Sunshine Act Frequently Asked Questions
Who does the law apply to?
All physicians (MDs, DOs, dentists, podiatrists and chiropractors), other than those who are bona fide employees of the manufacturer reporting the payment, are covered under this law. This includes physicians who do not treat patients, such as medical researchers and physician administrators. It does not include other clinicians, such as nurses, nurse practitioners, physician assistants or pharmacists. Additionally, immediate family members of physicians who have ownership or investment interests in applicable manufacturers or GPOs will be affected by this new law.
The law also impacts teaching hospitals, including all hospitals that receive Indirect Medical Education (IME) funding, Graduate Medical Education (GME) funding and psychiatric hospital IME. CMS will compile a list of teaching hospitals each year and make it available to the public at least 90 days prior to the start of the next reporting year. The list will be applicable for the entirety of that reporting year.
I am a resident. Does this law apply to me?
No, medical residents are excluded from the definition of physician for the purposes of this regulation.
I am physician administrator of a teaching hospital and no longer see patients. Does this law apply to me?
Yes, CMS explicitly declined to exclude physicians who do not treat patients from this rule. Therefore, every time you make a request to an applicable manufacturer or GPO for a grant, contribution or other payment or transfer of value on behalf of your teaching hospital, it may result in a report of a payment or transfer of value made at your request or on your behalf.
The same applies to managing partners of group practices who may make requests on behalf of their practice, medical researchers, physician executives, physician board members of professional organizations and others. Such individuals should consider the foregoing when requesting or permitting payments or transfers of value to be made on their behalf when applicable manufacturers or GPOs are involved.
What must be reported under this rule?
Any payments or transfers of value from an applicable manufacturer or GPOs must be reported to CMS by applicable manufacturers and GPOs. This means they must also report textbooks, food or other items provided to physicians. Both direct and indirect payments or transfers of value will be reported to CMS, including those that are made by the applicable manufacturer or GPO at the request of or on behalf of a physician or teaching hospital.
For 2013, payments or transfers of value of less than $10 do not need to be reported, but the applicable manufacturer or GPO is generally required to submit a report regarding a physician or teaching hospital when payments or transfers of value reach at least $100 in the aggregate with some exceptions. Generally, payments under $10 will need to be tracked to ensure reporting if the aggregate threshold is exceeded. Going forward, those amounts will be indexed to the consumer price index for all urban consumers (CPI-U) for June of the previous year.
As mentioned above, payments or transfers of value under $10 will need to be included in the $100 aggregate threshold. However, there are some exceptions, including but not limited to:
- Those provided at large-scale conferences and events, as well as those open to the public
- Product samples, including coupons and vouchers that can be used by a patient to obtain samples not intended for sale and intended for patient use
- Educational materials and items directly benefiting patients or intended for use by or with patients, including the value of a manufacturer’s services to educate patients regarding a covered item
- Transfer of anything of value to a covered physician when the physician is a patient, research subject or participant in data collection for research and is not acting in his or her professional capacity
- Discounts, including rebates
- In-kind items used for the provision of charity care
- Payments or transfers of value to a covered recipient where made solely in the context of a personal, non-business related relationship
What is an indirect payment or transfer of value?
An indirect payment or transfer of value is made to a covered physician or teaching hospital through a third party at the direction, instruction or requirement of an applicable manufacturer or GPO. Where payments or transfers of value are made to non-physician practitioners for the benefit of physicians or teaching hospitals, it would constitute an indirect payment or transfer of value to the physician or teaching hospital and need to be reported.
If my organization receives a payment or transfer of value, will I be reported as an indirect recipient if I was not involved in making the request?
You will not be reported as an indirect recipient if a payment or transfer of value is made to a physician’s employer or third party organization and is indirectly passed onto the physician without direction from the manufacturer that the payment be made to a specific physician or to any physician at all. CMS agreed with ACC’s concerns that some indirect relationships are just too tangential to be meaningful for reporting purposes. For example, a physician employed by a teaching hospital that receives a charitable contribution from an applicable manufacturer generally would not be considered as a reportable recipient of that charitable contribution, even though his or her salary may be offset by the contribution or a new piece of equipment might be purchased that benefited him or her in some way.
Similarly, unrestricted grants ACC receives from applicable manufacturers will not constitute indirect payments to members, even if they are used to offset potential increases in dues, because the manufacturer did not direct, require or instruct ACC to use the donation to make grants to physicians. If the manufacturer donates the money or transfer of value for the express purpose of funding awards or grants, then the awards or grants would be considered indirect payments and would be reported.
Physicians who are involved in making requests to applicable manufacturers for payments or transfers of value on behalf of their practice, teaching hospital or other organization will be reported as recipients of a payment or transfer of value. Such individuals should carefully consider the implications before requesting or permitting a payment or transfer of value to be made on their behalf.
What will manufacturers/GPOs report to CMS?
Manufacturers/GPOs will report the following information to CMS:
- Name of covered physician or teaching hospital. For physicians, this is as listed in the National Plan & Provider Enumeration System (NPPES), including first and last name, middle initial and suffix, as applicable.
- Primary business address of covered physician or teaching hospital
- Physician specialty
- Physician NPI as available
- State professional license number(s) for at least one state in which the physician is licensed and the state in which the license is held
- Amount of payment or transfer of value
- Date of payment or transfer of value
- Form of payment or transfer of value
- Nature of payment or transfer of value
- Name(s) of up to five related covered drugs, devices, biological or medical supplies, unless the payment or transfer of value is not related to a particular covered item. Specific information, such as National Drug Code, name under which the device or supply is marketed, etc. will also be required.
- Payments to third parties where the payment or transfer of value was provided to the third party at the request of or designated on behalf of a covered physician or teaching hospital. The payment or transfer of value will be reported in the name of the covered physician or teaching hospital.
- Payments or transfers of value to physician owners or investors, including immediate family members of physicians
- Optional statement to provide additional context for the payment or transfer of value
What is meant by “form of payment or transfer of value?”
Form of payment or transfer of value is defined as:
- Cash or cash equivalent
- In-kind items or services
- Stock, stock option or any other ownership interest
- Dividend, profit or other return on investment
I own stock in company that manufactures medications and/or medical devices. Will that be reported?
Yes, the law requires the reporting of ownership and investment interests, as well as payments or transfers of value, held by physicians or their immediate family members.
Ownership or investments do not include:
- Those in a publicly traded security or mutual fund
- One arising from a retirement plan offered by the applicable manufacturer or GPO to the physician or immediate family member through the physician’s or family member’s employment with that manufacturer or GPO
- Stock options and convertible securities received as compensation until the options are exercised or convertible securities are converted to equity (they may, however, qualify as a direct or indirect payment or other transfer of value
- Unsecured loan subordinated to a credit facility
Where the applicable manufacturer or GPO does not know of the ownership or investment interest, it does not need to be reported.
My wife is an investor in a company that manufactures a cardiovascular medication. Will that be reported? Will her name be listed in the database?
Ownership and investment interests of immediate family members of physicians are required to be reported. Immediate family includes:
- Natural or adoptive parent, child or sibling
- Stepparent, stepchild, stepbrother or stepsister
- Father-in-law, mother-in-law, daughter-in-law, son-in-law, brother-in-law or sister-in-law
- Grandparent or grandchild
- Spouse of grandparent or grandchild
The name and relationship of the family member will not be reported. Where multiple family members are owners or investors in an applicable manufacturer or GPO under the same terms, the interest may be reported in the aggregate for those family members and the value reported will include the total value of all of the immediate family members’ interests.
What is meant by “nature of payment or transfer of value?”
Payments or transfers of value will be broken down into the following categories (referred to as nature of payment or transfer of value):
- Consulting fees
- Compensation for services other than consulting, including serving as faculty or as a speaker at an event other than a continuing medical education program
- Food and beverage
- Travel and lodging, including the destinations
- Charitable contribution
- Royalty or license
- Current or prospective ownership or investment interest
- Compensation for serving as faculty or as a speaker for an unaccredited and non-certified continuing education program
- Compensation for serving as faculty or as a speaker for an accredited or certified continuing education program
- Space rental or facility fees (teaching hospital only)
Where the payment or transfer of value could fall into multiple categories, the applicable manufacturer has the flexibility to assign the category for the nature of the payment or transfer of value.
What is meant by charitable contribution?
A charitable contribution is defined as “any payment or transfer of value made to an organization with tax exempt status under the Internal Revenue Service Code of 1986, but only if it is not specifically described by one of the transfers of value made to one of the other nature of payment categories.”
What if I request a charitable contribution but do not direct the manufacturer as to where to make the donation?
Keeping in mind where a charitable contribution does not include payments or transfers of value in exchange for any service or benefit, regardless to whom the contribution is made, charitable contributions requested by physicians or teaching hospitals that are not directed to a specific charity are still considered reportable payments or transfers of value.
If I serve as a speaker for an ACC accredited and certified continuing medical education (CME) program that is sponsored by applicable manufacturers, will the fee and travel expenses that I receive be reported?
As a result of the advocacy efforts of ACC, the American Medical Association (AMA) and others, CMS has decided to treat certified and accredited CME programming differently than other types of CME. Specifically, payments or transfers of value from applicable manufacturers do not need to be reported where:
- The CME program is certified and accredited by the Accreditation Council for Continuing Medical Education (ACCME), the AMA or three other professional society accreditation and certification entities
- The applicable manufacturer does not pay the covered recipient directly
- The applicable manufacturer does not select the covered recipient speaker or provide the third party, such as ACC, with a distinct, identifiable set of individuals to be considered as speakers for the CME
Except where otherwise indicated, ACC CME programs are typically accredited and certified by ACCME. ACC CME program faculty are not paid directly by the manufacturer. Instead, all funds are provided to ACC, which pays faculty honoraria based on a predetermined schedule that applies to all ACC CME programs, as well as travel expenses. Sponsors of ACC CME programs have no input into the content or faculty for the relevant CME program.
Because of this, there is no requirement that manufacturers and GPOs report payment of CME faculty honoraria and travel expenses to CMS.
Additional information will be furnished to ACC CME faculty directly as ACC works with counsel to ensure compliance with this new regulation. Because data collection will not begin until August 2013, ACC’s 2013 Annual Scientific Session will not be affected.
If I attend an ACC accredited and certified CME program that is sponsored by applicable manufacturers, will that be reported?
This would constitute an indirect payment or transfer of value, and as such, would typically require reporting. However, CMS has provided that where the applicable manufacturer is unaware of the covered recipient, indirect payments or other transfers of value need not be reported. Where ACC makes attendee lists available for its certified and accredited CME programs, the manufacturer would be aware of the identity of physician attendees, and thus, would be reportable. That said, CMS is not interested in attendees who might receive some tangential benefit in the form of reduced or eliminated registration fees. Meals, however, may need to be reported depending on the size of the event or conference.
Additional information regarding the effects of this provision on ACC accredited and certified CME programs, including ACC’s Annual Scientific Session will be provided to attendees as ACC works with counsel to ensure compliance with this new regulation. Given that data collection does not begin until August 2013, ACC’s 2013 Annual Scientific Session will not be affected.
If I go to a manufacturer-sponsored event that is not certified and accredited and includes food and beverages, will that be reported? If so, how will the value be determined?
Generally, yes, attending a manufacturer-sponsored event where you receive a payment or transfer of value, that is free or discounted attendance, food and beverages, etc., will be reported. The value of those food and beverages will be determined based on the total number of partaking individuals, rather than the number of partaking physician attendees.
The exception to this is for large scale events. Manufacturers are not required to report food and beverages provided to all participants at a large-scale event unless sponsoring applicable manufacturers can establish identities of attendees who partook.
If a drug company sales representative brings breakfast for my practice, is that reportable? What if only administrative and non-physician clinical staff partake?
Assuming there is no benefit to the physicians from the breakfast, the breakfast is not reportable if none of the physicians partake. If any of physicians do partake, then the meal is reportable. The cost of breakfast would be divided by the number of participants (not the total number of practice staff). It would only get reported for those physicians who partook of the breakfast.
This method will apply, regardless as to whether the representative was present for the entire meal.
What is meant by research for the purposes of the Sunshine Act?
Research is defined as “a systematic investigation designed to develop or contribute to generalizable knowledge relating broadly to public health, including behavioral and social sciences research” and includes pre-clinical research and FDA Phases I-IV research, as well as investigator-initiated investigations. To qualify as research either a written agreement or contract or research protocol is necessary. A direct contract between a manufacturer and covered physician or teaching hospital is not the only indicator of research; a chain of agreements linking the manufacturer and physician or teaching hospital will be sufficient.
Payments or transfers of value that may be related research but do not meet the definition of research will be reported under the other categories.
How will research payments be attributed to physicians and teaching hospitals?
Research funding provided by manufacturers to physicians and/or teaching hospitals will be reported differently than other payments or transfers of value because of the complexity of the arrangements. Reporting of payments or transfers of value for research, as with the categories of payments or transfers of value, will not be limited to practicing physicians.
Where research is the reason for the payment or transfer of value, the following information must be reported:
- The name of the research institution, individual and/or entity receiving the payment or other transfer of value and specific identifying information as to the recipient
- Total amount of research payment, including all research-related costs for activities outlined in a written agreement and/or research protocol
- Name of research study
- Name of related covered drugs, devices, biological or medical supplies
- Information about each covered physician principal investigator
- Under certain circumstances, information pertaining to research-related payments or transfers of value may be eligible for delayed publication
- Research entity name and other identifying information
- Total amount of payment
- Principal investigator information
While I am the principal investigator of a study for my site, I am not the study’s overall principal investigator. Will I be listed in the report?
Yes, CMS will require all recipients of research funding from applicable manufacturers to be reported, regardless of whether they are a covered physician or teaching hospital and whether they received the payment directly from the manufacturer or through a contract research organization or similar entity.
How will information be reported where I receive a payment or transfer of value for participation in a program that has multiple sponsors from applicable manufacturers?
Where payments or transfers of value are provided to a covered physician or teaching hospital, CMS will allow for flexibility in reporting. Keeping in mind that only those payments or transfers of value directed to or designated on behalf of covered recipients must be reported, manufacturers and third parties will work together to determine the best method for reporting the payment or transfer of value to ensure accurate reporting.
How will the information be reported to the public?
Information will be reported by CMS beginning Sept. 30, 2014, and annually on June 30 every year thereafter. CMS is required to create a website for this purpose. The ACC will provide more information on CardioSource.org as it gets closer to the reporting date.
When and how will the information be reported to CMS?
Applicable manufacturers and GPOs are required to report the requisite information to CMS by March 31 of each year. The first reports will be submitted to CMS by March 31, 2014.
CMS has created a proposed reporting template for manufacturers to use that can be found on the CMS website. Comments on the proposed template are due on April 9, 2013.
Will I have the opportunity to review my report before it becomes public?
Covered physicians and teaching hospitals will have the opportunity to review their reports before they become public. This review period will last 45 days and will include an opportunity to contact the relevant manufacturer to discuss any discrepancies you believe exist in that report. As a result of advocacy by the ACC, AMA and others, there will also be an additional 15 days available for dispute resolution following the 45-day review period. In the event that there is a discrepancy in your report, this allows additional time for the resolution of that dispute beyond the 45-day review period. The College encourages you not to wait until the 15-day dispute resolution period to contact the relevant manufacturer to facilitate correction of any errors.
In addition to the 60 days allotted for review and dispute resolution, you can dispute a reported event for up to two years following the publication of the event.
The College will continue to urge manufacturers to make this information available to physicians and teaching hospitals throughout the year, rather than waiting until the formal review period.
What do I need to do as a covered physician or teaching hospital?
While the reporting burden is on the applicable manufacturers and GPOs, it will be important for covered physicians and teaching hospitals to review their reports during the review period for accuracy. To do this, physicians and teaching hospitals will need to develop a mechanism for tracking any payments or transfers of value from applicable manufacturers throughout the year, including documentation to be used in the event of a dispute. The ACC encourages physicians and teaching hospitals to request ongoing notification of reportable events from applicable manufacturers and GPOs. The College will continue to urge manufacturers to make this information available to physicians and teaching hospitals throughout the year, rather than waiting until the formal review period.
How will I know when my report is available for review?
Notice of the review period will be delivered in a number of ways:
- CMS will post the information online, as well as on its various listservs
- Physicians and teaching hospitals will also be able to register with CMS to receive notice of the review process. More information will be available about the registration process as we draw closer to the review period.
- ACC will work closely with CMS to ensure that members are aware of the review and dispute resolution periods
Manufacturers are not required to provide notice of reportable events to affected physicians and teaching hospitals, but they are encouraged to do so. ACC will work with sponsors of College programs to encourage notification of covered physicians and teaching hospitals where possible.
While CMS declined to implement ACC’s recommendation that notices be distributed directly to each affected physician and teaching hospital, the ACC will continue to work with the AMA and other physician organizations to encourage applicable manufacturers and GPOs to contact the subjects of their reports directly to notify them of the review period. The College will also continue to urge manufacturers and GPOs to provide physicians and teaching hospitals with the opportunity to review reportable information before it is submitted to CMS.
What happens if there is a dispute regarding information in the report and we cannot resolve it before the deadline?
In the event of an unresolved dispute, CMS will publish the information as reported and note that it is disputed. The information will stand as is until the next publication date.
Will I have the opportunity to explain or provide context for the reported event as part of the database?
At this time, there is no opportunity for physicians or teaching hospitals to provide additional information about a particular reported event, other than to file a dispute. The ACC will continue pressing CMS to allow you the opportunity to provide additional information as you see appropriate.
Will I face any penalties for being listed in the database or for any gaps or errors in the database about me?
The purpose of the database is to increase transparency in the relationships between physicians, teaching hospitals and applicable manufacturers and GPOs. The ACC recognizes the value of these relationships and has strongly encouraged CMS to provide context on the forthcoming website that similarly recognizes that value, providing an explanation to the public as to how those relationships benefit patient care and are necessary to improving clinical science.
Covered physicians and teaching hospitals are not subject to any penalties for being included in the database or for potentially erroneous information reported in the database about you. Because the reporting burden here is on applicable manufacturers, no liability is placed on the covered physicians and teaching hospitals for problems with the data.
That said, it is possible that the data in the database could be used to identify potentially problematic relationships, such as those in violation of the federal anti-kickback statute (AKS). For more information about the AKS and other federal fraud and abuse laws, visit CardioSource.
My state already has a law requiring the reporting of relationships between physicians and manufacturers. How does the federal Sunshine Act affect my state law?
The federal law generally preempts any state laws requiring the disclosure of the same type of information. However, the state may continue to require data submission for purposes of protecting the public health or state oversight. Additionally, if your state requires reporting of relationships between manufacturers and clinicians other than physicians, those will continue to be reported because those relationships are not the subject of this law. Similarly, state laws that define applicable manufacturers more broadly would still require the reporting of those relationships that are not covered by the federal law to the state.
I am the Governor for an ACC Chapter. Where can I find information about how this will affect my Chapter?
Information on the implications for ACC Chapters will be provided through the Board of Governors and ACC’s Chapter Affairs staff after consultation with ACC’s counsel.
*The information provided here is for educational purposes only and does not constitute legal advice. If you have any questions regarding the specific application of the Physician Payments Sunshine Act to you or to your organization, the ACC encourages you to consult an attorney.
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