The Patient Protection and Affordable Care Act Sec. 6002, once referred to as “The Sunshine Act” and now known as “Open Payments,” establishes a disclosure program on a national scale that promotes transparency of the financial relationships between the medical industry (“reporting entities”) and physicians and teaching hospitals.
Reporting entities — comprising applicable manufacturers of covered drugs, devices, biological and medical supplies, and applicable group purchasing organizations (GPOs) that participate in U.S. federal healthcare programs — are required to disclose these financial relationships on a publicly available website provided through the Centers for Medicare & Medicaid Services (CMS). In addition to enabling informed consumer decisions by the public, financial tie reporting is designed to disclose “the nature and extent of relationships, prevent inappropriate influences on research, education, and clinical decision-making, avoid conflicts of interest that can compromise clinical integrity and patient care, and minimize the risk of increased health care costs.”
Open Payments also requires manufacturers and applicable GPOs to report certain ownership or investment interests held by physicians or their immediate family members, 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. Violations by a reporting entity may carry annual civil penalties of as much as $150,000 for failure to report and $1 million for knowingly failing to report. CMS requires reporting entities to keep all records related to payments or other transfers of value for at least five years from the date that the payment or other transfers of value are posted.
For purposes of the program, a “physician” is defined as any professionals who are legally authorized by the state to practice medicine, osteopathy, dentistry, dental surgery, podiatry, optometry or chiropractic medicine. Physicians are not required to register with or send any information to Open Payments. CMS, however, encourages physicians to report their financial relationships and review the reported data about them to ensure accuracy. In order to review and, if necessary, dispute this data, physicians must first register in: (i) the CMS Enterprise Portal and (ii) the Open Payments system. Though the Sept. 10, 2014, deadline for registered physicians to dispute and have data marked incorrect has already passed and CMS has released data to the public, physicians can still initiate disputes regarding 2013 data until Dec. 31, 2014. However, the data will not be marked as disputed in the public database until 2015. The physician should consult the CMS website for further details regarding the types of payments that are reportable, data collection periods and dispute process deadlines.
Finally, physicians should be aware that compliance with Open Payments reporting requirements does not exempt them from potential liability associated with payments or other transfers of value, or ownership or investment interests under the Federal Anti-Kickback Statute, False Claims Act or similar laws.
Thomas A. Mobilia is a Senior Partner and trial attorney at Martin Clearwater & Bell LLP who has defended the firm’s hospital clients, medical practices and physicians in high-exposure cases in state and federal courts for more than 20 years.
Melanie G. Gelfand is an Associate at Martin Clearwater & Bell LLP and focuses her practice on medical malpractice defense.
- Open Payments: Creating Public Transparency into Physician Financial Relationships, Centers for Medicare and Medicaid Services (2014), https://www.cms.gov/Regulations-and-Guidance/Legislation/National-Physician-Payment-Transparency-Program/Downloads/Open-Payments-User-Guide-[July-2014].pdf.
- About Open Payments, cms.gov, (Aug. 25, 2014), https://www.cms.gov/OpenPayments/About/About.html.
- Participation in Open Payments, cms.gov, (Aug. 25, 2014), https://www.cms.gov/openpayments/.
- Anita Griner, Open Payments: A Matter of Maintaining Trust, Health Affairs Blog, (Feb. 27, 2014), http://healthaffairs.org/blog/2014/02/27/open-payments-a-matter-of-maintaining-trust/.
- Audit and Assess Penalties, cms.gov, (Aug. 25, 2014), https://www.cms.gov/OpenPayments/Program-Participants/Applicable-Manufacturers-and-GPOs/Audits-and-Penalties.html.
- Physicians, cms.gov, (Aug. 25, 2014), https://www.cms.gov/OpenPayments/Program-Participants/Physicians-and-Teaching-Hospitals/Physicians-and-Teaching-Hospitals.html.
- Bruce D. Armon & Karilynn Bayus, Sunshine Act Implementation Proceeds; CMS Re-Opens the Open Payments System, Saul Ewing LLP, (August 2014).
- How Open Payments Works (Aug. 29, 2014), https://www.cms.gov/OpenPayments/About/How-Open-Payments-Works.html.