Physician Payments Sunshine Act
U.S. law requiring disclosure of payments to physicians and teaching hospitals.
Definition
The Sunshine Act (Open Payments program) requires manufacturers of drugs, devices, biologics, and medical supplies covered by Medicare/Medicaid/CHIP to report transfers of value to physicians, certain non-physician practitioners, and teaching hospitals. Reports go to CMS Open Payments each year and the data is published. Companies track payments for meals, consulting, travel and research, and reporting errors can lead to civil penalties.What this means in practice
Reported annually by CMS and publicly searchable. Mis-reporting creates reputational and enforcement risk; KOL agreements must be FMV and well-documented.Examples
- A medical device company pays a surgeon a consulting fee for their expertise in developing a new surgical tool, requiring this payment to be reported to CMS.
- A pharmaceutical manufacturer sponsors a physician's travel and accommodation to attend an educational conference where their drug is discussed, necessitating disclosure under the Open Payments program.
- A MedTech company provides a research grant to a teaching hospital for a study involving their diagnostic equipment, which then must be reported to CMS.
- •Failing to accurately categorize transfers of value can lead to misreporting and penalties.
- •Inadequate documentation of fair market value for key opinion leader (KOL) agreements can result in non-compliance.
- •Overlooking indirect payments or transfers of value made through third parties can lead to enforcement actions.
- •Not understanding the specific definitions of "applicable manufacturer" and "covered recipient" can lead to reporting errors.
Frequently asked questions
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Sources
3 sourcesSources support the definition or relevant regulatory context, not necessarily every claim on this page. Each is graded against our source-tier hierarchy so you can see what rests on binding law versus commentary.
- 1CMS Open PaymentsTier 2 VerifiedCMScms.gov
- 2AdvaMed Code of EthicsTier 4 VerifiedAdvaMedadvamed.org
- 3AHRMM - Healthcare Supply ChainTier 4 VerifiedAHRMMahrmm.org
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