The Physician Payments Sunshine Act: Little Guidance, But Many Potential Risks


The Physician Payments Sunshine Act (Sunshine Act), passed on March 23, 2010, requires all U.S. manufacturers of drugs, medical devices, biologics, and medical supplies covered under Medicare, Medicaid, or the State Children’s Health Insurance Program to report payments to physicians and teaching hospitals on an annual basis to the Department of Health and Human Services (HHS).

The information that manufacturers must disclose under the Act will bring increased scrutiny to companies’ physician compensation practices, and may even lead to government investigations of alleged violations of other federal statutes, including the Anti-Kickback statute, the False Claims Act, and the Stark Law. To date, however, the Centers for Medicare and Medicaid Services (CMS) has provided little guidance for manufacturers. CMS recently missed a statutory deadline to draft rules and regulations implementing the Act, and failed to meet a subsequent demand from the Sunshine Act’s co-sponsors, Senators Charles E. Grassley and Herb Kohl, to provide, by October 14, 2011, information about CMS’s timetable for issuing regulations and implementing the Act. These regulations are expected to instruct covered manufacturers about the procedures by which they will submit the payment information identified by the statute to HHS and by which HHS will, in turn, make that information available to the public. In the absence of regulations, companies must still be prepared to collect the data identified by the Act, even if the ultimate means by which they will submit that information to HHS is still unclear.

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