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T H E P H Y S I C I A N P A Y M E N T S Sunshine Act, which became operational August 1, 2013, is intended to ra ise public awareness of the financial relationships between medical device and pharma- ceutical companies and doctors and teaching hospitals. The rule requires manufacturers and group purchasing organizations (GPOs) to disclose to the Centers for Medicare & Medicaid Services (CMS) whether any physicians have investment or ownership interests, as well as any payments they may have received as a result of ownership or investment interests. This information will be posted on a public website. T h e A c t w i l l b e a d m i n i s t e r e d under a program known as the OPEN PAYMENTS. This program imposes three primary reporting requirements: Applicable ma nu fact u rers must annually report all payments and other transfers of value (TOV) to physicians and teaching hospitals; Applicable manufacturers and GPOs must report ownership or investment interests held by physicians or their immediate family members; GPOs must report payments and other transfers of value made to physi- cian owners or investors if they held ow nership or investment interests during a reporting year. Reporting from 2013 extends from August 1 through December 31. Data collected for this reporting period must be submitted to CMS by March 31, 2014, and will be published on the website by September 30, 2014. Physicians should be aware that the statute requires reporting both the form of the payment and the nature of the payment. Categories of for m include: cash or its equivalent, in-kind items or services, stock, stock options, interest, dividends, profits or other returns on investment. Categories of nat ure include, but are not limited to: consulting fees, spea k ing fees, honoraria, gifts, entertainment, food, travel, education payments, research payments, charitable contributions, space rental or facility fees, and royal- ties and license fees. The statute defines ownership or investment interests as well, including vehicles that are direct, indirect and through debt, equity or other means. These interests include, but are not limited to – stock, stock options, partner- ship shares, limited liability company memberships, loans, bonds or other financial instruments that are secured with an entity's property or revenue or a portion of that property or revenue. Are the reporting entities prepared? G ener a l con s en s u s i s t h at m a ny manufacturers are not prepared, and therefore not able to meet their compli- ance obligations. Manufacturers are advised that this is not a mere book- keeping exercise, but rather these compliance activities should be inte- grated into a broader corporate integrity and financial relationship management program. Compliance for makers of drugs, devices, and biologicals is criti- cal because Sunshine Act data could trigger scrutiny from regulators and law enforcement. Civil Monetary Penalties (CMP) can be imposed for failure to report the required information in accordance with the regulations. The penalties under the CMP are at least $1,000 but no more than $10,000 for each payment or other TOV, or owner- ship or investment interest not reported as required. The maximum total CMP with respect to each annual submission for failure to report is $150,000. For knowing failure, the minimum will be at least $10,000, but no more than $100,000 and the maximum CMP with respect to a knowing failure to report is $1,000,000. What effect will this Act have on the examination of conf licts of interest involving physicians? David Schweighoefer is Partner, Health Care practice group, Brouse McDowell in Akron. ■ Physician Conflicts of Interest and Sunshine Act By David E. Schweighoefer, Esq. the 3 4 | Cleveland/Akron/Canton MD NEWS ■ M D N E W S . CO M ■ M A R C H /A P R I L 2 0 1 4