Making Sense of the Sunshine Act

Sep 01, 2013

For decades now, financial relationships have existed between pharmaceutical companies and physicians and hospitals, some of which have come under scrutiny and caused considerable public controversy. One example of a common financial relationship are payments made by pharmaceutical companies to physicians for consulting services on experimental products under investigation or development. These transactions have involved research activities, gifts, speaking fees, meals, or travel, and often occur privately so that no one except for the parties directly involved knows the details of the transactions.

The typically private nature of these relationships has recently changed, as the Centers for Medicare & Medicaid Services (CMS) now requires public transparency about these transactions occurring on or after August 1, 2013. A newly enacted law, the Physician Payments Sunshine Act (also known as the Open Payments program) is intended to make information about these payments between pharmaceutical companies, physicians, and hospitals transparent. Open Payments requires that manufacturers of drugs, devices, biologicals, and medical supplies annually report to CMS most payments and "other transfers of value" that they make to covered recipient physicians and teaching hospitals. Manufacturers and group purchasing organizations (GPOs) will also report ownership and investment interests held by physicians or their immediate family members during the preceding calendar year and payments made to those physicians.

As a result of the Affordable Care Act (ACA), such financial relationships will be publically disclosed on a CMS Open Payments website so that healthcare consumers, clinicians, and stakeholders can be better informed about the nature and magnitude of these relationships. Industry data collection tracking these transactions began on August 1. Industry will register with the program and submit 2013 data by March 31, 2014. In the fall of 2014—a little more than a year from now—CMS will post the 2013 data on the Open Payments website, which will be accessible to the public. This public posting will occur ­annually.

You may be considering what this new law means for your organization and have serious questions. Is my organization ready for this new law? Do I know what we have to do to comply or how to go about doing it? How much will compliance cost? And, by the way, what will public transparency of this information mean—will it be helpful or will it distort public opinion and hamper beneficial relationships between our company and physicians?

lorem ipsum