Physician Payment Sunshine Act Moving Forward in Congress

October 9, 2008

First introduced in September 2007 as S. 2029 by Senator Charles Grassley (R-IA), the ranking member of the Committee on Finance, and Senator Herb Kohl (D-WI), the Chair of the Special Committee on Aging, the Physician Payment Sunshine Act is progressing through Congress. Representatives Peter DeFazio (D-OR) and Pete Stark (D-CA), Chairman of the Ways and Means Subcommittee, introduced a bill in the House similar to the Senate version in March of this year (H.R. 5605).  A number of trade associations, including PhRMA and AdvaMed, have voiced their support of the Senate bill and the Consumers Union, the American Medical Student Association and the Medicare Rights Center have come out in support of the House bill.  One pharmaceutical manufacturer, Eli Lilly, has announced that it will voluntarily make public certain payments to physicians even absent the legislation. 

The Act’s underlying purpose is “to shine light” on payments by pharmaceutical companies to practitioners.  Congress believes that such payments are intended to influence medical decision-making regarding patient treatment.  The Act would amend title XI of the Social Security Act to provide for transparency in the relationship between physicians and manufacturers of drugs, devices, or medical supplies for which payment is made under Medicare, Medicaid, or the State Children’s Health Insurance Program.  Specifically, both bills propose requiring electronic reporting of gifts valued at more than $25, public availability to the information reported, and stiff civil money penalties for failing to report (between $10,000 and $1000,000 for each violation, although the House bill includes a “knowing” component).   

A few states (Maine, Minnesota, Vermont, West Virginia) and the District of Columbia have enacted laws similar to the proposed bill.  The Senate bill, however, would preempt these state laws to guarantee consistency in application among the states.  So far, industry has generally come out in support of the legislation, but has advocated for a higher threshold reporting requirement.

By Serafina E. Lobsenz and Anne Marie Murphy

Categories: Fraud and Abuse