From the Contributor’s Corner: Physician Payment Sunshine Act – From the Physicians and Teaching Hospitals’ Perspective

Health Wolters Kluwer Law & Business will periodically feature posts from outside contributors who are members of our Advisory Board. Today’s post comes from Kristine Chung Salcedo.

The Physician Payment Sunshine Act (Sunshine Act), promulgated under the Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148), is designed to reduce the risk of inappropriate financial arrangements among drug manufacturers, group purchasing organizations (GPOs), physicians and teaching hospitals by:

(1)                 requiring the electronic reporting of certain financial arrangements to CMS, and

(2)                 publishing such arrangements on a CMS website (Social Security Act §1128G, added under PPACA §6002).


Proposed Rule and Effective Date

 In 2011, CMS proposed a rule to implement the Sunshine Act and anticipated finalizing the rule in 2012 (Proposed rule, 76 FR 78742, 78743, Dec. 19, 2011). CMS will not require data collection by applicable manufacturers and GPOs before January 1, 2013.

Reporting Requirements

 The Sunshine Act imposes two major reporting requirements on applicable manufacturers of covered drugs, devices, biologicals, or medical supplies, and applicable GPOs:

(1)                 Applicable manufacturers must report to CMS any payment or other transfer of value worth $10 or more to a physician or teaching hospital. CMS plans to publish this information on a website.

A payment or other transfer of value (“payment”) is a transfer of anything of value.  The nature of such payments may be gifts, entertainment, food, travel, education, research,  charitable contributions, and grants.

(2)                 Applicable manufacturers and applicable GPOs must report to CMS any ownership and investment interests of physicians and their immediate family members. Ownership or investment interest would include both direct and indirect ownership (for example, debt or equity). CMS plans to publish this information on a website.

How Physicians and Teaching Hospitals Are Affected

 While the Sunshine Act’s reporting requirements apply to only certain manufacturers and GPOs, physicians and teaching hospitals should understand how the Sunshine Act applies to them. For example:

(1)                 A drug company gives a physician complimentary tickets to a Broadway show. The drug company would be required to report this gift to CMS. The CMS website would publish this gift and identify the physician, including the physician’s name, business address, specialty, and national provider identifier (NPI).

(2)                A physician owns stock in a medical supplier company. The medical supplier company is required to report this investment to CMS. The CMS website would publish this investment and identify the physician, including the physician’s name, business address, specialty, and NPI.

Kristine Chung Salcedo, Esq., is a compliance analyst at the corporate headquarters of Cancer Treatment Centers of America, where she focuses on physician and hospital compliance, HIPAA, health reform, and billing compliance. Prior to her current position, Kristine worked as a writer analyst in the Health Law department of Wolters Kluwer. There, she researched and developed content for a number of health care compliance publications and applications. Kristine is a member of the American Health Lawyers Association and the Health Care Compliance Association. She obtained her undergraduate degree from Barnard College, Columbia University, and her law degree from the University of Wisconsin Law School.