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Physician Payment Sunshine Act – Reporting Requirements Delayed
The Physician Payment Sunshine Act (the "Sunshine Law"), can be found in Section 6002 of the Patient Protection and Affordable Care Act ("PPACA"), which was enacted in March of 2010. The Sunshine provision's purpose is to prevent fraud abuse and waste in the health care system by making the public aware of payments made to applicable health care providers.
Overview
The proposed rule requires all manufacturers of "covered" drugs, biologicals, devices and medical supplies to report all payments to or on behalf of physicians and teaching hospitals to the Centers for Medicare and Medicaid ("CMS"). The definition of teaching hospital is any hospital that receives direct or indirect graduate medical education payments from CMS. CMS will annually publish a list of such hospitals. Currently the proposed rule would only apply to medical device products requiring a premarket approval by or premarket notification to the Food and Drug Administration ("FDA"); this excludes most class I medical devices.
The proposed rule states that CMS is considering requiring manufacturers to begin tracking payments 90 days following the publication of the final rule, with a partial year report due on March 31, 2013. However, CMS solicited comments regarding the amount of time manufacturers will need following publication of the final rule and whether it will be feasible to submit the required information by March 31, 2013.
Manufacturers of covered products are required to report certain types of payments that are made to physicians and teaching hospitals as further described below. Manufacturers are not required to report sales data even if sales are made directly to physicians or teaching hospitals. Further, manufacturers are not required to report marketing or other payments that are made to persons other than physicians and teaching hospitals.
Additional information regarding the requirements of the Sunshine Law can be found in the complete legal memo.
Implementation Status
On December 19, 2011, the Centers for Medicare and Medicaid ("CMS") published a proposed rule in connection with the Sunshine Law. The proposed rule represents CMS' effort to define the scope and process for such reporting obligations. Note that the rule is currently subject to public comment. The final rule, incorporating or otherwise addressing such comment, is expected to be published next year. The Sunshine Law anticipated an implementation date of January 1, 2012. However, because of the delay in promulgating regulations, CMS has stated that it will delay implementation. The proposed rule suggests that covered manufacturers will need to begin tracking payments 90 days following the date CMS publishes a final rule, with a partial year report due on March 31, 2013. Interested parties can submit comments on the proposed rule until February 17, 2012. After CMS reviews the comments, it will consider the comments and publish the final rule. It is possible that the final rule will be significantly different from the proposed rule.
We will keep you advised and will be providing more information about the effect of the Sunshine Law on our members as it becomes known, particularly regarding our lobbying efforts. In addition, we will devote a large portion of time to this topic during our upcoming Executive Summit annual meeting (January 25-27) to ensure all attendees are up to speed on this important issue.
Download complete legal memo here.
Questions
Members of The Vision Council with questions should contact Greg Chavez at gchavez@thevisioncouncil.org or 703.740.1399.
