Affordable Care Act "Sunshine" Rule: CMS Issues Final Rule

February 5, 2013

On February 1, the Centers for Medicaid & Medicare Services (CMS) announced a final rule implementing Section 6002 of the Affordable Care Act (the “National Physician Payment Transparency Program: Open Payments”). The final rule, commonly called the “Sunshine” rule, will make information publicly available about payments or other transfers of value from applicable manufacturers to physicians and teaching hospitals (“covered recipients”), and about physician (or immediate family members of a physician) ownership or investment interests in applicable manufacturers and group purchasing organizations (GPOs).

Under this rule, applicable manufacturers must report annually to the U.S. Department of Health and Human Services (HHS) Secretary all payments or transfers of value (including gifts, consulting fees, research activities, speaking fees, meals, and travel) from applicable manufacturers to covered recipients. Applicable manufacturers and GPOs must also report ownership and investment interests held by physicians (or their immediate family members) in such entities. This reported information will be posted on a publicly available website.

Key Definitions:

  • Applicable manufacturers – entities operating in the United States that either produce or prepare at least one drug, device, biological or medical supply that is covered by Medicare, Medicaid, or CHIP, and entities under common ownership with applicable manufacturers.
  • Applicable GPOs – entities operating in the United States that purchase, arrange for, or negotiate the purchase of covered drugs, devices, biological, or medical supplies for a group of individuals or entities.
  • Teaching hospital – any hospital that receives indirect medical education, direct graduate medical education, or psychiatric hospital IME.

The law does not require applicable manufacturers or GPOs to report ownership or investment interests held by teaching hospitals.

In certain instances, research payments or other transfers of value made to a covered recipient by an applicable manufacturer under a product research or development agreement will be delayed from publication on the publicly available website. Publication will be delayed when made in connection with research on or development of a new drug, device, biological, or medical supply, or a new application of an existing drug, device, biological, or medical supply; or clinical investigations regarding a new drug, device, biological, or medical supply.

The law requires CMS to provide covered recipients at least 45 days to review and dispute information related to them. Disputes will be resolved directly between the covered recipient and the manufacturer or GPO. CMS also finalized a 15-day opportunity to resolve disputes before the information is published publicly, following the 45-day review and correction period, for those whose disputes are initiated late in the 45-day period.

Data collection began on August 1, 2013. CMS released the data publicly by September 30, 2014.

Section 6002 of the ACA preempts any State or local laws requiring reporting of the same types of information regarding payments or other transfers of value made by applicable manufacturers to covered recipients.

For additional details, please see the final rule at https://openpaymentsdata.cms.gov/.