Introduction

A new law enacted under the Patient Protection and Affordable Care Act of 2010 (“PPACA”), requires manufacturers and group purchasing organizations (“GPOs”) to report and disclose payments made to teaching hospitals and physicians as well as ownership interests held in such entities by physicians or their immediate family members (the “Sunshine Act”). This alert addresses certain aspects of the proposed rule issued by Center for Medicare and Medicaid Services (“CMS”) on December 19, 2011. CMS requests comments to be submitted by February 17, 2012.

The Sunshine Act will have implications not only for the reporting entities, but also for the teaching hospitals and physicians who receive the payments (directly or indirectly) and for physicians and immediate family members (“IFMs”) who invest in or own interests in reporting entities. Even hospitals that are not teaching hospitals under the Sunshine Act will also potentially be impacted by the new law. For example, hospital employed physicians or department chairs may be listed on the CMS public website as receiving payments, consulting fees, royalties or other benefits from a reporting entity that were known or unknown to the hospital. Physicians will also want to know what information manufacturers and GPOs are publicly reporting about them under this new law and if and how they may correct any reported information.

While the Sunshine Act requires that the first disclosure be made on March 31, 2013 in regard to the preceding calendar year 2012, due to CMS’s delay in publishing regulations, CMS proposes to finalize the regulations during the early part of calendar year 2012 and only require information from the remaining part of 2012 to be reported by the March 31, 2013 submission date.

Please see full alert below for more information.