December 29, 2011
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Health Law Alert: Just in Time for the New Year: CMS Delivers the Sunshine Act
The Centers for Medicare and Medicaid Services (CMS) has released a proposed rule implementing the Physician Payments Sunshine Act. The Sunshine Act requires drug, device, and other manufacturers and group purchasing organizations (GPOs) to publicly disclose certain financial relationships with physicians and teaching hospitals. The idea is that by making these relationships transparent, consumers will be able to judge whether their providers have any conflicts of interest with respect to the drugs, devices, and other products they prescribe or recommend. CMS will accept comments on the proposed rule through February 17, 2012, and will publish a final rule in 2012.
Highlights of the Sunshine Act
Who Must Report? Manufacturers and Group Purchasing Organizations
Covered Recipients and Reportable “Transfers of Value”
The reports will need to include a large amount of information, including the name and identifying information for the manufacturer making the payment, the doctor or teaching hospital receiving it, the amount of each payment, and the drug or device associated with the payment or transfer of value. In addition, manufactures and GPOs are required to define the “form” and “nature” of payments into one of several specific categories. For example, a manufacturer would need to indicate whether a cash payment was a “consulting fee,” “honoraria,” or “gift.” If the payment falls into multiple categories—for example a physician receives a consulting fee and travel expenses—CMS proposes that each payment should be disclosed separately. CMS will make most of the information that is disclosed publically available in an online searchable database. Reporting organizations will have to attest to the accuracy and completeness of the information they provide. These organizations, and the physicians and teaching hospitals about whom the reports are made, will have a 45-day window after reporting (before CMS makes the information publicly available) to correct any errors that are discovered.
Manufacturers and GPOs will also be required to disclose whether physicians or their immediate family members have an ownership or investment interest in the entity itself. These organizations will need to disclose a variety of information about any such investment interests, including the dollar amount invested and the value and terms of each ownership or investment interest. The proposed rule indicates that investment interests will be defined in a similar manner as in the Stark self-referral law.
Modified Reporting Deadlines
The modified deadline allows those organizations who have been working to collect the required data the option to be proactively transparent by reporting all of the required financial relationships for 2012. For those who have postponed collecting the required information until the guidelines were released, the delay offers an opportunity to prepare for compliance in 2013.
Report, Rinse, Repeat
Prepare for the Final Rule: Speak out and Get Compliant
If you have questions about the Sunshine Act, please contact Jesse Berg at firstname.lastname@example.org or 612.632.3374.
This article is provided for general informational purposes only and should not be construed as legal advice or legal opinion on any specific facts or circumstances. You are urged to consult a lawyer concerning any specific legal questions you may have.
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