The Sunshine Act, also known as the Open Payments Program, is a federal law that requires pharmaceutical and medical device companies to report certain payments and gifts made to healthcare providers. The goal of the Sunshine Act is to increase transparency around these financial relationships so that patients can make more informed decisions about their care.
Pharma companies must take compliance with the Sunshine Act seriously, as the penalties for non-compliance can be severe. In this blog post, we'll provide a quick overview of the Sunshine Act and its requirements so that you can ensure your company is in compliance.
What Does the Sunshine Act Require?
The Sunshine Act requires all covered entities to report any payments or transfers of value that are made to healthcare providers. Covered entities include pharmaceutical and medical device manufacturers, group purchasing organizations, and distributors.
Payments or transfers of value can take many forms, including but not limited to:
- Cash or cash equivalents (e.g. gift cards)
- In-kind gifts (e.g. travel expenses)
- Stock options or other ownership interests
- Directly paying for or reimbursing healthcare provider expenses
- Educational grants
- Charitable donations in the name of the healthcare provider
Every payment or transfer of value must be reported, regardless of the amount. Payments or transfers of value that are made under an existing written contract do not need to be reported if they fall into one of several excluded categories.
How Often Are Reports Required?
Reports must be submitted on a yearly basis, with data for each calendar year being due March 31st of the following year. For example, data for 2022 must be submitted by March 31st, 2023.
What Happens if My Company Does Not Comply?
Companies that do not comply with the Sunshine Act may be subject to civil monetary penalties of up to $11,000 per violation, as well as exclusion from federally funded healthcare programs such as Medicare and Medicaid.
It is important to note that even if your company makes an error in its reporting (e.g., mistakenly omitting a payment), you may still face penalties if CMS determines that the error was willful or intentional. This is why it is so important to have a robust compliance program in place to avoid errors in reporting.
What Should I Do if I Suspect Non-Compliance?
If you suspect that your company is not in compliance with the Sunshine Act, you should reach out to an experienced healthcare attorney for guidance on how best to proceed. Healthcare attorneys can help you determine whether non-compliance has occurred and advise you on how to remedy the situation if it has.
The Sunshine Act is a complex law with strict requirements for reporting payments and transfers of value made by pharmaceutical and medical device companies to healthcare providers. Non-compliance can result in severe penalties, including civil monetary fines and exclusion from federally funded healthcare programs. As such, it is crucial for pharma companies to have a robust compliance program in place. If you suspect your company is not in compliance, reach out to an experienced healthcare group for guidance on how best to proceed.