The Sunshine Act and Your Financial Relationships


AdrienneFinal1Kathryn Hickner-CruzBy Adrienne Dresevic, Esq. and Kathryn Hickner-Cruz, Esq.

December 2013—This is a quick reminder that the Sunshine Act is in effect and physician financial relationships are being increasingly reviewed and scrutinized. Although the Sunshine Act does not directly require anything of physicians, wise radiologists will pay attention to information being shared about their financial relationships which may imply impropriety even when not actually present. 

Overarching Requirement

The Sunshine Act itself does not require radiologists (or other physicians) to maintain or report any information or to register with the Centers for Medicare & Medicaid Services (CMS). Instead, the Sunshine Act, in general, requires manufacturers of covered drugs, devices, biologicals, and medical supplies to track and report to CMS, on an annual basis, any direct or indirect payments or transfers of value to physicians or teaching hospitals.  Manufacturers and group purchasing organizations (GPOs) must also track and report the ownership and investment interests of physicians or their immediate family members.

Underlying Objectives

CMS is required to make the reported information available on a searchable website that is publically available (ie, available to the government, potential qui tam whistleblowers, competitors, patients, media, and other community members). By way of clarification, a physician’s receipt of a payment or an ownership or investment interest reported or reportable on the Sunshine Act website does not necessarily mean that the payment is impermissible or illegal. Rather, the Sunshine Act is intended to shed light on the relationships between physicians and industry to promote transparency and decrease potential conflicts of interest.

Information Reported

Payments to be reported pursuant to the Sunshine Act include consulting fees, compensation for services, honoraria, gifts, entertainment, food, travel, education, research, charitable contributions, royalty or license fees, current or prospective ownership or investment interests, compensation for serving as faculty or as a speaker for a medical education program, grants, etc.

There are numerous narrow exceptions to the broad reporting requirement, including (without limitation) each of the following: (a) certain accredited CLE events; (b) payments or transfers of value of less than $10 (unless aggregate annual amount provided to the covered recipient is greater than $100) (amounts are adjusted for inflation in accordance with the regulations); (c) buffet meals, snacks, soft drinks, or coffee generally available to all participants of large-scale conference or similar large-scale events; (d) product samples that are not intended to be sold and are intended for patient use; (e) educational materials that directly benefit patients or are intended for patient use; (f) the loan of a medical device for a short-term trial period to permit evaluation; (g) certain items or services provided under a contractual warranty; (h) discounts (including rebates); (i) in-kind items used for the provision of charity care; and (j) a dividend or other profit distribution from, or ownership or investment interest in, a publicly traded security and mutual fund.

In addition to the physician’s name, manufacturers must report (when required): (a) the Physician’s NPI; (b) primary and specialty practice; (c) primary business address; and (d) state professional license number(s). The manufacturer must also report on the nature of the payment or transfer of value, including without limitation: (a) the name of the covered item(s); (b) amount, date, form, and nature of payment or other transfer; (c) number of payments; and (d) name of entity that directly received payment (if not provided directly to recipient).

Timing and Disputes

Applicable manufacturers and GPOs must report all payments and transfers made on or after August 1, 2013 through December 31, 2013 by March 31, 2014, and on the 90th day of each successive calendar year thereafter. Beginning January 1, 2014, Physicians may register with CMS to receive notification of the opportunity to review the data before it is released publically and to designate an authorized official. CMS will notify physicians or their authorized official at least sixty days prior to the information being posted online allowing them 45 days to review and notify the manufacturer or GPO of errors. The manufacturer or GPO will then have 15 days to correct the information before publication of the disputed information occurs. In the event that a covered recipient and a reporting entity do not resolve a dispute during such period, the information will still be posted publically, but will indicate that the information is disputed. CMS will monitor disputed reports and update the information twice annually. CMS plans to publish the information online beginning September 2014.

Practical Guidance

Considering the foregoing, it is advisable for physicians to maintain records of all payments and other transfers of value received from applicable manufacturers and all ownership and investment interests that are reportable. CMS encourages physicians to work with manufacturers and GPOs to make sure that the information submitted pursuant to the Sunshine Act is correct and appropriate. Physicians may desire to request a description of such information from the manufacturers and GPOs (to confirm or dispute its accuracy) before such entities make their reports to CMS.  In the event that such pre-submission review is not possible, signing up for and carefully reviewing the available notifications described in the prior paragraph is even more important.

The Sunshine Act reflects the current trend towards increased governmental scrutiny of payments from industry to physicians and the financial relationships between such parties.  Physicians should use the implementation of the Sunshine Act as a reminder to revisit their relationships with industry and referral sources and to bolster their compliance policies and procedures.  If they haven’t already done so, physicians should also consider adopting conflict of interest policies, sale representative visitation policies and mechanisms to collect Sunshine Act data.  Before accepting any payment or other transfer of value from a manufacturer or other industry member, Physicians should be prepared to defend such receipt in a public forum.


Adrienne Dresevic, Esq. graduated Magna Cum Laude from Wayne State University Law School. Practicing healthcare law, she concentrates in Stark and fraud/abuse, representing various diagnostic imaging providers, eg, IDTFs, mobile leasing entities, and radiology and multi-specialty group practices.

Kathryn Hickner-Cruz, Esq. graduated Magna Cum Laude from Wayne State University Law School.  She specializes in health care transactional matters and compliance with federal and state health care regulations. 

The authors are members of The Health Law Partners, P.C. and may be reached at (248) 996-8510 or (212) 734-0128, or at www.thehlp.com.

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