What Does the Impending Sunshine Act Mean for You?

July 16, 2013

The deadline is looming for the first reporting period under the Sunshine Act. Beginning on August 1, 2013, pharmaceutical, biologic and medical device manufacturers must collect data relating to physician ownership interests in the manufacturer and all “transfers of value” made to physicians and teaching hospitals.


The Sunshine Act, part of the Affordable Care Act, requires certain manufacturers to disclose payments and other “transfers of value” made to physicians and teaching hospitals and certain ownership and investment interests held in the manufacturer by physicians. “Transfer of value” is defined broadly and includes cash or cash equivalents, in-kind items or services, stock ownership, returns on investment, consulting fees, royalty or license payments, charitable contributions, gifts, certain payments related to research, and reimbursement of certain expenses. A wide variety of arrangements are covered including research sponsorship, continuing medical education seminars, compensation arrangements, education materials, and manufacturer-sponsored social events.

Initial Reports

Manufacturers must submit the first reports, covering the period between August 1, 2013 and December 31, 2103, to the Centers for Medicare & Medicaid Services (CMS) by March 31, 2014. The reports will be made public on a CMS website on September 30, 2014. As a result, descriptions of many of the relationships that physicians and teaching hospitals have with manufacturers will be publicly available at the end of next year—both to patients and to government enforcement agencies, including the Office of Inspector General.

What Should Physicians and Teaching Hospitals Be Doing Now?

Physicians and teaching hospitals will have a chance to review and dispute the information provided by the manufacturers to CMS but the window for review before the information is made public is short. What should you be doing now?

  • Physicians and teaching hospitals should identify the arrangements they have with manufacturers and be prepared to dispute any inaccurate reports.
  • Physicians and teaching hospitals should also evaluate their financial arrangements with manufacturers. Some arrangements may require modification or even termination because they do not comply with anti-kickback or other health care laws.
  • Teaching hospitals and practices that employ physicians should review their policies regarding conflicts of interest and employee receipt of compensation from outside activities. Some of the manufacturer-physician financial arrangements reported on the CMS website may violate the employer’s policies. Now is a good time for employers to plan their response.

Please contact Maria Abrahamsen at 248.203.0818,, or Kathrin Kudner at 734.214.7697,, if you have any questions.

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