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What You Need to Know About the Physician Sunshine Act

Physicians and the healthcare industry should be aware of changes involving public disclosures required under the Physician Sunshine Act.

The rules coming out of the Sunshine Act are the latest round of government regulations affecting the healthcare industry. This Act was actually passed in 2010 as Section 6002 of the Affordable Care Act, but regulations implementing the law were not passed until February 2013 in 42 C.F.R. 402 and 403. It has only been in the last year that the Sunshine Act has been operational, and it is important that affected parties now understand the law's effects.

Congress stated that the central purpose of the Sunshine Act was to provide for increased transparency and public awareness of financial relationships between certain healthcare providers, drug/device manufacturers and group purchasing organizations (GPOs). The law created a database, searchable by the public, that lists certain payments covered by the Sunshine Act. The Sunshine Act generally requires the following payments to be reported and listed on the database:

  1. Payments or other transfers of value by applicable manufacturers of covered products to physicians and teaching hospitals
  2. Certain ownership or investment interests by physician's or physician's family members in certain manufacturers and GPOs
  3. Payments or other transfers of value by a GPO to physician owners or investors if the ownership or investment interest was held at any point during the reporting year.

What constitutes a "payment" or "transfers of value" is defined broadly and can, for example, include reimbursement for a meal. The Sunshine Act requires the report of the payment, transfer of value or ownership interest to be made by the manufacturer or GPO to the Center of Medicare and Medicaid Services ("CMS"). Physicians and teaching hospitals, as the recipients of the payment and the Sunshine Act report, should be given under the law the opportunity to review the CMS report for accuracy. Once the review and correction process has been completed, the data is made public via CMS's "Open Payments" website.

The first data collection period under the Sunshine Act covered transactions that occurred

from August 1, 2013, through December 31, 2013. The data collected for this period was required to be submitted to CMS by March 31, 2014, and was published by CMS on September 30, 2014. Following this initial data collection period, CMS will publish the Sunshine Act data on an annual basis and the data reported will include a full twelve months of payment data. Data collected for each calendar year will be published by CMS in June of the following calendar year.

As a result of the Sunshine Act, the public now has access to a wide variety of payments between certain parties in the healthcare industry. While much of the industry is still unaware of the new database, the access to it by the public is already wide-spread and legal effects of that access are beginning to occur.

Physicians should be aware of the rules and the reporting, including what will be reported and their rights to review reports prior to publication on the database. I am advising hospitals and healthcare facilities to incorporate these new standards into their credentialing process. Healthcare providers should also prepare its disclosures and other notices consistent with information available to the public on the database.

Submitted by Attorney Heather Springer as published in the June Issue of MED Magazine

July 21, 2015