Q&A: For best ethical practice, understand the Physician Payment Sunshine Act

Q: What do I need to know about the Physician Payment Sunshine Act?

A: Financial relationships between practitioners and medical product manufacturers are common, ranging from free food to consulting and speaker fees. Most professionals know the need to declare potential conflicts of interest, but many individuals are enticed by the financial incentives offered to them. CMS published industry payments to physicians in 2014 totaling $6.49 billion: $2.56 billion in general payments, $3.23 billion in funded research, and $703 million represented ownership stakes in drug and device companies. Although the intent of these relationships often starts with doing what is best for clients, the path takes a disastrous detour. The professional boundaries of the workforce become blurred, with ethical gaps and legal headaches for all involved.

The Physician Payments Sunshine Act (PPSA), section 6002 of the Affordable Care Act (ACA) of 2010, was developed to promote transparency around these financial relationships. In a nutshell, the PPSA mandates pharmaceutical and device manufacturers report to CMS direct or indirect transfers of value made to physicians and teaching hospitals. These indirect payments are situations where a manufacturer requires, instructs, directs, or otherwise causes a third party to provide payment or transfer of value (e.g., honorariums, stock options, covered expenses) in whole or in part to a covered recipient.

CMS fulfills the law’s mandate through the Open Payments Program, a portal specifying the disclosures of healthcare providers, applicable manufacturers, and group purchasing organizations in the United States. Several states, along with the District of Columbia, have laws in place to ensure higher levels of transparency with relationships that could imply a conflict of interest between the provider and another entity.

For more information, see The Essential Guide to Interprofessional Ethics in Healthcare Case Management . Need expert advice? Email your questions for consideration in the Revenue Cycle Daily Advisor. Note: We do not guarantee that all questions will be answered.