The Physician Payment Sunshine Act: FAQs

Ryan Meade
Managing Director, Aegis Compliance & Ethics Center
May 23rd, 2013

Ryan recently presented a webinar on the Who, What, and When of the Physician Payment Sunshine Act. As a follow up, here are answers to some of the questions asked during the webinar.

Q: What constitutes “research payments”? Surely not money paid by the sponsor for labor / procedure costs? 

A: The Sunshine Act Final Rule is very broad in discussing the research payments which must be reported by the sponsor (when the sponsor is an “applicable manufacturer”). 42 CFR 403.904(f) is entitled “Special rules for research payments” and states: “All payments or other transfers of value made in connection with an activity that meets the definition of research in this section and that are subject to a written agreement, a research protocol, or both, must be reported under these special rules.” The regulation further goes on to state “Research-related payments or other transfers of value to covered recipients (either physicians or teaching hospitals), including research-related payments or other transfers of value made indirectly to a covered recipient through a third party, must be reported to CMS separately from other payments or transfers of value….” Among the data that must be reported includes “Total amount of the research payment, including all research-related costs for activities outlined in a written agreement, research protocol, or both.”

Q: Does “Research” mean clinical studies as well?

A: Yes. The definition of research in the Sunshine Act Final Rule is very broad. 42 CFR 403.902 states that “Research includes a systematic investigation designed to develop or contribute to generalizable knowledge relating broadly to public health, including behavioral and social-sciences research. This term encompasses basic and applied research and product development.”

Q: Does the rule apply to PhDs?

A: Generally, if the individual’s only clinical degree is a PhD, then he or she will not be impacted. However, it is always important to take a look at definitions in laws. The Sunshine Act Final Rule applies to a “physician.” 42 CFR 403.904 states that “Physician has the same meaning given that term in section 1861(r) of the [Social Security Act].” We then turn to the relevant section of the Social Security Act and find the following definition: 

“The term ‘physician’, when used in connection with the performance of any function or action, means (1) a doctor of medicine or osteopathy legally authorized to practice medicine and surgery by the State in which he performs such function or action (including a physician within the meaning of section 1101(a)(7)) [of the Social Security Act], (2) a doctor of dental surgery or of dental medicine who is legally authorized to practice dentistry by the State in which he performs such function and who is acting within the scope of his license when he performs such functions, (3) a doctor of podiatric medicine for the purposes of subsections (k), (m), (p)(1), and (s) of this section and sections 1814(a), 1832(a)(2)(F)(ii), and 1835 [of the Social Security Act] but only with respect to functions which he is legally authorized to perform as such by the State in which he performs them, (4) a doctor of optometry, but only for purposes of subsection (p)(1) with respect to the provision of items or services described in subsection (s) which he is legally authorized to perform as a doctor of optometry by the State in which he performs them, or (5) a chiropractor who is licensed as such by the State (or in a State which does not license chiropractors as such, is legally authorized to perform the services of a chiropractor in the jurisdiction in which he performs such services), and who meets uniform minimum standards promulgated by the Secretary, but only for the purpose of sections 1861(s)(1) and 1861(s)(2)(A) [of the Social Security Act] and only with respect to treatment by means of manual manipulation of the spine (to correct a subluxation) which he is legally authorized to perform by the State or jurisdiction in which such treatment is provided. For the purposes of section 1862(a)(4) and subject to the limitations and conditions provided in the previous sentence, such term includes a doctor of one of the arts, specified in such previous sentence, legally authorized to practice such art in the country in which the inpatient hospital services (referred to in such section 1862(a)(4)) are furnished.”

Q: Who can request the delay in publication for research payments? The physician or sponsor or both?

A: Under 42 CFR 403.910, the manufacturer requests the delay in publication. 42 CFR 403.910(d)(1) states: “An applicable manufacturer must indicate on its research report to CMS whether a payment or other transfer of value is eligible for a delay in publication.”

Q: How would an applicable manufacturer know about ownership or investment interests by ‘immediate family members’ of physicians?

A: It won’t know unless it asks all of its vendors or the physician. At this point we do not know how applicable manufacturers will undertake due diligence to identify “immediate family members” of the physicians. The two most likely ways will be (1) an across the board question the applicable manufacturers may ask its vendors or business partners (to identify if they are an immediate family member of a physician) or (2) the applicable manufacturer may require the physician to disclose to the applicable manufacturer any immediate family members who may have an ownership or investment interest. There may be other innovative ways which develop. This should be watched closely to see how the manufacturers handle this aspect of the Sunshine Act Final Rule.


Compliance and Regulatory

1 Comment

One thought on “The Physician Payment Sunshine Act: FAQs

  1. Regarding the question above,as to whether or not the rule applies to PhDs–while PhDs aren’t ‘covered recipients,’ it seems the way the rule is worded, their names will appear on the CMS website when they are principal investigators on research payments. Agree or disagree?

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