Proposed Changes to Sunshine Act

The Centers for Medicare & Medicaid (CMS) is proposing rule changes to streamline the implementation of the Sunshine Act.

Section 6002 of the Affordable Care Act (a.k.a. “Sunshine Act” or “Open Payment Rules”) imposes new reporting requirements on financial relationships between medical and pharmaceutical makers and physicians and teaching hospitals. The Sunshine Act would require drug, device, biological, and medical supply manufacturers to annually report to the Secretary of Health and Human Services a list of payments or other transfers of value made by manufacturers to physicians, dentists and teaching hospitals. The act further requires applicable manufacturers and applicable group purchasing organizations (GPOs) to report certain ownership or investment interests held by physicians or their immediate family members, and payments or other transfers of value made to physician owners or investors if they held ownership or an investment interest at any point during the reporting year.

CMS recently proposed changes to the program and is soliciting public input on the proposal.  These changes consist of removing the definition of a “covered device,” at § 403.902, as CMS considers it “duplicative of the definition of ‘covered drug, device, biological or medical supply’ which is already defined in regulation.”  Second, CMS is proposing to remove the continuing education exclusion at § 403.904(g), which exempts payments for speakers at medical education events when an applicable manufacturer conditions its financial sponsorship of a continuing education event on the participation of particular covered recipients, or pays a covered recipient directly for speaking at such an event.

Third, the new rules would revise § 403.904(c)(8) to mandate reporting of the marketed name of the related covered and non-covered drugs, devices, biologicals, or medical supplies, unless the payment or other transfer of value is not related to a particular covered or non-covered drug, device, biological or medical supply. Finally, CMS would revise § 403.904(d) to require reporting of stocks, stock options or any other ownership interest as distinct categories by applicable manufacturing.

The proposed changes can be found at 79 FR 40383 and comments on the proposed rule are due no later than 5 p.m. September 2, 2014.

If you have questions about Medicare participation, the Sunshine Act, or have other legal needs, please contact us.