The Physician Payment Sunshine Act (PPSA) was introduced by Senators Charles Grassley (R-Iowa) and Herb Kohl (D- Wisconsin) to increase the transparency of financial interactions between drug and medical device makers and physicians and hospitals, allowing the public full disclosure of all financial exchanges. The PPSA will mandate reporting of financial exchanges (both monetary and gift) that are greater than $10 between drug makers and physicians or drug makers and hospitals. Will this imposed transparency make an impact on patient care or just create another paperwork burden on an already burdened healthcare system?


The PPSA is part of the Patient Protection and Affordable Care Act, a much broader healthcare reform initiative. The Centers for Medicare and Medicaid Services (CMS) will implement the required physician payment recording in January 1, 2013; this date is later than the original anticipated implementation. In response to the original rule in 2010, over 300 comments were made to the CMS regarding concerns about the PPSA causing a delay. The reporting date of payments given and received, as set by the CMS, will begin on March 31, 2013, and the first public reports will be published on September 30, 2013, with subsequent yearly reports to be published on June 30.

The definition of payments is broad and encompasses many categories including, but not limited to: gifts, food, education, research grants, travel, royalties, and “any categories of information the secretary determines appropriate.” But there are exemptions from the reporting rule. Some of these exemptions include, but are not limited to: gifts under $10 unless the cumulative value exceeds $100 per calendar year, samples of products (this falls under a separate provision that will not be discussed here), legal services, and trial equipment loans not exceeding 90 days. There will be stiff penalties imposed for failure to report.


Will the implementation of the Physician Payment Sunshine Act lead to better healthcare for patients?


The Sunshine Act will not improve healthcare if:

1)    The Act limits the patient’s access to new drugs (either directly or indirectly).


The Sunshine Act limits the patient’s access to new drugs

There is concern that the PPSA will limit the physician’s knowledge about new drugs, mainly because the current law may limit or prohibit teaching hospitals from collaborating with drug manufacturers. Additionally, there is immediate concern that the current language of the PPSA regarding continuing medical education (CME) may be misinterpreted. The American Medical Association (AMA) asserts that the current interpretation regarding the exemption status of CME is “not supported by statutory language.” It is clear that these unaddressed concerns may have long reaching ramifications pertaining to direct patient care. In its current state, the PPSA may limit a patient’s access to new drugs either directly via the physician’s lack of awareness or indirectly via the physician’s hesitation to partake in CMEs.


Under the current provisions, the PPSA may prove to hinder patient care by prohibiting or limiting teaching hospital and drug manufacturer collaboration, and if the statutory language regarding CME is not corrected and made clear, the CME are exempt from reporting.

For more information on this issue, contact the Kulkarni Law Firm.