What Is The Physician Payments Sunshine Act?

The Physician Payments Sunshine Act (PPSA) was introduced in the United States Congress on September 6th, 2007 by Senators Charles Grassley (R-IA) and Herb Kohl (D-WI). The goal of the bill was to “shed light” on the nature and extent of financial relationships between physicians and teaching hospitals and the applicable manufacturers and group purchasing organizations (GPOs) they interact with. The expectations were that the bill would reveal the potential overall effect that these relationships have on patient care and rising healthcare costs. Failing initially as an independent bill, the PPSA was finally signed into law as section 6002 of the Patient Protection and Affordable Care Act (ACA) of 2010.

The Sunshine Act requires that the manufacturers of drugs, medical devices, and biologics track and report any payments or other transfers of value made to physicians or teaching hospitals. This call for transparency within the physician-industry relationship is predicated on the idea that the requirement of industry to track, report, and publicly release financial data will encourage stronger ethical collaborations that will ultimately help to achieve better patient care while lowering health insurance costs for covered recipients.

the Physician Payments Sunshine Act (PPSA) was not designed to call into question the interactions between physicians and industry, but to ensure that these interactions are transparent and accessible to the public, and the Centers for Medicaid and Medicare Services (CMS) achieves this mandate through its Open Payments program.


Financial Relationships

One could argue that virtually all physicians have some type of financial relationship with applicable manufactures or GPOs. Eric G. Campbell, Ph.D. explains that “at the simplest level, such a relationship exists whenever a physician accepts anything from a company whose products or services are related to the practice of medicine.” On a real-world level, the physician-industry relationship includes an array of possible opportunities for financial payments or other transfers of value to take place, including the following:

  • consulting fees
  • compensation for services other than consulting
  • honoraria
  • gifts
  • entertainment
  • food and beverage
  • travel and lodging
  • education
  • research
  • charitable contributions
  • royalties or licensing
  • ownership or investment interests
  • compensation for serving as faculty or as a speaker
  • grants
  • space rental or facility fees

The financial relationship between physician and industry is an important one—one that helps to drive innovation, promote physician education, and advance clinical research that is essential to discovering medical treatments and improving patient care and outcomes; however, this relationship also poses possible conflicts of interest by affecting prescribing behavior, perhaps, or by influencing a physician’s professional judgment because of possible financial gain. In addition, some point out that the cost of dinners, trips, and other incentives in the financial relationship are passed along to patients through increased drug prices or higher healthcare costs overall. Nevertheless, the Physician Payments Sunshine Act (PPSA) was not designed to call into question the interactions between physicians and industry, but to ensure that these interactions are transparent and accessible to the public, and the Centers for Medicaid and Medicare Services (CMS) achieves this mandate through its Open Payments program.

The purpose of the Physician Payments Sunshine Act (PPSA) is to increase transparency and to provide a meaningful, accurate picture of physician-industry interactions.


Open Payments

Open Payments is a national disclosure program designed to collect and display industry-reported financial data in three steps. First, applicable manufacturers and GPOs submit payment data for each full calendar year, January-December (initial reporting began August 1st - December 31st, 2013). Second, physicians and teaching hospitals have forty-five days to review and dispute errors, if necessary, and the applicable manufactures and GPOs can then review and make any corrections before public release. Physicians can download a free mobile app designed to help them to stay current with the tracking of payments and other transfers of value that industry is reporting about them. Finally, financial data is published in June of the following calendar year on the Open Payments public website (https://openpaymentsdata.cms.gov/).

For detailed information regarding this process, visit (www.cms.gov/openpayments).

Although CMS has an impartial role in the Open Payments system, it recognizes that the program achieves the following:

  • Encourages transparency about these financial ties
  • Provides information on the nature and extent of physician and industry relationships
  • Helps to identify relationships that can both lead to the development of beneficial new technologies and wasteful healthcare spending
  • Helps to prevent inappropriate influence on research, education and clinical decision-making

In addition to teaching hospitals, the following U.S. licensed physicians are included in data reported by applicable manufacturers and GPOs through the Open Payments system: Doctors of Medicine, Osteopathy, Dental Surgery, Dentistry, Optometry, Podiatry, as well as Licensed Chiropractors.

The purpose of the Physician Payments Sunshine Act (PPSA) is to increase transparency and to provide a meaningful, accurate picture of physician-industry interactions. Although the impact of the law is still debatable regarding its impact on patient care and lowering healthcare spending, the hope is that the law will discourage the development of inappropriate physician-industry relationships while encouraging stronger ethical collaborations.


About TXCIN

North Texas Clinically Integrated Network, Inc. (dba TXCIN) is a non-profit ACO that began in late 2014. A small group of health care, independent physicians aligned to initiate clinical integration and value-based contracting. Partnering with RevelationMD and its state-of-the art information platform, TXCIN has become one of the largest, independent networks of physicians in North Texas.

References:

American Medical Association. “Sunshine Act: Physician Financial Transparency Reports.” April 21, 2016. https://www.ama-assn.org/sites/ama-assn.org/files/corp/media-browser/specialty%20group/washington/sunshine-act-brochure.pdf.

Campbell, Eric G. “Doctors and Drug Companies—Scrutinizing Influential Relationships.” New England Journal of Medicine. Nejm.org. November 1, 2007. https://www.nejm.org/doi/full/10.1056/NEJMp078141.

CMS.gov. Centers for Medicare and Medicaid Services. "Open Payments." https://www.cms.gov/openpayments/

Lazarus, Jeremy. "The Physician Payment Sunshine Act is Here: Are you ready?" kevinmd.com. April 12, 2013. https://www.kevinmd.com/blog/2013/04/physician-payment-sunshine-act-ready.html

Richardson, Elizabeth. "Health Policy Brief: The Physician Payments Sunshine Act." Health Affairs. October 2, 2014. https://www.healthaffairs.org/do/10.1377/hpb20141002.272302/full/.

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