Important dates and deadlines are fast approaching for implementation of the Physician Payment Sunshine Act (PPSA).
The law, passed by Congress as part of the Affordable Care Act, is landmark legislation that seeks to enhance transparency of financial interactions between certain manufacturers and physicians and teaching hospitals.
The law requires applicable manufacturers of drugs, devices, biologicals, or medical supplies covered under Medicare, Medicaid, or the Children’s Health Insurance Programs (CHIP)—as well as applicable group purchasing organizations (GPOs)—to report annually to the secretary of the Department of Health and Human Services certain payments or other transfers of value made to physicians and teaching hospitals.
Applicable manufacturers and GPOs are subject to civil monetary penalties ranging from $1,000 to $1 million if they fail to comply with the reporting requirements of the statute.
Beginning August 1 and continuing for the rest of the year, manufacturers will be required to collect and track transfers of payment and ownership information. On March 31, 2014, manufacturers and GPOs must report the data to the Centers for Medicare and Medicaid Services (CMS) for 2013.
Beginning in August 2014, CMS must provide physicians with consolidated reports of all manufacturers’ and GPOs’ reports for the prior calendar year in which they are named. Physicians may access these reports through a Web site portal maintained by CMS and will have 45 days to review the report and, if necessary, initiate disputes with the applicable manufacturer or GPO.
If a challenged payment is not resolved within 15 days of initiating a dispute, CMS will publish the payment, flagging it as “disputed.” Failure to challenge an alleged mistaken payment within this time frame will result in CMS’s acceptance of the payment as accurate.
Beginning September 30, 2014, CMS will publish the reported data on its public Open Payments Web site at go.cms.gov/openpayments.
Q and A on the Sunshine Act
Here are some answers to important questions about the PPSA: Who must submit reports?Manufacturers of drugs, devices, biologicals, and other medical supplies covered under Medicare, Medicaid, or CHIP that operate in the United States. Manufacturers and GPOs must report ownership interests held by physicians and their close family members.
Who gets reported on?“Covered recipients,” which CMS defines as physicians and teaching hospitals.
What payments or transfers of value trigger reporting? Any direct payments or transfers of value to physicians and/or teaching hospitals of $10 or more.
Indirect payments or transfers of value that a third party indicates are intended to be passed through to a physician.
Indirect payments or transfers of value when manufacturers make a payment to a third party, such as a physician organization, and then require, instruct, or direct the payment or transfer of value to be a provided to a specific physician or intended generally for physicians (in the latter case without regard as to whether specific physicians are identified in advance).
What information must be reported?For each payment or transfer of value, applicable manufacturers and/or applicable GPOs must report the covered recipient’s name and address; the covered recipient’s specialty, NPI, and state license and number; amount of payment; date of payment; form of payment; nature of payment; name of the drug, device, biological, or medical supply associated with payment; national drug code, if possible; as well as the context of each transaction.
For each ownership and investment interest, applicable manufacturers and/or applicable GPOs must report the covered recipient’s name, address, specialty, NPI, and state license and number; dollar amount, value, and terms of ownership or investment interest; whether payment is held by an immediate family member of the physician; any payments or other transfers of value made to the physician owner or investor.
For each payment related to research, applicable manufacturers and/or applicable GPOs must report the name of the institution receiving the payments and the principal investigators.
What is excluded from reporting?Certified and accredited CME.
Buffet meals, snacks, soft drinks, or coffee generally available to all participants of large-scale events.
Product samples that are not intended for sale and are intended for patient use.
Educational materials that directly benefit patients or are intended for patient use (excludes textbooks).
In-kind items used for the provision of charity care.
A dividend or other profit distribution from, or ownership or investment interest in, a publicly traded security and mutual fund.
Discounts (including rebates).
A transfer of anything of value to a physician when the physician is a patient and not acting in his/her professional capacity as a physician.
The loan of a medical device for a short-term trial period, which does not exceed 90 days, to permit the evaluation of the covered device by the covered recipient.
Items or services provided under a contractual warranty, including the replacement of a covered device, where the terms of the warranty are set forth in the purchase or lease agreement for the covered device.
In the case of an applicable manufacturer who offers a self-insured plan, payments for the provision of health care to employees under the plan.
In the case of a physician who is a licensed nonmedical professional, a transfer of anything of value to the physician if the transfer is payment solely for the nonmedical professional services of such licensed nonmedical professional (for instance, payments to a physician who is licensed to practice law and is retained by the manufacturer to provide legal advice).
In the case of a covered recipient who is a physician, the transfer of anything of value to the covered recipient if the transfer is payment solely for the services of the physician with respect to a civil or criminal action or an administrative proceeding.
A transfer of anything for which the value is less than $10, unless the aggregate amount transferred to, requested by, or designated on behalf of the covered recipient by the manufacturer during the calendar year exceeds $100 (subject to increase each year using the consumer price index). ■
More information about the PPSA’s reporting requirements is posted on APA’s Web site at
http://www.psychiatry.org/sunshineact. APA will continue to update this site as more information about complying with the PPSA becomes available. Also, APA will hold a webinar on this subject in the fall, with an opportunity to get your PPSA questions answered by APA’s deputy director for regulatory affairs and its general counsel. The date and time will be sent to APA members in the
Psychiatric News Update. If you are not a subscriber, please send your name and e-mail address to
[email protected].