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How the Physician Payment Sunshine Act Could Affect Practice Revenue

Greg Freeman, October 10, 2013

This provision of the healthcare law does not create new penalties for financial interactions with drug or device companies, or any other organization, but it may cause doctors to change some of their outside activities.

This article originally appeared in Managed Care Contracting & Reimbursement Advisor, October 2013.

The Physician Payment Sunshine Act, also known as the National Physician Payment Transparency Program and the Open Payments Program, is another part of the Patient Protection and Affordable Care Act that has physicians wondering just how it will affect their revenue and managed care reimbursement.

The good news is that it does not have to produce an adverse financial impact on your practice, though you may have to change some of your outside activities to keep the program from complicating how you provide care.

Enacted in February 2013, section 6002 of the ACA sets forth the Physician Payment Sunshine Act. Like most of the ACA, at its core the Sunshine Act is about transparency and public disclosure, explains Craig B. ­Garner, JD, an attorney in Santa Monica, Calif. The final regulations attempt to close practically every viable loophole that may have existed in prior versions of the Sunshine Act by requiring certain disclosures by manufacturers of drugs, devices, and biological or medical supplies who participate in any federally funded healthcare program.

Many group purchasing organizations (GPO) must also make similar disclosures, including but not limited to certain physician ownership or investment interests and certain payment information made by these entities to physicians. The deadline for compliance pursuant to these regulations is August 1, 2013, when these entities must begin to collect the information, and March 31, 2014, the date by which these entities must report information to the federal government.

Certain activities are exempted, such as taking samples from a drug company to distribute to patients. But most compensation or goods worth $10 or $100 aggregate in a year must be reported. (See the sidebar below for more details on how the law works.)

"This is forcing everyone to shine a bright light on how they are compensating physicians," Garner says. "On one hand, it's good we'll know how everyone is being compensated and who they are involved with. But on the other hand, if people are doing something wrong that they don't want everyone to know, they're probably not going to be that concerned about making a proper disclosure."

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