PM360 SEPTEMBER 2010

COMPLIANCE CENTER

What Do I Need To Know About the Physician Payment Sunshine Act?
By RICHARD S. LEV, JD

What is the Physician Payment Sunshine Act?
The Sunshine Act is part of the Patient Protection and Affordable Care Act signed by President Obama on March 21, 2010, and it requires applicable manufacturers to publicly report all payments or “transfers of value” to physicians or “Covered Recipients.” The law goes into effect on January 1, 2012, and thereafter all payments and transfers made during the 2012 calendar year will need to be reported to the federal government with the first report due March 31, 2013, covering all 2012 payments and transfers.

Who does it cover?
It covers all manufacturers of drugs, devices, biologics, or medical supply operating in the U.S. (or in a territory, possession, or commonwealth of the U.S.). It also applies to “Covered Recipients” defined as physicians (other than employees of the manufacturer) or teaching hospitals.

What information needs to be disclosed?
The name of any Covered Recipient (and if the recipient is a physician, his or her specialty), national provider identifier, business address, amount of payment or other transfer of value, the dates in which payment or other transfer of value was provided, and a description of the form of payment or other transfer of value. Disclosable payments include:

• Consulting fees
• Compensation for services other than consulting
• Honoraria
• Gifts
• Entertainment
• Food
• Travel (including the specified destinations)
• Educational grants
• Research grants
• Charitable contributions
• Current or prospective ownership or investment interests
• Royalties or licenses
• Direct compensation for serving on a medical education program as a Faculty or Speaker

The product name, if any, must also be disclosed if the payment is related to marketing, education, or research specific to a covered drug, device, biological, or medical supply. In addition, any third-party payments attributable to a physician or teaching hospital must be reported under the name of the Covered Recipient.

What are the exclusions?

1. A transfer of anything the value of which is less than $10, unless the aggregate amount transferred to the Covered Recipient by the applicable manufacturer during the calendar year exceeds $100, subject to an increase each year using the consumer price index. Note that the Sunshine Act does preempt certain states’ laws that require similar reports.
2. Product samples that are not intended to be sold and are intended for patient use. Note: A separate law requiring reporting of all samples left with HCPs will go into effect starting in 2011.
3. Educational materials that directly benefit patients or are intended for patient use.
4. The loan of a medical device for a short-term trial period, not to exceed 90 days, to permit evaluation of the covered device by the Covered Recipient.
5. Items or services provided under a contractual warranty, including the replacement of a covered device, where the terms of the warranty are set forth in the purchase or lease agreement for the covered device.
6. A transfer of anything of value to a Covered Recipient when the Covered Recipient is a patient and not acting in the professional capacity of a Covered Recipient.
7. Discounts (including rebates).
8. In-kind items used for the provision of charity
   care.
9. In the case of an applicable manufacturer who offers a self-insured plan, payments for the provision of healthcare to employees under the plan.
10. In the case of a Covered Recipient who is a licensed nonmedical professional, a transfer of anything of value to the Covered Recipient if the transfer is payment solely for the nonmedical professional services of such licensed nonmedical professional.
11. In the case of a Covered Recipient who is a physician, a transfer of anything of value to the Covered Recipient if the transfer is payment solely for the services of the Covered Recipient with respect to a civil or criminal action or an administrative proceeding.

How will the information be publicly disclosed?
The Department of Health and Human Services (HHS) will create a publicly available government website which will be searchable and in an understandable and easily aggregated format.

Publication will start no later than September 30, 2013, and on June 30 of each subsequent year. Each payment will identify: