October 1st came and went with no word from the Centers for Medicare and Medicaid Services (“CMS”) regarding the long awaited Federal Physician Payments Sunshine Act (“Sunshine Act”) regulations. While many in the life sciences industry would have been shocked if CMS issued the regulations by the October 1st statutory deadline, U.S. Senators Chuck Grassley (R-Iowa) and Herb Kohl (D-Wis.) were quick to make their “severe disappointment” in CMS publicly known.  On October 3rd, Senators Grassley and Kohl, as authors and sponsors of the Sunshine Act, issued a joint letter to CMS (with Senator Grassley posting the same on his website) publicly shaming CMS for missing its deadline and pushing CMS to provide answers for its delay.

The Senators’ letter stressed the importance of providing the regulated community with guidance and adequate time to comply with the disclosure requirements of the Sunshine Act.  The letter cited the burden and increased costs that may be incurred by life science companies due to the delay in issuing the required regulations, particularly smaller companies that may be awaiting guidance before developing and implementing disclosure policies and processes.  The Senators drew attention to the seeming lack of consultation with the regulated community and consumer advocates in advance of preparing the pending Sunshine Act regulations.  Potential impacts to the general public were also raised, however, the  industry impact was their primary focus.

CMS advised the Senators on September 23rd that it had provided the proposed regulations to the Office of Management and Budget (“OMB”) for review.  Aside from harshly shaming CMS, the Senators demanded answers to the following by Friday, October 14th:

  • What is the timeline for implementing the Sunshine Act?
  • When did CMS originally send the proposed rule to the OMB?  When did CMS conduct any subsequent follow-up with OMB and for what?
  • Why did CMS fail to meet the statutory deadline?
  • What is the anticipated release date for the preliminary regulations?
  • How long will the regulations be open for comment? What is the time line for issuing final regulations?

Will the Senators’ letter shame CMS into action? Should we expect CMS to issue regulations by the end of the year? What percentage of the life sciences industry has not yet begun planning for the federal disclosure requirements?  Will CMS’ eventual issuance of regulations motivate the last industry hold outs to develop and implement procedures to comply with the Sunshine Act?  We will all eagerly await the CMS response and what action, if any, is taken by the Senators or Congress.