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March 2013


Physician Payment Sunshine Act Final Rule Released


Executive Summary

On February 8, 2012, the Centers for Medicare and Medicaid Services ("CMS") published a final rule ("Rule") for what is commonly referred to as the Physician Payment Sunshine Act ("Act"), which was passed as Section 6002 of the Affordable Care Act. The Act requires certain manufacturers of medical drugs, biologicals, and devices and certain group purchasing organizations (defined in the Rule as "applicable manufacturers" and "applicable GPOs") to report to CMS payments or other transfers of value made to certain physicians and teaching hospitals (defined in the Rule as "covered recipients") and certain physician owners or investors. CMS will make these reports available for public review. The Act is part of CMS' efforts to create greater transparency between medical manufacturing companies and providers, whose relationships have historically drawn scrutiny from CMS and other governmental agencies. The Rule requires applicable manufacturers and applicable GPOs to gather reportable data beginning on August 1, 2013 and submit their first reports on March 31, 2014. CMS will release the data publicly by September 30, 2014.

The Rule finalizes a number of key definitions and other provisions, including who must submit the required reports to CMS, what data must be submitted in the reports, what the process is for submission and review, how affected parties can dispute submissions, how the public can access the reports, and what the penalties are for failing to submit the reports.

This e-Alert provides an in-depth analysis of these key provisions in the Rule and their practical effect on affected manufacturers, GPOs, and providers.

Interpretation and Clarification of Key Definitions


Compound Authorizations Permitted



Limitations to Definition of Applicable Manufacturer



Definition Includes Entities under Common Ownership


Applicable GPOs


Covered Drug, Device, Biological or Medical Supply


Covered Recipients


Payment or Other Transfers of Value


Ownership or Investment Interest

Payment and Other Transfer of Value Report Content Reports


High Level Outline of Report Content


Reportable Categories



Charitable Contributions



Food and Beverage





Exceptions to Reporting Obligations



Payments of Less Than $10



Discounts, Rebates, and Samples



Transfers of Value through a Third Party

Reports of Physician Ownership and Investments

Report Submission Process

Review and Corrections Process

Public Availability

Record Retention and Audits



Practical Effects


Applicable Manufacturers and GPOs


Covered Recipients and Physician Owners or Investors

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