What Hospitals and Physicians Need to Know about CMS’s Proposed Rule Interpreting the Physician Payment Sunshine Act

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Centers for Medicare & Medicaid Services (CMS) issued on December 14, 2011 its much-anticipated proposed rule interpreting the requirements of the Physician Payment Sunshine Act (Act), enacted by Congress as Section 6002 of the Patient Protection and Affordable Care Act on March 23, 2010.  In its press release accompanying the proposed rule, CMS touted the Act and rule as fostering transparency which will discourage inappropriate financial relationships and give patients the information they need to evaluate their health care providers.  The Act requires manufacturers of drugs, devices, biological, and medical supplies covered by Medicare, Medicaid, or the Children’s Health Insurance Program (CHIP) to report to CMS any payments or other transfers of value they made to physicians and teaching hospitals during the preceding year.  The Act also requires manufacturers and group purchasing organizations (GPOs) to report certain information regarding ownership or investment interests held by a physician or immediate family member in the manufacturer or GPO during the same time frame.

The initial reports by manufacturers and GPOs to CMS are due on March 31, 2013, for the preceding year, and on the 90th day of each calendar year thereafter. The Act requires the Secretary of the Department of Health and Human Services (Secretary) to make such information available to the public on a website no later than September 30, 2013, and on June 30 of each successive calendar year.  Several states which have previously enacted similar laws drawing public attention to manufacturers’ compensation to physicians have seen a reduction in such payments.  CMS is currently soliciting comments concerning the proposed rule, which must be received no later than 5:00 p.m. Eastern Time on February 17, 2012.

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