Now is the time for pharmaceutical manufacturers to review their Open Payments/Sunshine Act internal compliance procedures, data collection forms and databases, and reporting and recordkeeping templates for payments and transfers of value made to healthcare providers. On August 14, 2019, the Centers for Medicare and Medicaid Services (CMS) published a Proposed Rule seeking to expand the Open Payments program, including the number and types of covered recipients and payment categories. As a result, drug manufacturers have at least two reasons to quickly conduct a comprehensive internal examination of their Open Payments program.

First, drug manufacturers may determine that there are requirements proposed by CMS that are unwieldy as a practical matter, too onerous to follow on a timely basis, or perhaps outside the bounds of the Sunshine Act as amended by the SUPPORT Act of 2018. If that is the case, companies should submit substantive comments to the CMS Docket (CMS-2019-0111-0092) noting file code CMS–1715–P, to explain the problems and suggest specific changes to the proposed rule, by September 27, 2019, or request an extension to that deadline.

Second, future compliance will be much easier if companies begin now to identify program changes that must be made by the years 2021 (for payment tracking) and 2022 (for reporting). Since compliance programs touch numerous company stakeholders, take many months to revise, and require extensive education and retraining efforts, meeting the CMS timeline will be challenging. For a detailed overview of the proposed rule, please read this recent blog by members of the Morgan Lewis litigation-healthcare practice subgroup. The regulatory changes that specifically impact the Open Payments requirements of 42 CFR Part 403 can be found at pages 40713-40716 and 40913-40915 of the 808-page Federal Register notice, 84 Fed. Reg. 40482 (Aug. 14, 2019).