The Physician Payment Sunshine Act: How It Works And How It Helps Patients

May 17, 2013

By Mitchell J. Shore

Drug and medical device manufacturers have long held a unique relationship with the doctors and hospitals they to do business with.

There’s no doubt that communication between the two provides a vital link to life-saving new products. But while physician innovation and research is essential, full-disclosure of these consulting contracts between doctors and medical companies is important to the integrity of the process. Further, claims that question manufacturers’ methods of securing business from physicians–often in the form of lavish gifts–may also be cause for concern.

It leads to the appearance that doctors may have financial incentives to recommend one product, drug or therapy to a patient over another.

A little-noticed part of the so-called Obamacare legislation passed in 2010 seeks to provide further oversight to these kinds of transactions. This part of the larger law is known as the Physician Payment Sunshine Act, and it is just starting to take effect. By this August, medical device and pharmaceutical companies will be required to report all gifts of value they give to physicians and teaching hospitals. The agency tasked with oversight and collecting all this information is the Department of Health and Human Services’ Centers for Medicare and Medicaid Services (CMS).

Starting in the fall of 2014, this information will be available online where patients, investigators and watchdog organizations can view the results and keep an eye out for potential instances of abuse or impropriety.

This is a truly significant step toward bringing transparency to the healthcare industry. I’m sure most doctors are smart and dedicated enough to only consider the best interests of their patients when prescribing medicines or making device recommendations, but this kind of openness and disclosure is critical to maintaining trust and accountability throughout the healthcare system.

I, like many plaintiff attorneys and patient rights activists, am excited to see what changes the Physician Payment Sunshine Act will bring. And responsible members of the healthcare profession, too, should be welcoming of this level of oversight.