Championed by Senator Chuck Grassley and enacted in 2013 as part of the Affordable Care Act, the Physician Payments Sunshine Act requires group purchasing organizations (GPOs), pharmaceutical companies, and medical device companies to report payments made to physicians and teaching hospitals.
Designed to reduce conflicts of interest, provide transparency to financial relationships, and enable the public to make more informed decisions on patient care, the act has tracked and disclosed nearly $77 billion in payments, transfers of value, and investment interests over the last seven years.
However, growing public scrutiny over health insurance, healthcare providers, potential conflicts of interest, and an aging population mean the act is perhaps more significant than ever. But with annual updates to the Centers for Medicare & Medicaid Services (CMS) Open Payments program, changes to what’s required, and training new staff members, understanding the Physician Payments Sunshine Act isn’t always easy.
To navigate the Physician Payments Sunshine Act, we’ve put together a breakdown of relevant information, making your job as a reporting entity or covered recipient a tad simpler. Let’s take a look at one of the landmark acts of healthcare legislation and how it affects you.
As mentioned, the Physician Payments Sunshine Act requires reporting entities to report payments made to covered recipients. An important aspect of this idea is understanding who’s included in each of these definitions. Reporting entities include:
Each calendar year (January 1 to December 31), these entities must report general payments to covered recipients via the CMS Open Payments system. Per the Physician Payments Sunshine Act, covered recipients include:
Once an entity submits open payments data, the CMS publishes an annual report known as the Open Payments database. This information is then available at openpaymentsdata.cms.gov, where the public can search for individual companies, specific providers, and teaching hospitals.
What a company needs to report is the focal point of the Physician Payments Sunshine Act. Failure to report a payment can result in heavy fines — $1.176 million for knowingly omitting a payment and $176,000 for unknowingly doing so. With hefty fines and potential financial ruin on the line, understanding what you need to report is integral.
Direct and indirect payments from reporting entities to covered recipients always need to be reported to the CMS Open Payments system for data collection. The Physician Payments Sunshine Act breaks down the nature of payments into three categories: general payments, research payments, and ownership or investment interests.
General payments are payments from an entity to a recipient that don’t fall under research or ownership/transfer of value terms. Some of the most common general payments include:
For more information on general payment reporting requirements, visit the CMS FAQ page.
Making up nearly 2/3 of reported data to the CMS, research payments are any payments made to a covered recipient in connection with a formal medical research agreement, including any writing or published studies if they are part of that agreement.
In some instances, research payments are indirect, meaning a third party or intermediary is involved in the payment process. This includes payments to a covered recipient funneled through medical associations, medical education institutions, medical specialty societies, or research organizations.
Reporting entities must also report any ownership or investment interests in their company in regard to an investment by a covered recipient or their immediate family members. Though technically not a payment, transparency reports use this information to disclose any conflicts of interest between relevant parties.
Regardless of the type of payment, the CMS requires entities to report and submit the data for the prior year. This reporting period goes from February 1 to March 31. March 31 is a hard deadline — the CMS doesn’t allow extensions.
Failure to report this information by March 31 may result in a civil monetary penalty of up to $1.15 million, depending on the severity and the scope of non-reporting.
Though simple in theory, the Physician Payments Sunshine Act can present problems to reporting entities with poor recordkeeping or a lack of training. To avoid some of the common challenges with the act, entities should familiarize themselves with some of the pitfalls. By proactively identifying these issues, they can take the necessary steps to circumvent them.
Even if reporting entities follow the law, report all payments, and submit them on time, disputes may happen. From April 1 to May 15, covered recipients can view the data for accuracy and completeness. If a covered recipient believes a payment or transfer of value is inaccurate, they can initiate a dispute with the reporting entity at any time during this 45-day period.
Interestingly, the Physician Payments Sunshine Act doesn’t stipulate that the CMS or any government entity should have any responsibility in settling disputes. Instead, the covered recipient contacts the reporting entity directly.
Once the reporting entity receives notification from a covered recipient, it can review the record, communicate to solve the dispute, and ultimately decide how to rectify the situation. In these scenarios, entities have 15 days beyond the March 31 deadline to resolve the dispute.
If the dispute is resolved, the CMS publishes the information as normal. However, any dispute unresolved 15 days after the March 31 deadline is marked as “disputed,” which can damage the reputation of the reporting entity.
One of the major hindrances of the Physician Payments Sunshine Act is recordkeeping. To create accurate data and eliminate fines, you need to have a system in place. However, strong recordkeeping isn’t always an innate trait in the healthcare industry. As such, payment records can disappear or be reported inaccurately, damaging a company’s reputation and putting it at risk of financial issues.
The CMS lays out all the information a company needs to accurately report its payments, but that doesn’t mean your entire staff follows the protocol. A lack of training, and more specifically, new hires, may have trouble understanding what gets reported, how to enter it into your recordkeeping system, or how to upload the files to the CMS Open Payments webpage.
Though the challenges of the CMS and Sunshine Act can have severe consequences, they’re by no means impossible to overcome. If you have any of the problems listed above, consider these solutions and add them to your reporting practices.
Difficulty tracking payments isn’t a unique situation; it happens in all industries. But to adhere to the guidelines and rules of the Physician Payments Sunshine Act, an all-in-one payment and tracking platform is ideal.
That’s where Hoppier can help. Originally a digital gift card provider, Hoppier has branched out as a payment compliance platform that gels perfectly with the Physician Payments Sunshine Act, allowing you to:
The brilliance of Hoppier as your all-in-one platform for the Physician Payments Sunshine Act is its simplicity. You only need to make a few clicks to have your program up and running.
Start by creating a program. Name it something like “Sunshine Act” or “CMS Open Payments” for clarity. Next, add your company colors and logo to reinforce your brand with a covered recipient.
Once you’ve created your program and card, choose the amount for the gift card. After you select the amount, you can choose how it’s spent. Allow the user to use it anywhere Visa is accepted, or narrow your card to a few vendors so it’s used for a specific purpose, such as an entertainment, meal, or gas stipend.
Now that you have everything the way you want it, upload or manually enter your recipients’ email addresses. They’ll receive the card, complete with instructions on how to use it.
On the back-end, Hoppier’s tracking software shows you each transaction and logs it. When you’re ready to send your information to the CMS Open Payments system, download the CSV file and upload it to the CMS system. It’s that easy!
Keep your staff up to date on anything regarding the Physician Payments Sunshine Act and CMS Open Payments. The rules can change annually, so in the spirit of compliance, you should go to the CMS website at the beginning of each calendar year and review any changes.
Provide a rubric or document to each relevant staff member about changes, as well as how to use your payment/recordkeeping system, as well as track and upload payments to the CMS system.
When you’re ready to upload your data, use these instructions to ensure it’s updated accurately and on time:
Building a culture of transparency in any organization is tantamount to success, and the Physician Payments Sunshine Act and CMS Open Payments program are excellent litmus tests. With excellent recordkeeping, the perfect tracking and payment platform, and a well-trained staff, you have all of the ingredients for transparency — in both the CMS and your organization as well.
Ready to 2x your global engagement at your next event, with Ox stress?
Make Hoppier your unfair advantage today, schedule a demo
Ready to 2x your global engagement at your next event, with Ox stress?
Make Hoppier your unfair advantage today, schedule a demo
Ready to 2x your global engagement at your next event, with Ox stress?
Make Hoppier your unfair advantage today, schedule a demo
Ready to 2x your global engagement at your next event, with Ox stress?
Make Hoppier your unfair advantage today, schedule a demo
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