
- Charitable Contribution;
- Royalty or License;
- Ownership or Investment Interest (Current /Prospective);
- Grant; and Space rental or facility fees (Teaching Hospital only).
Payments /Transfers of Value that are:
for Speaking at a Continuing Education Program if 3 Conditions are met:
- 1) Program meets accreditation / certification requirements and standards of ACCME, AOA, AMA, AAFP or ADA CERP;
- 2) The Manufacturer does not select the speaker and does not provide a distinct, identifiable set of individuals to be considered as speakers; and
- 3) The Manufacturer does not directly pay the physician speaker
- from Existing Personal Relationships (e.g., one spouse who works for a manufacturer giving a gift to his or her spouse who is a Physician)
- Less than $10 when the total value for the year is less than or equal to $100 (This amount to be adjusted beginning 2014 with the consumer price index)
- Educational Materials That Directly Benefit Patients or are Intended For Patient Use
- Discounts and Rebates
- In-Kind Items for the Provision of Charity Care
- Product Samples (including coupons and vouchers) where there is an agreement in writing that the products will be provided to patients
- Evaluation/demonstration units – of 90 days or less average daily use
- Items and Services Provided Under a Contractual Warranty, Service or Maintenance Agreement
- Received by the Physician as a Patient (e.g., Product Samples, Coupons, or Vouchers or as a subject in a research study)
- for the Provision of Healthcare Services provided to a manufacturer’s employees or their family ( e.g., on-site clinic)
- for Licensed Nonmedical Professional Services (e.g., a physicianattorney paid only for legal services)
- for services with respect to a Civil or Criminal Action or Administrative Proceeding (e.g., as an expert witness)
Before information is publicly posted, a Physician will have 45 days to Review submitted data and Initiate Disputes once access to his/her own data is made available by CMS on a secure online portal. If the dispute is not resolved during this 45 day period, an additional 15 days are provided to come to a resolution.
If the dispute continues, the data will still be posted to the public webpage but will be flagged as Disputed.
Physicians are also able to seek correction or contest reports for two years after access has been provided to a report with disputed information.
Reporting incomplete or inaccurate information has the potential to mislead patients and other stakeholders and damage the reputation of manufacturers, physicians and teaching hospitals.
Depending on the circumstances, non-compliance with the Sunshine Law’s reporting requirements could subject a manufacturer to financial penalties ranging from:
(a) $1,000 to $10,000 for each payment or transfer of value not reported; and
(b) $10,000 to $100,000 for “knowingly” failing to report a payment or transfer of value.
The total maximum penalties which may be imposed against a Manufacturer or GPO is $1,150,000 per year.
Most of what is provided in the Transparency Reports will be published annually on a public website that is searchable. 2013 data will be published on Sept. 30, 2014. In subsequent years, information made public on June 30.
The Secretary of HHS will also be required to submit a report to Congress on an annual basis.