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Ten Highlights from the Proposed Physician Payment Sunshine Act Rule

In the December 19, 2011 Federal Register, CMS published a Proposed Rule to implement the “Physician Payment Sunshine Act” portion of Patient Protection and Affordable Care Act (PPACA), or health care reform, which requires drug, medical device, biological and medical supply manufacturers to track and report payments made to physicians and teaching hospitals. The Proposed Rule clarifies several components of the Physician Payment Sunshine Act, including the following:

1. Applicable manufacturers must report the required information to CMS in an electronic format by March 31, 2013 and on the 90th day of each calendar year thereafter.

2. The Physician Payment Sunshine Act will apply to any manufacturer whose products are sold or distributed in the United States regardless of where they are manufactured.

3. Payment includes any “transfer of value” including, without limitation: consulting fees, compensation for services other than consultation, honoraria, gifts, entertainment, food, travel, education, research, charitable contributions, royalties or licenses, current or prospective ownership or investment interests, speaker fees, faculty fees, and grants.

4. When reporting “transfers of value” to physicians, the payments must be broken down into specific categories.

5. Over the counter (OTC) drugs/biologicals are excluded from the Physician Payment Sunshine Act’s reporting requirements, as are devices that do not require premarket approval by or notification to the FDA.

6. Payments through a physician group practice must be reported individually under the individual physicians’ names.

7. For purposes of the Physician Payment Sunshine Act, physician owned distributorships (PODs) are considered a Group Purchasing Organization and must comply with the reporting requirements with regard to physician investment/ownership interests and other “transfers of value.”

8. Ownership/investment interests will be defined in a manner similar to the manner in which they are defined in the Stark laws and will include investments/ownership interests of immediate family members (using the same definition as the Stark regulations, i.e., spouse, child, parent, sibling, or grandparent – including “step” and adoptive relationships).

9. A recipient physician will be given 45 days to review reported information prior to it being made available to the public.

10. Civil Monetary Penalties (CMPs) will be imposed for failure to report.

If you have questions about the Physician Payment Sunshine Act, health care reform (PPACA), Stark law, or any other fraud and abuse issues, please contact a Wachler and Associates, P.C. attorney by email or by phone at 248-544-0888.

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