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Understanding the Physician Payment Sunshine Act Expansion

April 1, 2021
April 1, 2021

What Is the Sunshine Act?

The Physician Payment Sunshine Act, a component of the Affordable Care Act of 2010, stated that drug and device companies had to collect and disclose financial information detailing how much money and gifts they give each year to physicians, surgeons, dentists, certain osteopaths, and teaching hospitals (aka “covered recipients”).

Why Was the Sunshine Act Passed?

The goal of the law is to enhance patient safety by increasing the transparency of financial relationships between health care providers and pharmaceutical manufacturers. By the early 2000s, research started to show that even small gifts, such as the pens or coffee mugs that were routinely given to physicians, could influence prescribing patterns in a way that is disconnected from what is in the best interest of patient outcomes. This research led to significant changes to some pharmaceutical marketing practices. In 2007, senators introduced the Physician Payments Sunshine Act in an effort to increase transparency in payments to physicians. After failure as an individual law, it was eventually incorporated in the 2010 Affordable Care Act.

The Sunshine Act is expanding. What Does that Mean and Who is Involved?

Expansion of the act means that more categories of care providers will be considered ‘covered recipients’ and provisions about reporting all medical industry gifts and other payments will apply to them, in addition to the earlier healthcare professionals who were included.

Who Is Included in the Expansion?

The Centers for Medicare and Medicaid Services (CMS) Final Rule issued November 1, 2019 expands the definition of covered recipients to include physician assistants, nurse practitioners, clinical nurse specialist, certified nurse midwives, and registered nurse anesthetists.

When Does the Expansion Take Effect?

Beginning January 1, 2021, applicable manufacturers and group purchasing organizations (GPOs) will begin collecting financial transfer of value information for both the original and new provider categories.

Four Ways to Prepare for the Expansion

  1. Physician assistants and nursing staff should receive Conflict of Interest training along with other providers.
  2. Institutions should review internal policies and communicate any updates to providers as soon as possible.
  3. Continuing Medical Education providers should ensure their speakers are aware of the change in CE-related subcategories and voice internal expectations to their speakers.
  4. Compliance Offices should review their internal conflict of interest disclosure policies and practices and ask themselves if they’re asking the right questions of the right people across all demographics of their organizations in order to identify, mitigate, and manage financial, legal, and reputational risk.

HealthStream Solutions to Help You Prepare for Sunshine Act Expansion

  • Conflict of Interest Training
  • Conflict of Interest Management Tool

HealthStream’s Conflict of Interest management solution can help your organization cut costs, streamline disclosure distribution to save time, mitigate risk, and increase confidence with actionable data and administrative automation.

Earlier HealthStream blog posts have talked about the potential impact of the original Sunshine Act, and threats to the Sunshine Act from a healthcare industry feeling burdened by over-regulation. HealthStream has also surveyed healthcare organizations about their healthcare conflict of interest management in response to it.