Physician Payment Sunshine Act Data Collection Deferred to 2013
On May 4, 2012, the Centers for Medicare and Medicaid Services (“CMS”) announced that it will not require applicable manufacturers and group purchasing organizations (“GPOs”) to begin collecting data on relevant payments under the Physician Payment Sunshine Act (“Act” or “Sunshine Act”) until January 1, 2013. Under the Sunshine Act, data collection was set to begin January 1, 2012.
The Sunshine Act
The Sunshine Act is a provision of the 2010 Patient Protection and Affordable Care Act that requires drug, medical device, biological and medical supply manufacturers to track and report payments made to physicians and teaching hospitals. The Act also requires those manufacturers and GPOs to disclose any financial or ownership interests that physicians or their immediate family members have in with those entities.
In December 2011, CMS published proposed regulations under the Sunshine Act for comment. During the 60-day comment period, which ended this past February, CMS received over 300 comments and recommendations from virtually all sectors of the healthcare industry, including associations representing universities and teaching hospitals, physicians, pharmaceutical and biotechnology manufacturers, and companies involved in medical education. National consumer advocacy, labor, senior and women's organizations provided input as well.
Those commenting voiced concern that ambiguities in the proposed regulations need to be clarified in order to serve the Act's salutary goals and avoid undue administrative burdens. Commenters also urged CMS to more clearly identify which manufacturers were covered by the Act, provide greater guidance on the reporting responsibilities of entities under common or joint ownership and clarify the disclosure requirements for payments covered by the Act. A controversial issue concerns the reporting of payments made to physicians through third parties. Some have urged CMS to implement a broad requirement to report such payments while others have expressed concern that the proposed rule should not require reporting payments where manufacturers have no control over who receives them. Many also stressed that the reporting requirements should avoid deterring legitimate and valuable physician collaboration with applicable manufacturers.
Delay in Data Collection and its Impact
In its recent announcement, CMS indicated that in order for it to appropriately address the input received during the comment period and to allow affected organizations sufficient time to prepare for their reporting obligations, data collection for applicable manufacturers and GPOs will not be required before January 1, 2013. While it was expected that CMS would delay data collection until mid- or late 2012 at the earliest, the announcement of the 2013 date indicates that CMS recognizes the complexity of this rulemaking. CMS also announced that that it intends to release the final rule later this year.
CMS's delay in requiring data collection is a welcome announcement to those affected by the Sunshine Act. Given the impending disclosure requirements, affected companies should continue to reevaluate internal corporate guidelines for the types of payments or benefits that will soon be publicly reported. In addition, companies should make sure they have in place internal reporting systems that will capture all payments covered by the Act. Failure to comply with the Act carries a penalties ranging from $1,000 to $100,000 for each violation, up to a maximum annual fine of $1 million for companies that knowingly fail to comply.
© 2012 Perkins Coie LLP