A little-discussed provision of the Affordable Care Act is making physicians, hospitals and manufacturers in the health care industry reconsider how they do business. The Physician Payment Sunshine Act requires certain drug, medical device and biological manufacturers to disclose to the Centers for Medicare & Medicaid Services (CMS) any payments or other transfers of value to physicians and teaching hospitals, as well as certain ownership interests. This information will be published on CMS’ open payments website for the public to review.
The focus of the Physician Payment Sunshine Act is on transparency. CMS calls its “Open Payments” program a national resource for beneficiaries, consumers and providers to better understand the relationships between those in the health care industry. CMS expects that better transparency will also help physicians and teaching hospitals avoid conflicts of interest that could compromise clinical integrity and patient care.
Tracking for reporting purposes began on August 1, 2013, and the first reports are due on March 31, 2014. Failure to report required information or to report properly can result in penalties of up to over $1 million dollars.
What can the public expect to see when the final reports are made available on September 30, 2014? Cash, stock, ownership interests and profits given to physicians for travel expenses, consulting fees and gifts are some of the items required to be reported. The law also covers payments given for entertainment, food, research and charitable contributions. For example, if a physician receives meals and travel in association with consulting fees, these payments must be reported to CMS and separated for the public to review each category. CMS will make no recommendations as to whether these payments or transfers actually constitute a conflict of interest for a physician.
The Physician Payment Sunshine Act does not restrict any payments or transfers, but manufacturers are concerned that time-honored practices in working with physicians may inadvertently appear to be improper. In addition, although physicians are not required to report directly, they also have taken notice and may be talking with their patients about reportable payments and transfers. Accurate reporting will be critical to ensuring compliance so that the public will have clear information.
While it is too early to determine if the law will have any impact on consumer behavior, the Physician Payment Sunshine Act is raising the level of awareness for physicians, hospitals and other important business partners covered under the law. As with other aspects of the health care reform environment, it will be important to watch and see how this unfolds.