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Cover Focus | Jul/Aug '14

A Cloudy Time for the Sunshine Act

Over the past decade, efforts to increase physician-industry financial transparency have increased. Concerns over these financial relationships stem from the fear that certain payments will improperly influence a doctor’s clinical decision-making and that a physician’s choice of medical products will be based on the potential for profit instead of clinical appropriateness. This logic has prompted the creation of transparency laws dating back to the Drug Company Gift and Disclosure Act of 2004. While that law was never successfully enacted, the Physician Payments Sunshine Act, or the Sunshine Act, was authorized as part of the Patient Protection and Affordable Care Act of 2010 (PPACA, also known as the Affordable Care Act or ACA). The Sunshine Act regulates the reporting of payments from manufacturers of drugs, devices, and other medical supplies to physicians and teaching hospitals.


The first period for collecting financial disclosure data began on August 1, 2013, and ended on December 31, 2013. Those data were submitted to the Centers for Medicare & Medicaid Services (CMS) before March 31, 2014. CMS is supposed to publish a report of the data by September 30, 2014, via a portal they have dubbed the Open Payments system. However, prior to the publication of these data, applicable manufacturers, group purchasing organizations, physicians, and teaching hospitals were to be given at least 45 days to review the information for accuracy and to dispute and/or correct any information if needed.


Although the Open Payments portal went live at the end of July, it has been plagued with burdensome and glitchy IT issues. To start, physicians must register twice, in both the CMS Enterprise Portal and in the Open Payments system. Some physicians have reported the latter part of the process taking 30 minutes to 2 hours. If the system sat idle for more than 15 minutes, it logged out and all of the entered information was lost. Some doctors complained that even successful registrations yielded a confusing error message if there were no manufacturer data related to them, and they sometimes had to wait 24 hours between registering and being allowed to review the data. Lastly, the system only initially worked with Internet Explorer 8 or higher. The site would even frequently crash for long periods of time.

These issues prompted CMS to take the site down for over a week to address them. On August 14, CMS brought the site back online and stated that doctors and teaching hospitals would have an extra 12 days to verify and dispute data about the payments. CMS also successfully remedied some of the problems with the site. For instance, now doctors have 30 minutes before they are logged off, and the system is compatible with every browser except Safari. Doctors with no matching data no longer get an error message.

However, around the same time the agency brought the site back online, CMS also announced that one-third of the records submitted for its Open Payments website were sent back to drug and device manufacturers because of intermingled data. These data will now not be included until the next reporting cycle in June.

All of this is a black cloud for a regulation that has been viewed skeptically at best during its implementation. The effects of this legislation on consumers are heavily dependent on how comprehensive and user-friendly the online database turns out to be, and these early indications do not bode well for the system.


Moreover, the physician-industry relationship has historically played a critical role in advancing medical breakthroughs and educating caregivers. This is particularly true in the field of ophthalmology. For this reason, doctors and medical companies have been concerned that the Sunshine Act may disrupt the positive dynamism of this relationship. Many believe that physicians may become averse to working with (or speaking on behalf of) particular medical companies because they do not want an official affiliation on record. Manufacturers have also expressed concern about the burdensome nature of the requirements; in their view, tracking every $10 payment is unnecessarily arduous, cost inefficient, and likely to result in accidental fines. Others are concerned with the hefty penalties for noncompliance for a gift that may be of comparatively little value. There have even been First Amendment concerns raised regarding the reporting of educational books and reprints.


It may not stop there: In early July, CMS proposed removing the exclusion for reporting funding for continuing medical education (CME) in the Sunshine Act. CMS claims this is because the exclusion is redundant with another provision of the law, known as the indirect payment exclusion. This provision states that manufacturers must be “unaware” of the lecturers’ identities for essentially up to 1.5 years after an indirect payment for things like speaking engagements has been made. It is generally rare for a manufacturer to be unaware of these things for 18 months, and thus, Sunshine Act stakeholders are concerned that CMS’ plan will have a negative impact on both speakers and attendees at CME events.


The only thing that is clear is that CMS is running out of time to prove they can deliver a program that is of true benefit to patients and the health care industry, or whether it merely places additional burdens on physicians and manufacturers without engendering any positive fundamental change at all.

Jeffrey J. Kimbell

Jeffrey J. Kimbell is the Founder and President of Jeffrey J. Kimbell and Associates, a Washington-based consulting firm focused on the executive and legislative branches of the US federal government and specializing in providing strategic solutions to a select group of health care sector clients seeking creation, modification, or proper implementation of public law. Mr. Kimbell may be reached at JKimbell@ Kimbell-Associates.com; or (202)735-2590.

Kenneth L. Hodge

Kenneth L. Hodge is an Associate Director of Government Affairs and Legislative Policy with Jeffrey J. Kimbell and Associates, where he has worked for 4 years.