Physician Payments Sunshine Act: A Friend or Foe?

April 27, 2017 | Prasad Gunesakaran, MD

The Physician Payments Sunshine Act, also referred to as the Open Payments Program, aims to enhance transparency of financial interactions between the pharmaceutical/device manufacturing industry and physicians. It requires public release of all financial transactions between covered recipients and manufacturers and those between covered recipients and group purchasing organizations (GPO). Transactions between manufacturers and GPOs don't need to be disclosed unless the owner of the GPO is a physician, which triggers the physician requirements. Immediate relatives are an extensive list comprised of spouses, parents, children, siblings, grandparents, grandchildren, step-parents, step-children, in-laws and spouses of grandparents. The driving force for this initiative is to identify conflicts of interest (COI), prevent unscrupulous consequences on patient care & research and subsequently negate public apprehension regarding physician-industry transactions and its potential to influence ethical and appropriate delivery of patient care.

GPOs and other applicable manufacturers are mandated to report all forms of financial transactions above $10[1], ownership or investment interests of individual physicians, their immediate relatives or teaching hospitals to the Centers for Medicare and Medicaid Services (CMS) which then releases a public database on an annual basis. These include direct payments to physicians and teaching hospitals and indirect payments via medical societies or other intermediaries. Covered recipients are allowed a period of 45 days (with an additional 15 dispute resolution days) to review and dispute inaccurate transactions before publication on the CMS website. Payments are categorized into: Consulting fees, compensation for serving as faculty/speakers, honoraria, gifts, entertainment, food & beverage, travel & lodging, education/research grants, charitable contributions, royalty/license, current or prospective ownership or investment interest or space rental fees. Intuitively, improving transparency in the relationship between physicians and the industry appears beneficial. However, the medical community has been skeptical of the effectiveness and the resultant effects of public reporting of financial relationships with the industry.

Advantages of the Sunshine Act/Open Payments

  • Enhanced transparency: the public is completely aware of the type and degree of their physician and health care institution's financial relationship with the industry and can accordingly make an informed decision while choosing their doctor and the institution of healthcare delivery
  • Prior knowledge of physicians' financial relationships and an open discussion regarding these details can potentially strengthen the confidence of patients in their physicians and their treatment decisions
  • Physicians can use this resource as a tracking tool for ascertaining the extent of public knowledge on their financial relationships and equip themselves for answering legitimate concerns raised by patients
  • Provides physicians with the option of disputing erroneous claims before it becomes public knowledge
  • Serves as a free data resource for researchers to identify trends in resource utilization, identify reckless resource consumption and better understand the relationship between physicians, the industry and other beneficiaries both on a state, regional and national level
  • Inculcates diligence among physicians to avoid potential conflict of interest while interacting with the industry and preserves the best interests of our patients

Pitfalls of the Sunshine Act/Open Payments

  • Mere association does not imply derangement in physician judgement and ethics: Public reporting could alter public perception and introduce a negative bias on the positive, symbiotic relationship between physicians and the industry. Numerous medical innovations have emanated from a constructive and ethical collaboration. Misconception of this relationship could potentially perturb ingenuity

  • Erroneous financial disclosures that are not resolved within 60 days will still appear on the public database with a note indicating a dispute. Disputing transactions consumes time and amplifies the pre-existent time constraints of physicians

  • Scrutineer groups such as "ProPublica – Doctors for Dollars" have created a database from the CMS data and inaccuracies resulting from improper reporting or data entry could defame physicians and may even serve as triggers for lawsuits
  • Data from Open Payments fails to demarcate benign relationships from potential conflicts of interest
  • Limiting interactions of the industry with physicians could restrict flow of scientific information to busy clinicians outside the realm of academic institutions. Data presented at industry sponsored events are subject to rigorous scientific peer review before publication in journals. Interpretation of study results and clinical trial standards are subject to surveillance by independent data safety monitoring boards. Speakers are mandated to disclose all financial disclosures during industry sponsored presentations
  • Under-reporting by GPOs and applicable manufacturers could conceal important financial relationships. The extent of penalties resulting from failure to report remains unclear

Public reporting of financial relationships between physicians, teaching hospitals and the industry is a good first step towards transparency. However, it also has the potential to negatively affect public perception about physicians and teaching hospitals. Augmenting transparency by public reporting without addressing the root causes can lead to public mistrust. Physicians are held to high ethical standards. Errors in reporting and subsequent misinterpretation by public could seriously undermine the reputation and morale of physicians and teaching hospitals. It may well take many years to accurately determine the effect of public reporting on physician practice patterns. In the interim, exercising due diligence while interacting with the industry is of paramount importance to preserve the interests of our patients.

[1] This is the amount for 2013. The regulation indexed this to the Consumer Price Index for Urban Consumers (CPI-U), so it should change annually to reflect inflation. Also, transactions under the threshold need to be reported if the manufacturer or GPO engages in sufficient number of transactions with the covered physician such that the sum total of the transactions is greater than a set threshold ($100 for 2013, also indexed to the CPI-U).

This article was authored by Prasad Gunasekaran, MD, a fellow in training (FIT) at the University of Kansas.