Health Law News From Arnold & Porter

Health Law News From Arnold & Porter

August 13, 2013
2 min read

‘Sunshine Act’ data collection begins now: Important questions for physicians to consider

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From international law firm Arnold & Porter LLP comes timely views on current regulatory and legislative topics that weigh on the minds of today’s physicians and health care executives.

After several months of anticipation and expectation, the Affordable Care Act’s physician payment reporting rules went into full effect on Aug. 1. Referred to as the “Sunshine Act,” the rules require group purchasing organizations (GPOs) and manufacturers of certain drugs, devices, biologicals, or medical supplies to track many “transfers of value” to physicians and teaching hospitals (as well as ownership or investment interests held by physicians or their family members). For 2013, manufacturers and GPOs must report to CMS both direct payments and indirect payments — over which the payor exercises some degree of control (eg, payment from a manufacturer to a research organization with the direction that the organization pay a specific physician) — made to physicians or teaching hospitals between Aug. 1 and Dec. 31. CMS intends to publish this information on a public website in a form that identifies the physician receiving a payment or other transfer of value, the manufacturer making the payment, and the payment amount.


Although the Sunshine Act only creates reporting obligations for GPOs and manufacturers, physicians should be aware of several important details about the process. Initially, the rule includes a number of specific exceptions to the general requirement, which means that not every payment or transfer of value is a reportable event. While food and drink are generally reportable, for example, buffet meals, snacks, soft drinks, and coffee generally available to all participants at a conference or other large-scale event are not reportable. Also, product samples that are intended for patient use (and not intended to be sold) are excluded from the reporting requirements, as are certain educational materials that directly benefit patients or are intended for patient use. Perhaps most importantly, payments to a speaker at an accredited CME event are not reportable if certain, specific criteria are met.

In addition, manufacturers will be reporting payments related to research activities that are captured in a written agreement, contract, or research protocol (including pre-clinical research, FDA Phases I to IV research, and investigator-related investigations). Payments for medical research writing and/or publication may need to be reported if the activity is included in the written agreement or research protocol.

Finally, physicians will have an opportunity to review the payment information reported by manufacturers and dispute any incorrect information. To do so, however, physicians will need to track the payments or other transfers of value that they receive from GPOs and manufacturers, and they also must be prepared to review the public reports as soon as CMS makes them available.

Manufacturers will submit data collected during the 2013 reporting cycle to CMS between Dec. 31, 2013 and March 31, 2014, and the data will be posted on the public website by Sept. 30, 2014. Physicians will be allowed to register with CMS in early 2014 and review the information that has been reported about them before it is made publicly available. Physicians must work directly, however, with the relevant manufacturer or GPO to resolve any disputes about payment information, and CMS is implementing a fairly tight timeline to make corrections.

Physicians and other interested parties can monitor any new developments through CMS’ Open Payments website.

Elizabeth Owens, JD, can be reached at Arnold & Porter LLP, 555 12th St. NW, Washington, DC 20004-1206; 202-942-5593; email: