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Physician Groups Seek Sunshine Act Changes

Written by Brian Dunphy and Kate Stewart

Seventy-four state and federal physician organizations, including the American Medical Associationrecently asked the Centers for Medicare & Medicaid Services (“CMS”) to exclude textbooks and peer-reviewed medical journal reprints from the Sunshine Act’s reporting requirements.

As is well known, the Sunshine Act statute and regulations require pharmaceutical and medical device manufacturers (“Manufacturers”) to report payments and transfers of value to physicians and teaching hospitals.  Several types of payments are excluded from reporting, including the provision of educational materials that directly benefit patients or are intended for patient use.  CMS determined in the Sunshine Act regulations that medical textbooks, reprints of peer-reviewed scientific clinical journal articles, and abstracts of these articles do not fit within this reporting exception because they are not directly beneficial to patients or intended for patient use.  Manufacturers must therefore report instances where they provide these materials to physicians.  The physician groups disagree with CMS’s interpretation, which they argue is inconsistent with the Sunshine Act statute, congressional intent in passing the Sunshine Act, and “the reality of clinical practice where patients benefit directly from improved physician medical knowledge.”

According to the letter, because Manufacturers must report the provision of medical information to physicians, there is “a clear disincentive for clinicians to accept high quality, independent educational materials; an outcome that was unintended when the provision was passed into law.”  As a result, the physician groups are concerned that federal Sunshine Act reporting will “prevent the timely distribution of rigorous scientifically reviewed medical information” and will “undermine efforts to improve the quality of care provided to patients.”

While CMS will likely be reluctant to amend the final Sunshine Act regulations, the letter highlights the Sunshine Act’s evolving impact on the relationships between Manufacturers and physicians.  Without a regulatory change, one of the Sunshine Act’s unintended consequences may be to limit sharing of scientific and medical information.

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Brian P. Dunphy is a member of the Health Care Enforcement & Investigations Group at Mintz. He defends clients facing government investigations and whistleblower complaints regarding alleged violations of the federal False Claims Act. Brian also handles commercial health care litigation.