On August 1, 2013 the Physician Payments Sunshine Act (also known as the Sunshine Act) was put into effect.  This act – a small but important part of the Affordable Care Act – requires pharmaceutical and medical device companies to track and publicly record payments to physicians and teaching hospitals. The Sunshine Act received its name since its goal is to shed light on the financial relationships that occur between physicians and the pharmaceutical industry.

The key players in the Act are Manufacturing and Group Purchasing Organizations (GPOs), physicians (including all doctors of medicine, osteopathy, dentistry, podiatry, optometry, and chiropractic), and teaching hospitals, defined as any institution receiving direct or indirect payments from Medicare for graduate medical education.

There are three types of transfers that will be reported and tracked by the Sunshine Act.

1.   Any general payments must be reported. Manufacturers producing even one drug, device, biologic agent or medical supply for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program must declare “transfer of value” to physicians and teaching hospitals related to all their products.

2.   Ownership must be recognized. This means that medical device and pharmaceutical companies as well as GPOs are required to disclose to the Centers for Medicare and Medicaid Services (CMS) annually any ownership or investment interests held in such entities by physicians or their immediate family members.

3.   All investment interests need to be identified. There is a required reporting of payments or transfer of value worth at least $10.00 USD, and transactions of less than $10.00 USD if they total $100.00 USD or more in a given calendar year. The types of items that must be reported include prospective ownership or investment interests; grants; compensation for CME events; cash or a cash equivalent; in-kind items or services, stocks; consulting fees; honoraria; gifts; entertainment; and food.

Advocates of the Sunshine Act argue that the public – patients in particular – have the right to know when their doctors are paid by drug and/or device manufacturers (which may potentially influence doctors to push their products). The Sunshine Act therefore seeks to provide objective information on the types of financial relationships that exist between manufactures or GPOs and physicians or health care institutions. Ultimately, the Act should provide health care consumers with data transparency so that they are able to make better and more informed decisions when choosing physicians and/or when prescribed a specific medication or treatment.

References

1.   Agrawal S.et al. The Sunshine Act – Effects on Physicians. N Eng J Med 2013;368:2054-57

2.   Campell EG et al. A national survey of physician-industry relationships. N Eng J Med 2007;356:1742-50

3.   The American Medical Association Website.  Available at http://www.ama-assn.org/ama/pub/advocacy/topics/sunshine-act-and-physician-financial-transparency-reports.page    Acessed october 16th 2013.

Rachel Levihaiem