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Healthcare Reform Adds Reporting Requirements for Vendor-Provider Relationships

The Healthcare Reform legislation includes vendor-provider reporting requirements, also known as the “sunshine law.” The law requires manufacturers of drugs, medical devices, medical supplies, and biologics to report financial arrangements with certain “covered recipients.” “Covered recipients” include physicians or teaching hospitals. The manufacturer must make the report to the U.S. Department of Health and Human Services (HHS). Then HHS must disclose the information on a public website.

The purpose of the reporting and disclosure requirements is to promote transparency of these financial arrangements. The goal is to encourage the avoidance of conflicts of interest that can compromise clinical care, biomedical research, and medical education, and potentially lead to violations of federal anti-fraud statutes.

The federal sunshine law generally preempts state sunshine laws with the exception of state laws that require disclosure of information not required under the federal legislation or excluded by the federal legislation, by any person or entity other than an applicable manufacturer or a covered recipient, or reporting of information to a Federal, State, or local government agency for public health surveillance, investigation, or other public health purpose. Manufacturers practicing in states with sunshine laws must now be attentive to both the federal and state law requirements to ensure compliance to both requirements.

The first annual report is due March 31, 2013 and then on the 90th day of each calendar year for the activity during the prior calendar year.

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