There is a broad consensus in academic medicine that
collaborations between physicians and industry (e.g., drug and medical device
manufacturers) are vital to the discovery and development of life-saving drugs,
therapies and medical devices. However, there is also a consensus that there
must be boundaries and appropriate balance to reduce conflicts of interest that
affect teaching and clinical care. As summarized by Korn and Carlat, “Drug and
device promotional practices (including free gifts and meals, payments for
speaking and other transfers of value) lead to shifts in physicians’ treatment
choices and teaching, favoring new and more expensive products over existing
ones that are just as effective, cheaper and have longer track records of
The Physician Payment Sunshine Act (Sunshine Act) was
enacted in 2010 by the federal government as part of the Patient Protection and
Affordable Care Act. The Sunshine Act requires pharmaceutical and medical
device companies to report payments and other “transfers of value” made to
physicians and teaching hospitals to the Centers for Medicare and Medicaid
Services (CMS) for inclusion in a publicly-accessible database. According to
the Congressional sponsors of the Sunshine Act, “The process is not designed to
stop, chill or call into question beneficial interactions between physicians
and industry, but to ensure that they are transparent.”
The Sunshine Act seeks to:
transparency regarding financial payments from pharmaceutical and medical
device companies to physicians;
- Reveal the nature and extent of financial
information to health care consumers to allow them to make informed
Undisclosed payments to physicians for promotional speaking
were a particular concern and were targeted as a priority by Senator Chuck
Grassley and other sponsors of the legislation. Ten states (including Colorado)
have similar statutes, requiring public posting of payments that physicians
receive from industry.
The Final Rule for the Sunshine Act was issued by Department
of Health and Human Services on February 8, 2013. All covered industries were
required to begin tracking payments to physicians starting on August 1, 2013.
In fact, many pharmaceutical companies had been voluntarily tracking and
reporting such payments long before the law became effective.
The first annual reports from industry to CMS are due in March
2014 (covering payment data from August 1, 2013 to December 31, 2013). All data
are collected on a calendar year cycle and reported by industry to CMS once per
Reporting Details and Logistics
Beginning in 2014, companies will be required to report
payment data to CMS, which will then post the data on a website that can be
searched by healthcare consumers. The searchable database will be available to
the public on September 30, 2014 (in future years, updated data will
be available on June 30).
required to report?
The answer is, all
companies that have a physical presence in the United States and manufacture
products covered by Medicare, including pharmaceuticals, medical devices and
medical supplies. The obligation to report payments and transfers of value
rests entirely with the company that made the payment; physicians have no reporting obligations.
All payments or other “transfers of value” worth $10 or more
from a covered manufacturer to a physician or teaching hospital. “Physician”
includes doctors of medicine, osteopathy, dentistry, dental surgery, podiatry,
optometry and chiropractic medicine. Payments to residents, allied health
professionals and non-physician prescribers are excluded from the reporting
requirement. Non-physician scientists are also excluded.
The covered payments and
“transfers of value” include:
Consulting fees (or other compensation for consulting, such as dividends, profits or stock options)
- Payments for speaking, including direct payments for speaking at continuing education courses that are not accredited
- Honoraria of all types
- Research-related expenses
- Textbooks and articles
- Gifts, entertainment, food, travel and lodging
- Scholarships and other education-related payments
- Charitable contributions on behalf of physicians
- Royalties or licensing fees
- Facility and (for teaching hospitals) space rental fees.
For non-cash payments (such as food
and beverages), manufacturers will report the estimated value of the payment.
exempt from reporting?
Honoraria for lecturing at certified and accredited
CME courses are excluded from the Sunshine Act reporting requirements, so long
as the company does not have any role in suggesting or selecting speakers, and
so long as the company does not pay the physician directly. Short-term loans of
medical devices are excluded, as are buffet meals, snacks and beverages
generally available to participants of large-scale professional conferences.
Drug and products samples and educational materials that directly benefit patients are excluded from reporting under the
Sunshine Act. However, textbooks and article reprints are not excluded under this provision. Payments and transfers of value
worth less than $10 are also excluded, as are in-kind items used for the
provision of charity care.
payments to third parties reported (and under whose name)?
Payments made by
a manufacturer to a third party, on behalf of a physician, will be reported under the identity of the individual physician who performed
the services or who was the intended beneficiary of the payment. For
example, payments to the University of Colorado, to the School of Medicine or
to UPI, intended to compensate for consulting or other services performed by a
physician, will be reported under the identity of the physician who performed
the services. Payments given to another person or to a preferred charity must
also be reported.
will appear on the public website?
The following data will be reported by
the manufacturer and subsequently disclosed to the public: Name, business
address, state license number and practice specialty of the physician receiving
the payment; the date and amount of the payment; the reason for the payment
(for example, research, consulting, gift, honoraria, entertainment, travel or
speaking honoraria); and any pharmaceutical product, biological or medical
device related to the payment.
the penalties for failure to comply with the Sunshine Act?
CMS may impose a
penalty of $10,000 for each failure to report a payment. “Purposeful failure”
to report is subject to a fine of up to $100,000 per violation. Because of
these high penalties, drug and device companies are expected to be inclusive
and far-reaching in the payment data they report.
physicians be notified when payments are reported?
CMS will notify
physicians that a manufacturer has reported a payment, if the physician
registers with CMS to receive such notification. In June 2014, CMS will provide
physicians with access to their personal financial disclosure reports for the
prior calendar year.
the reported data are inaccurate?
Physicians will be able to access their
data prior to public posting.
Physicians can challenge the accuracy of the data through an established
dispute resolution process. Therefore, it
is important for physicians to maintain independent records regarding payments
from industry. If a physician disputes the accuracy of data submitted by a
manufacturer to CMS, the agency will have at least 45 days to review the data
and work with the manufacturer to resolve the dispute and clarify or eliminate
the data. If no resolution is achieved, the data will be publically posted by
CMS with a notation that the data are in dispute. Early in 2014, CMS is
expected to launch its new portal, where physicians can sign up to receive
notices when their individual consolidated data are available for review, and
where physicians can contact manufacturers to dispute the accuracy of a report.
Your Responsibilities as a School of Medicine Physician
First, remember that
physicians have no obligation to report payments from manufacturers.
Reporting obligations rest solely with the manufacturers.
- Physicians should
nonetheless maintain accurate records of payments from industry in case
they want to dispute the accuracy of the data being reported about them.
The American Medical Association has created a free Smartphone app (OPEN
PAYMENTS Mobile for Physicians) to help physicians track reportable
- Physicians should register
with CMS in order to receive advance notification of any payment data
reported by a manufacturer to CMS about the physician. Physicians may
register with CMS beginning in 2014. Click
here for more information about the physician registration process.
The American Medical Association offers this additional
advice: Physicians should “ensure that
all financial and conflict-of-interest disclosures required by [their employer]
are current and updated regularly. Review and update these disclosures several
times each year. Those entities requiring financial or conflict-of-interest
disclosures may compare information posted on the public website.”