Sunshine Act (PPSA)
National Physician Payment Transparency Program: OPEN PAYMENTS
(also known as the Physician Payments Sunshine Act)
The National Physician Payment Transparency Program: OPEN PAYMENTS, also known as the Physician Payments Sunshine Act (“the Act”), is a part of the Affordable Care Act passed in March 2010. The purpose of the Act is to provide transparency of an individual physician’s relationships with industry to health care consumers.
The Act requires manufacturers of drugs, biological products, devices, or medical supplies for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program (CHIP) to report on an annual basis to the U.S. Department of Health and Human Services Center for Medicare and Medicaid Services (CMS) certain payments and transfers of value provided to physicians and teaching hospitals (“covered recipients”). The Act also requires applicable manufacturers and group purchasing organizations (GPOs) to annually report both the ownership and investment interests held by physicians or the physician’s immediate family members and the payments or transfers of value made to physician owners or investors.
The Act establishes August 1, 2013 as the date by which applicable manufacturers and applicable GPOs must begin collecting data. The first cycle of data must be reported to CMS by March 31, 2014. CMS will publish the data on a website that will be made available to the general public. The first cycle of data will be published on September 30, 2014. Covered recipients are not required to register with - or report any data to - CMS to be in compliance with the Act. However, covered recipients will be given a very limited window of opportunity to review and dispute the data reported before it is made available to the public. Therefore, CMS encourages covered recipients to register with CMS and subscribe to the listserv to receive special alerts and information updates.
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- Applicable Manufacturer – Any entity operating in the United States that is engaged in the production, preparation, propagation, compounding, or conversion of a covered drug, device, biological, or medical supply. The definition of applicable manufacturer extends to an entity under common ownership with an applicable manufacturer which provides assistance or support to an entity with respect to the production, preparation, propagation, compounding, conversion, marketing, promotion, sale or distribution of a covered drug, device, biological, or medical supply.
- Applicable Group Purchasing Organization (GPO) – Any entity which operates in the United States that purchases, arranges for or negotiates the purchase of a covered drug, device, biological, or medical supply for a group of individuals or entities, and not solely for use by the entity itself. Physician Owned Distributors (PODs) that purchase products for resale are included in the definition of GPO.
- Covered Drug/Device/Biological/Medical Supply – Any drug, biological product, device, or medical supply for which payment is available under Medicare, Medicaid, or CHIP either separately, as part of a fee schedule payment, or as part of a bundled payment rate. For a drug or a biological product, the Act covers only those drugs and biological products that, by law, require a prescription to be dispensed. For a device or medical supply, the Act only covers devices and supplies that require premarket approval by, or premarket notification to, the Food and Drug Administration.
- Covered Recipients – A physician or a teaching hospital. Physician includes doctors of medicine and osteopathy, dentists, podiatrists, optometrists and licensed chiropractors. Family members of physicians with ownership or investment interests in an applicable manufacturer or GPO are also covered recipients in the sense that the ownership or investment interest and any payment or transfer of value to the family member will be included in the report under the name of the related physician covered recipient. Physicians who are bona fide employees of the applicable manufacturer reporting the payment are not considered covered recipients.
- Payment or other Transfer of Value – Includes compensation and/or the transfer of anything of value to a covered recipient. All payments or transfers of value given to a covered recipient, regardless of whether the covered recipient specifically requested the payment or transfer of value, are covered under the Act. The Act requires all payments or transfers of value to an individual or entity at the request of or designated on behalf of a covered recipient to be reported under the name of the covered recipient.
- Ownership or Investment Interest – Direct or indirect ownership or financial interest in an applicable manufacturer or GPO, including debt, equity, stock, stock options, partnership shares, limited liability company memberships, loans, bonds, or other financial instruments that are secured with property or revenue or a portion of property or revenue. Ownership or investment interest does not include an ownership or investment interest in a publicly traded security or mutual fund, unexercised stock options received as compensation, unconverted convertible securities, or an interest in a retirement plan offered by an applicable manufacturer or applicable GPO to a physician or physician’s immediate family member as a result of the physician’s employment with an applicable manufacturer or applicable GPO.
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Disclaimer: The information presented above was current at the time it was published on the website. Medicare, Medicaid, and CHIP legislation and enforcement policies change frequently. It is always a good idea to check with your compliance department and/or legal counsel on legislation that impacts your medical practice.
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