CMS To Publish Financial Relationships Between Physicians and Drug Manufacturers Beginning September 2014

by Dickinson Wright

Beginning in September 2014, the Centers for Medicare and Medicaid Services (“CMS”) will publish a list of all payments and transfers of value paid by drug manufacturers to physicians and teaching hospitals on a publicly accessible website, pursuant to the Physician Payments Sunshine Act (Sunshine Act). The Sunshine Act, a provision of the Affordable Care Act, is intended to create greater transparency around the financial relationships of manufacturers, physicians, and teaching hospitals.
The Sunshine Act requires companies that manufacture drugs, medical devices, and biologics to provide detailed information to CMS about any direct payments or transfers of value paid to physicians and teaching hospitals worth more than $10, with certain limited exceptions. Transfers of value include, but are not limited to, consulting fees, travel, food, entertainment, gifts, honoraria, royalties, and compensation for speaking and research. Physicians’ ownership or investment interests in any drug or device company will be reported as well. Manufacturers are required to categorize how the recipient received the payment (such as cash, in-kind items or services, stock, etc.), and must provide a reason for the payment. CMS will then post these “transparency reports” on a publicly accessible website beginning September 30, 2014.
Although physicians and hospitals aren’t required to submit these reports to CMS, physicians are subject to exposure when the reports are released to the public. There are several risks that physicians face when these reports are made public:
1. The federal government can use the reports to support an Anti-Kickback or False Claims Act claim, if it appears that there is a suspect relationship between a drug manufacturer and a physician or group of physicians.
2. The IRS may also look to these reports and compare the information to what individual physicians are reporting as income. Physicians will need to be extra diligent about keeping track of what payments they receive and reporting them as income on tax returns.
3. Private citizens could use the information in “qui tam” whistleblower lawsuits. For example, an employee with knowledge of a particular physician’s prescribing practices might develop suspicions, or have existing suspicions validated, upon seeing the amount of money a physician is receiving from a drug manufacturer.
4. A reporter can search the database and publish a damaging article about any physician who routinely prescribes a particular drug or uses a particular medical device from a manufacturer with which the physician has a financial interest.
5. A physician’s reputation can be harmed if it appears she is receiving vacations, dinners, etc. from a drug company that manufactures a drug she routinely prescribes, evidencing a treatment bias.
Physicians can minimize these risks in the following ways:
1. Understand what will be reported. The American Medical Association has published a thorough explanation of the reporting requirements, available here. If physicians understand what will be reported, they can make better decisions about whether any particular financial relationship with a drug manufacturer is worth the potential exposure.
2. Physician groups and hospitals should develop a conflict policy stating what relationships are appropriate between their physicians and drug manufacturers. The conflict policy should balance competing interests, including the benefits resulting from physician knowledge and collaboration with drug companies versus financial incentives that may lead to a treatment bias.

3. Physicians should register with CMS’s Open Payments website, here. Physicians can view their consolidated transparency report and dispute any incorrect information before it becomes public through the Open Payments website. (Physicians have additional time, cumulatively two years, to dispute reports even after the reports are made public.) Physicians can also download the Open Payments App on their cell phone, for easy access to their transparency reports.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Dickinson Wright | Attorney Advertising

Written by:

Dickinson Wright

Dickinson Wright on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.