On December 14, the Centers for Medicare and Medicaid Services (CMS) published its long-awaited proposed rule, “Transparency Reports and Reporting of Physician Ownership or Investment Interests.” The proposed rule will implement Section 6002 of the Patient Protection and Affordable Care Act (ACA), popularly known as the U.S. Sunshine Act. It largely mirrors the ACA statutory provisions but also provides significant clarification and potential expansion of the scope of the provisions. The proposed rule was published in the December 19 edition of the Federal Register.

The sky is not falling, but it is necessary for all companies and institutions to promptly assess the practical implementation costs and enhancements needed for current accounting, procurement, accounts payable, and compliance policies and procedures. While waiting for the proposed rule, many life science companies have already begun implementing such transparency efforts voluntarily, both to get a jump-start on the required implementation and to otherwise comply with state marketing statutes. A few large pharma companies are subject to Department of Health and Human Services (HHS) Office of Inspector General (OIG) Corporate Integrity Agreements (CIAs) that have transparency provisions and have already successfully implemented those provisions. CMS estimates the average cost for implementation will be approximately $170,000 annually for most companies, which may be a low estimate. The transparency provisions should be considered in context, taking into consideration all stake-holders, including healthcare professionals and institutions, and how compliance with the provisions will require changes to contracts and arrangements. These stakeholders, which include physicians, hospitals, academic medical centers, and nursing homes, have their own, additional transparency compliance requirements in ACA, and many entities are implementing their own policies to deal with transparency reporting.