As required by the Physician Payments Sunshine Act (“Sunshine Act”), by March 31, 2023, manufacturers of covered drugs, medical devices, biologicals and other medical supplies (“Applicable Manufacturers”), as well as applicable group purchasing organizations (“GPOs”), must report to the Centers for Medicare and Medicaid Services (“CMS”) payments made and other investment interests given in 2022 to physicians, teaching hospitals, and advanced practice providers. Following this reporting, impacted providers and teaching hospitals will have until May 15, 2023, to review reported payments and investments and to dispute any incorrect reports.
Background
The Sunshine Act, enacted as part of the Patient Protection and Affordable Care Act, is intended to promote transparency with regard to payments made by pharmaceutical and medical device manufacturers to physicians and teaching hospitals. The Sunshine Act requires that all Applicable Manufacturers and GPOs submit to CMS information related to any “payment or other transfer of value to a Covered Recipient” for the previous calendar year. Applicable Manufacturers and GPOs must also report any ownership or investment interests in the Applicable Manufacturer or GPO held by a physician or their immediate family members (e.g., a physician’s spouse, natural or adoptive parent, a child, or sibling of the physician) during the preceding year. These reporting requirements are designed to serve the broader goal of preventing inappropriate financial influence on research, education, and clinical decision-making.
Reminder: Reporting on Additional Covered Recipients and Nature of Payment Categories Began in 2022
- Covered Recipients Prior to 2021, only physicians (excluding medical residents) and teaching hospitals were included in the definition of Covered Recipients. Beginning with reports submitted in 2022, however, the definition of “Covered Recipients” was expanded to include: (i) physician assistants; (ii) nurse practitioners; (iii) clinical nurse specialists; (iv) certified registered nurse anesthetists and anesthesiologist assistants; and (v) certified nurse midwives (collectively referred to as “advanced practice providers”).
- Natures of Payment Categories CMS has identified eighteen (18) different categories, referred to as “natures of payment,” into which reportable transfers of value may fall. Beginning in 2022, the following natures of payment categories were added:
- Debt Forgiveness;
- Long Term Medical Supply or Device Loan;
- Acquisitions; and
- Compensation for Serving as Faculty or as a Speaker for a Medical Education Program.
For more details regarding the 2022 updates to the Sunshine Act reporting requirements, please access our prior alert here.
Reporting and Dispute Period
Applicable Manufacturers and GPOs must complete their reporting by the 90th day of the following calendar year—this year, March 31. Annually, on April 1, the review and dispute process begins, and lasts forty-five (45) days, until May 15 (the “Dispute Period”). During the Dispute Period, Covered Recipients may use CMS’ Open Payments system to formally dispute any information they believe is incorrect. If a Covered Recipient fails to dispute data reported in the system during the Dispute Period, the information will be published on June 30th as originally reported. If the physician or teaching hospital lodges a formal complaint within the Dispute Period and the dispute is not resolved within fifteen (15) days after the end of the Dispute Period, the disputed information will be published with a notation indicating that such information is disputed. If the dispute is resolved within the fifteen (15) days after the end of the Dispute Period and the Applicable Manufacturer or GPO corrects the submission, then the information will be correctly published. Regardless, physicians, advance practice providers, and teaching hospitals may only file a dispute with CMS but cannot provide corrections to the reported information. Disputes filed after the Dispute Period but by December 31st of the calendar year will be noted in the next data refresh.
To lodge a formal complaint, Covered Recipients should be registered on the Open Payments system by first registering in CMS’ Identify Management System (“IDM”) that confirms the Covered Recipient’s identity and then registering in the CMS Open Payments online portal to view the data that has been reported. The registration process can take weeks to complete, so it is important for providers and teaching hospitals to register as soon as possible.
Enforcement
Between October 2020 and May 2021, three enforcement actions involving both the Sunshine Act and Anti-Kickback Statute violation allegations were settled. No new enforcement actions have been settled since 2021, but Sunshine Act compliance continues to be an area poised for enforcement priority.
Practical Takeaways and Suggestions for Applicable Manufacturers and GPOs
- Track – Applicable Manufacturers and GPOs should ensure they are tracking payment and transfers of value for Covered Recipient types: physicians, physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists and anesthesiologist assistants, certified nurse-midwives and teaching hospitals. Additionally, Applicable Manufacturers should ensure that any payment or transfer of value is accurately classified and recorded in the appropriate category.
Practical Takeaways and Suggestions for Covered Recipients and Hospitals
- Registration and Verification Process – Physicians, advanced practice providers, and teaching hospitals should register with IDM to request access to the Open Payments system as soon as possible. At the link above, navigate to the drop-down box labeled “Choose Your Application” and select “Open Payments: Physician Payments Sunshine Act.” Then simply follow the instructions to complete the Open Payments registration process. Any physicians who registered in IDM and requested access to Open Payments last year do not need to register again. However, given that any account that has been inactive for the past 180 days may be locked. All Covered Recipients are encouraged to verify access to IDM and check Open Payments data as soon as possible and perhaps every one hundred eighty (180) days.
- Track – Physicians, advanced practice providers, and teaching hospitals should track all interactions with the pharmaceutical and medical device industry involving payments or transfers of value to ensure the accuracy of data reported in the Open Payments system on an annual basis.
- Dispute – If data is inaccurate, Covered Recipients should submit a dispute with CMS within the Dispute Period no later than December 31 of the year reported. Covered Recipients may also negotiate the dispute with the Applicable Manufacturers or GPOs and ensure they correct any inaccuracies by resubmitting a report to CMS.
It is possible that some Applicable Manufacturers and GPOs, in opting for a more conservative approach, will elect to submit payments and transfers of value which actually should have been excluded from reporting. To preempt unnecessary patient concerns associated with such information, physicians, advanced practice providers, and teaching hospitals should ensure these non-reportable payments are removed from the Open Payments system by filing a timely dispute. - Policy and Procedures – Hospitals should consider developing and implementing internal policies and procedures for the Sunshine Act compliance, educating medical staff on the law and requiring physicians and advanced practice providers to internally report and/or independently track payments received.
If you have any questions or would like help with a Sunshine Act compliance matter, please contact:
- Ritu Kaur Cooper at (202) 370-9584 or rcooper@hallrender.com;
- Cait Bell-Butterfield at (919) 228-2408 or cbell-butterfield@hallrender.com; or
- Your regular Hall Render attorney.
Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot give legal advice outside of an attorney-client relationship.
