Affordable Care Act “Sunshine” Rule Increases Transparency In Healthcare

Daniel A. Nicholas

On February 12, 2013, the Center for Medicare & Medicare Services (“CMS”) announced a final rule that will increase public awareness of financial relationships between drug and device manufacturers and certain health care providers.  The rule is called the National Physician Payment Transparency Program: Open Payments.”  This is one of many steps in the Affordable Care Act designed to create greater transparency in the health care market.

According to CMS, a patient should know when a doctor has a financial relationship with companies that manufacture or supply the medicines or medical devices that the patient may need.  Disclosure of these relationships will a patient to have more informed discussions with their doctors.

This rule finalizes the provisions that require manufacturers of drugs, devices, biological, and medical supplies covered by Medicare, Medicaid, or the Children’s Health Insurance Program (“CHIP”) to report payments or other transfer of value they make to physicians and teaching hospitals to CMS.  In turn, CMS will post that data to a public website.  The final rule also requires manufacturers and group purchasing organizations (“GPOs”) to disclose to CMS physician ownership or investment interests.

According to CMS, the goal of this disclosure is to increase transparency to help reduce the potential for conflicts of interest that physicians or teaching hospitals could face as a result of their relationships with manufacturers.  The new reporting will apply to applicable manufacturers and GPOs.  These organizations, along with physicians and teaching hospitals, will have an opportunity to review and correct reported information prior to its publication by website and otherwise.

This Nicholas & Bell Practice Update is solely intended to inform the business community, the healthcare industry, and clients, both existing and potential, of legal developments, including recent decisions of various courts and administrative entities.  Nothing contained herein, shall be deemed or construed as legal advice or a legal opinion, and readers should not act upon the information contained in this Practice Update without seeking the advice of legal counsel.  Prior results do not guarantee a similar outcome.