Sunshine Act (PPSA)

National Physician Payment Transparency Program: OPEN PAYMENTS

(also known as the Physician Payments Sunshine Act) 

The National Physician Payment Transparency Program: OPEN PAYMENTS, also known as the Physician Payments Sunshine Act (“the Act”), is a part of the Affordable Care Act passed in March 2010. The purpose of the Act is to provide transparency of an individual physician’s relationships with industry to health care consumers.

The Act requires manufacturers of drugs, biological products, devices, or medical supplies for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program (CHIP) to report on an annual basis to the U.S. Department of Health and Human Services Center for Medicare and Medicaid Services (CMS) certain payments and transfers of value provided to physicians and teaching hospitals (“covered recipients”). The Act also requires applicable manufacturers and group purchasing organizations (GPOs) to annually report both the ownership and investment interests held by physicians or the physician’s immediate family members and the payments or transfers of value made to physician owners or investors.

The Act establishes August 1, 2013 as the date by which applicable manufacturers and applicable GPOs must begin collecting data. The first cycle of data must be reported to CMS by March 31, 2014. CMS will publish the data on a website that will be made available to the general public. The first cycle of data will be published on September 30, 2014. Covered recipients are not required to register with - or report any data to - CMS to be in compliance with the Act. However, covered recipients will be given a very limited window of opportunity to review and dispute the data reported before it is made available to the public. Therefore, CMS encourages covered recipients to register with CMS and subscribe to the listserv to receive special alerts and information updates.

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Important Terms

• Applicable Manufacturer – Any entity operating in the United States that is engaged in the production, preparation, propagation, compounding, or conversion of a covered drug, device, biological, or medical supply. The definition of applicable manufacturer extends to an entity under common ownership with an applicable manufacturer which provides assistance or support to an entity with respect to the production, preparation, propagation, compounding, conversion, marketing, promotion, sale or distribution of a covered drug, device, biological, or medical supply.
• Applicable Group Purchasing Organization (GPO) – Any entity which operates in the United States that purchases, arranges for or negotiates the purchase of a covered drug, device, biological, or medical supply for a group of individuals or entities, and not solely for use by the entity itself. Physician Owned Distributors (PODs) that purchase products for resale are included in the definition of GPO.
• Covered Drug/Device/Biological/Medical Supply – Any drug, biological product, device, or medical supply for which payment is available under Medicare, Medicaid, or CHIP either separately, as part of a fee schedule payment, or as part of a bundled payment rate. For a drug or a biological product, the Act covers only those drugs and biological products that, by law, require a prescription to be dispensed. For a device or medical supply, the Act only covers devices and supplies that require premarket approval by, or premarket notification to, the Food and Drug Administration.
• Covered Recipients – A physician or a teaching hospital. Physician includes doctors of medicine and osteopathy, dentists, podiatrists, optometrists and licensed chiropractors. Family members of physicians with ownership or investment interests in an applicable manufacturer or GPO are also covered recipients in the sense that the ownership or investment interest and any payment or transfer of value to the family member will be included in the report under the name of the related physician covered recipient. Physicians who are bona fide employees of the applicable manufacturer reporting the payment are not considered covered recipients.
• Payment or other Transfer of Value – Includes compensation and/or the transfer of anything of value to a covered recipient. All payments or transfers of value given to a covered recipient, regardless of whether the covered recipient specifically requested the payment or transfer of value, are covered under the Act. The Act requires all payments or transfers of value to an individual or entity at the request of or designated on behalf of a covered recipient to be reported under the name of the covered recipient.
• Ownership or Investment Interest – Direct or indirect ownership or financial interest in an applicable manufacturer or GPO, including debt, equity, stock, stock options, partnership shares, limited liability company memberships, loans, bonds, or other financial instruments that are secured with property or revenue or a portion of property or revenue. Ownership or investment interest does not include an ownership or investment interest in a publicly traded security or mutual fund, unexercised stock options received as compensation, unconverted convertible securities, or an interest in a retirement plan offered by an applicable manufacturer or applicable GPO to a physician or physician’s immediate family member as a result of the physician’s employment with an applicable manufacturer or applicable GPO.

STAY TUNED! 

CHECK BACK IN AUGUST FOR AN IN-DEPTH Q&A AND A SHORT READINESS ASSESSMENT!

Sunshine Act (PPSA) Q&A 

Questions and Answers

1. When does reporting under the Act begin?
   The Act establishes August 1, 2013 as the date by which applicable manufacturers and applicable group purchasing organizations (GPOs) must begin collecting data. The collected data must be reported to CMS by March 3, 2014. CMS will publish the first cycle of data by September 30, 2014 on a website that will be made available to the general public. CMS will collect, aggregate, and publish a cycle of data annually.
   
2. What kinds of payments or transfers of value from industry will be reported?
   The types of payments and transfers of values that must be reported include, but are not limited to, the following:
   • Gifts
   • Food
   • Entertainment
   • Travel 
   • Grants
   • Honoraria
   • Consulting fees
   • Compensation for services other than consulting
   • Education
   • Research
   • Charitable contributions
   • Royalty or license
   • Current or prospective ownership or investment interest
   • Direct compensation for serving as faculty or as a speaker for a medical education program
3. What will the applicable manufacturer report to CMS?
   Applicable manufacturers are required to report the following information about physician covered recipients to CMS:
   • Name of Covered Recipient
   • Business Address
   • Medical Specialty and NPI Number of Physician Covered Recipients
   • State Professional License Number
   • Date of Payment or Transfer of Value
   • Amount of Payment
   • Form of Payment
   • Nature of Payment (i.e. speaker’s fees, travel, meals, research)
   • Name of Covered Drug/Device/Biological/Medical Supply Associated with the Payment or Transfer of Value
   • Whether the physician holds ownership or investment interests in the applicable manufacturer
4. Do I have to keep a record of payments and transfers of value from industry and file reports to CMS?
   No. The Act does not require covered recipients to keep a record of payments or transfers of value received from applicable manufacturers. Applicable manufacturers and applicable GPOs must maintain records and are required to file reports with CMS, not covered recipients. However, covered recipients will be granted a small window of opportunity each year to review, and refute if necessary, the information applicable manufacturers and GPOs report to CMS before the information is made available to the public. Keeping a record of your relationships with industry would help you keep track of payments or transfers of value you received should you need to refute information you deem erroneous.
   CMS has developed an app named OPEN PAYMENTS Mobile for Physicians. The app was designed to help physicians track the information necessary to review the accuracy of information reported about them by applicable manufacturers and GPOs. Type in OPEN PAYMENTS Mobile for Physicians in the Google Play app store or the iOS Apple app store to download the app.
5. Will the information reported be categorized, or will one lump sum of all payments and/or transfers of value I have received from industry be shown?
   Yes, information on a covered recipient’s relationship with industry will be categorized on the website. The Act requires that applicable manufacturers provide detailed information about each payment or transfer of value to a covered recipient (see answer to question 3 above for a detailed list of what will be reported). In addition, CMS will publish the information on a publicly available website in a manner that ensures the data is searchable, understandable, downloadable, and easily aggregated so that a covered recipient’s relationship with industry is clear.
6. Will the information reported to DHHS about my relationships with industry be restricted in any way?
   Maybe. The Act requires CMS to publish the data reported by applicable manufacturers and applicable GPOs on a website available to the general public. However, if you received a payment or a transfer of value from an applicable manufacturer for work which, if the nature of the work were made public could serve to damage the applicable manufacturer’s competitive or proprietary interests, CMS may grant the manufacturer a delay in publication not to exceed a period of four years.
7. I receive product samples and educational materials from pharmaceutical sales representatives that I distribute to patients. Will the value of the samples and educational materials be attributed to me as a payment and/or transfer of value?
   No. Product samples that are not intended to be sold and are intended for patient use are exempt from reporting. Educational materials that directly benefit patients or are intended for patient use are also exempt from the reporting requirements of the Act.
8. What other types of relationships with industry are exempt from reporting?
   In addition to certain product samples and educational materials (see answer to question 7 above), the Act exempts from the reporting requirements the following types of payments and transfers of value:
   • Discounts, including rebates
   • In-kind items used for the provision of charity care
   • Transfers of value less than $10 
   • Transfers of value to a covered recipient when the covered recipient is not acting in his/her professional capacity. This includes when the covered recipient is a patient, research subject, or is participating in a data collection for research
   • The loan of a covered device or a device under development for a short-term trial period (not exceeding 90 days) to permit evaluation of the covered device by the covered recipient 
   • The provision of a limited quantity of medical supplies (not exceeding 90 days of average daily use) for a short-term trial period to permit evaluation of the covered device by the covered recipient
   • Items or services provided under a contractual warranty, including the replacement of a covered device, as long as the terms of the warranty are set forth in the purchase or lease agreement
   • A dividend or other profit distribution form, or ownership or investment interest in, a publicly traded security or mutual fund
   • Payments for the provision of health care to employee covered recipients under an applicable manufacturer’s self-insured plan or direct reimbursement for health care expenses to employee covered recipients
   • In the case of a covered recipient physician, a transfer of anything of value to the covered recipient with respect to an administrative proceeding, arbitration, legal defense, prosecution, settlement or judgment of a civil or criminal action
   • In the case of a covered recipient who is also a licensed non-medical professional, a transfer or anything of value to the covered recipient if the transfer is payment solely for the covered recipient’s non-medical professional services
9. Why would a pharmaceutical sales representative ask me for my National Provider Identification (NPI) Number and/or my state license number?
   In order to accurately identify physician covered recipients to report payments and transfers of value, the Act requires applicable manufacturers to report the covered recipient’s name, business address, specialty, and NPI number. If a physician does not have an NPI number, the applicable manufacturer may identify the physician by using the physician’s state license number. See answer to question 3 above for a detailed list on what information regarding covered recipients an applicable manufacturer is required to report to CMS.
10. Why is ABC Pharmaceutical asking me if I, or any members of my family, have an ownership or investment interest in their company?
    The Act requires applicable manufacturers and GPOs to report the ownership and investment interests of physician covered recipients to which it makes payments and/or transfers of value. In addition, ownership and investment interests of the physician’s immediate family members must also be reported. Immediate family members include the following:
    • Spouse
    • Natural or adoptive parent, child, sibling
    • Stepparent, stepchild, step-siblings
    • Father, mother, daughter, son, brother-in-law, sister-in-law
    • Grandparents or grandchildren
    • Spouse of a grandparent or grandchild
11. What information about my ownership and/or investment interests in a company that manufactures a covered drug will be reported?
    As noted in the answer to question 10 above, along with payments or transfers of value to a physician, the Act requires applicable manufacturers and GPOs to report on the ownership and/or investment interests held by a physician and/or a physician’s immediate family member (see answer to question 10 for a list of who constitutes an immediate family member under the Act).
    In addition to the report content for payments and transfers of value (see answer provided to question 3 for a listing of the general report content), the following information concerning physician ownership and investment interests will be reported:
    • Whether the ownership or investment interest is held by the physician or by the physician’s immediate family member (the name of the physician will be used, the family member’s name will not be published on the website)
    • The dollar amount invested
    • Value and terms of each ownership or investment interest
12. Will I be able to review the information reported about me before my patients see it?
    Yes. CMS is developing a mechanism to notify covered recipients that the annual data aggregation is complete and that the 45-day window of opportunity to review and dispute the data received from applicable manufacturers and GPOs before it is made available to the public. CMS may provide notice of the review period to covered recipients based on the contact information (i.e. business address or email address) furnished by applicable manufacturers. Therefore, it is important that you provide up-to-date and accurate contact information to ensure you receive prompt notification from CMS.
13. I just checked the CMS website and do not see any information on the lunch I had with a pharmaceutical sales representative.  Why can’t I locate this information?
    Payments and transfers of value to covered recipients will not be reported in real-time. The Act requires applicable manufacturers and GPOs to submit data to CMS on an annual basis. CMS will then aggregate the data and publish it, on an annual basis, on a website made available to the general public.
14. I just checked the CMS website and noticed that a pharmaceutical company is reporting a payment or transfer of value and the amount attributed to me is incorrect.  How do I remedy this?
    If you believe the data from either the current or the previous year concerning your relationship with industry is incorrect, you may contact CMS during the annual 60-day review and comment period to dispute the data. Any data disputes not resolved within the 60-day review and comment period will still be posted on the website, but the data will be flagged as disputed.
15. I work in a group practice in which pharmaceutical sales representatives typically come in and give presentations to office staff. Snacks or meals are usually provided by the sales representative.  What transfer of value will be attributed to me personally?
    CMS allows applicable manufacturers to report the cost per covered recipient for meals or snacks provided in group settings. For example, an applicable manufacturer’s sales representative meets to discuss a new drug with your group practice and brings breakfast to the meeting. The total cost of food provided at the breakfast was $80.00. Five members of the group practice attended the meeting and consumed the breakfast provided. A transfer of value of $16.00 will be reported for each covered recipient attending the meeting that partook in the meal.
16. I conduct clinical research for my employer that is paid for by an applicable manufacturer. What payment or transfer of value will be attributed to me?
    It depends. CMS recognizes that accurately reporting payments or transfers of value for research activities is very complicated for instances in which payments or transfers of value are not provided directly to the covered recipient. The Act sets forth specific rules governing when research payments must be reported. You should speak directly with your employer concerning what will be attributed to you for any research projects you work on for which your employer receives payments or transfers of value from an applicable manufacturer.

Sunshine Act (PPSA) Self-Assessment 

Are you Sunshine Savvy?

Take the self-assessment below to measure your knowledge of the Act’s provisions: 

1. The Open Payments/Sunshine Act does not apply to me because I do not work at a teaching hospital.
   1. True
   2. False
2. I must compile and report annually to CMS data on my relationships with industry.
   1. True
   2. False
3. I will have _____ days to review and resolve any data I dispute with CMS before it is published.
   1. 15
   2. 20
   3. 60
   4. 90
4. I should no longer accept product samples from pharmaceutical sales reps. that I intend to distribute to patients because the value of the samples will be attributed as a transfer of value to me.
   1. True
   2. False
5. Consulting fees paid to me by pharmaceutical companies will not be reported to CMS.
   1. True
   2. False