On February 1, 2013, the Centers for Medicare and Medicaid Services (“CMS”) announced the release of the final regulations implementing the Transparency Reports and Reporting of Physician Ownership or Investment Interests section of the Patient Protection and Affordable Care Act, commonly referred to as the “Sunshine Act.”  The Sunshine Act requires applicable manufacturers of covered drugs, devices, biological products, and medical supplies to report annually certain information regarding payments and other transfers of value to physicians and teaching hospitals.  An additional provision requires applicable manufacturers and group purchasing organizations (“GPOs”) to report all ownership and investment interests held by physicians or members of their families.  As set forth in the final regulations, applicable manufacturers and GPOs must begin data collection on August 1, 2013, and must file their first reports on March 31, 2014.

In addition to the final regulations, CMS maintains a list of Frequently Asked Questions (“FAQs”) on its National Physician Payment Transparency Program:  Open Payments website.  The FAQs, which include questions posed by interested parties and responses by CMS, were most recently updated on July 2, 2013.  A full list of CMS’ FAQs can be found on the National Physician Payment Transparency Program: Open Payments website at the following link:

http://www.cms.gov/Regulations-and-Guidance/Legislation/National-Physician-Payment-Transparency-Program/FAQs-Subpage.html

Among others, CMS added FAQs clarifying reporting of payments to physicians for promotional speaking and reporting the value of journal reprints.  CMS states that payments for promotional speaking may be reported in the “compensation for services other than consulting” or “honorarium” nature of payment category.  In determining which nature of payment category to choose, CMS states that applicable manufacturers and GPOs “should consider the purpose and manner of the payment or other transfer of value” and may clarify assumptions made to determine the nature of payment category in the assumptions document.  CMS also clarifies that when determining the value of journal reprints, the value should reflect the cost that an applicable manufacturer or GPO “paid to acquire the reprint from the publisher or other distributor.” CMS suggests that any assumptions made in determining the value of journal reprints may be included in an assumptions document.

Additionally, CMS included an FAQ regarding the resubmission of an entire report with corrections and/or updates.  CMS states that applicable manufacturers and GPOs may “retract and resubmit an entire report, submit corrections to a group of records, retract a group of records, or append a group of records that were omitted from the original submission.”  However, CMS states that although corrections and additions can be made after the submission deadline, applicable manufacturers and GPOs may be subject to penalties for submitting data after the deadline.  CMS encourages data to be submitted early so corrections can be completed prior to the deadline.

CMS also included an FAQ clarifying that the exemption of medical residents from the reporting requirements does not include physicians in Fellowship training.  Specifically, CMS states that “payments to Fellows are not exempt from the reporting requirements.”

CMS continues to provide helpful information to the life sciences industry in preparation for data capture to begin on August 1, 2013.  In fact, CMS will be hosting a National Provider Call: OPEN PAYMENTS (Physician Payments Sunshine Act) – What You Need To Know on Thursday, August 8, 2013 at 2:30 p.m. – 4:00 p.m. EST.  This National Provider Call will include an update on program policy, with a focus on Third Party Payments and Indirect Payments.  A link to register for this call will be published on CMS’ website shortly: 

http://www.cms.gov/Regulations-and-Guidance/Legislation/National-Physician-Payment-Transparency-Program/Events.html