Opinion

Enforcement of the Physician Payments Sunshine Act

VIEWPOINT
Trust and Verify

Eli Y. Adashi, MD, MS The Open Payments Program, the product of the Phy- anesthetists and anesthesiologist assistants, and certi-
Medicine and Biological sician Payments Sunshine Act, also known as section fied nurse midwives.5
Sciences, Brown 6002 of the Patient Protection and Affordable Care Act, Designed with accountability through transparency
University, Providence,
obligates “any applicable manufacturer that provides a in mind, the Open Payments Program sees to the annual
Rhode Island.
payment or other transfer of value to a covered recipi- publication of the aggregate data it receives in a search-
I. Glenn Cohen, JD ent” to report to the Centers for Medicare & Medicaid able online database that is accessible to the general
Harvard Law School, Services (CMS) “payments or other transfers of value” public.6 The most recent (sixth) Open Payments report
Petrie-Flom Center for to physicians and teaching hospitals.1 Late, inaccurate, (program year 2019) details the disbursement of a total
Health Law Policy,
and incomplete reporting to the Open Payments Pro- of $10 billion in payments or transfers of value to 614 910
Biotechnology, and
Bioethics, Harvard gram may result in the imposition of civil monetary physicians and 1196 teaching hospitals.6 Less well known
University, Cambridge, penalties.1 Not until recently, however, has noncompli- are the ongoing compliance initiatives of the Open Pay-
Massachusetts. ance with the program been the subject of public en- ments Program. Intent on improving the timeliness, ac-
forcement; in 2019, at the urging of Senators Grassley curacy, and completeness of the reported data, the pro-
(R-IA) and Wyden (D-OR), CMS undertook for the first gram offers a selection of educational forums to multiple
time to litigate alleged violators of the Open Payments applicable manufacturers and group purchasing
Program.2 Two settlements with medical device manu- organizations.6 In program year 2019, the Open Pay-
facturers quickly followed.3,4 Going forward, enforce- ments Program contacted more than 35 000 physi-
ment of noncompliance with the program is to be ex- cians to increase awareness of the reporting require-
pected. A recent public statement to this effect on the ments pertaining to physician-owned distributorships.6
part of CMS endorsed the continuance of the “partner- Outreach efforts included electronic listserv distribu-
ship with the Department of Justice [DOJ] to resolve al- tions, webinars, monthly stakeholder calls, and working
legations of manufacturers skirting their Open Pay- groups.6 The Open Payments Program also annually
ments obligations.”3 In this Viewpoint we revisit the contacts those reporting entities whose record may be
in need of remediation.6 Specifically,
CMS hosted 2 webinars and maintained
Designed to ensure accountability regular communication with stakehold-
ers via Open Payments email distribu-
through transparency, the Open tions through the CMS Open Payments
Payments Program relies on timely, self-subscribe listserv.6
The importance of outreach ac-
complete, and accurate reporting…[and] tivities notwithstanding, additional
remains one of the most promising scrutiny may well be called for if trans-
antidotes for conflicts of interest involving parency and accountability are to be op-
timally served. It is in this context that a
industry and the health care system. modicum of enforcement activity must
be brought to bear. Absent such, the
Open Payments Program, discuss its alleged violations, Open Payments Program is left to rely on the probity
and project the future enforcement thereof. of its reporting entities. As noted by Senators Grassley
The Open Payments Program requires pharmaceu- and Wyden in their letter to the leadership of CMS,
tical and device manufacturers, as well as group pur- a “covered entity” that “knowingly fails to submit
chasing organizations that participate in Medicare, Med- payment information is subject to civil monetary
icaid, or the Children's Health Insurance Program penalties.”2 Nothing less will do if the Open Payments
(“reporting entities”), to disclose certain payments or Program is to be in a position to ensure timely, com-
transfers of value to physicians and teaching hospitals plete, and accurate reporting. It was to this end that the
(“covered recipients”).1 Categories of payments or trans- crafters of the Physician Payments Sunshine Act autho-
fers of value that are to be reported comprise gifts, hono- rized the Open Payments Program to impose civil mon-
raria, travel, marketing, research, education, acquisi- etary penalties on entities that are noncompliant with
Corresponding
Author: Eli Y.
tions, loans, grants, and debt forgiveness.1 Also to be its reporting requirements.1,2,6
Adashi, MD, MS, reported is ownership or investment interest held by It is against this backdrop that the DOJ embarked
Brown University, physicians or their immediate family members.1 Catego- on its first effort at enforcing the Open Payments
222 Richmond St,
ries of covered recipients are to expand on January 1, Program.3 As alleged by the DOJ, Minnesota-based
Providence, RI 02903
(eli_adashi@brown. 2022, to include physician assistants, nurse practition- Medtronic USA, Inc failed to apprise CMS of payments
edu). ers, clinical nurse specialists, certified registered nurse made to a physician in violation of the Open Payments

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 Opinion Viewpoint

Program.3 The ensuing $1.11 million component of the civil settle-
ment resolved allegations that Medtronic failed to accurately re-
port to CMS payments it made to a physician.3 As a manufacturer
of medical devices for which Medicare payment is available,
Medtronic was deemed legally bound by the reporting require-
ments of the Open Payments Program.1,3 The DOJ further alleged
that Medtronic engaged in the payment of kickbacks to a physician
to induce the “use of certain Medtronic products.”3 It was in this con-
text that Medtronic agreed to pay $8.1 million to resolve allega-
tions that it violated the Anti-Kickback Statute.3
More recently, the DOJ embarked on its second effort to
enforce the Open Payments Program.4 The resultant $1 million
settlement resolved allegations involving Medicrea International,
a French medical device manufacturer, and its US affiliate
(Medicrea USA).4 As alleged by the DOJ, Medicrea International
violated the Open Payments Program by failing to fully report to
CMS expenses related to the travel and entertainment of
US-based physicians who attended a conference in France. 4
Medicrea International further agreed to pay $1 million to the US
and participating states to resolve civil allegations that the com-
pany violated the Anti-Kickback Statute, the False Claims Act, and
similar state statutes.4
The aforementioned efforts to enforce the Open Payments
Program suggest that more enforcement actions may soon follow.
In the interim, pharmaceutical and device manufacturers would do
well to validate their compliance efforts. To do otherwise would be
to misread recent admonitions made by CMS to the effect that
“manufacturers that misreport their financial relationships with
healthcare providers erode the integrity of the Open Payments
Program and will be held accountable.” 3 Designed to ensure
accountability through transparency, the Open Payments Program
relies on timely, complete, and accurate reporting. As such, the pro-
gram remains one of the most promising antidotes for conflicts of
interest involving industry and the health care system. However,
voluntary disclosure by vendors of health care products may not
suffice when financial conflicts of interest are at stake. Absent a
meaningful threat of litigation, as in the Medtronic and Medicrea
cases, compliance is unlikely to be all that it can be. The recent
efforts to enforce the Open Payments Program must thus be
viewed not only as indispensable but also as inevitable.

ARTICLE INFORMATION
Published Online: August 11, 2021.
doi:10.1001/jama.2021.13156
Conflict of Interest Disclosures: Mr Cohen
reported he serves as a bioethics consultant for
Otsuka on the Abilify MyCite product, is a member
of the Illumina ethics advisory, and serves as an
ethics consultant for DawnLight. No other
disclosures were reported.
REFERENCES
1. Pub L 111-148. 111th Cong. Patient Protection and
Affordable Care Act. Published March 23, 2010.
Accessed July 22, 2021. https://www.congress.gov/
111/plaws/publ148/PLAW-111publ148.pdf
2. Grassley CE, Wyden R. Letter to the Office of
Inspector General and Centers for Medicare &
Medicaid Services. Published March 19, 2019.
Accessed July 22, 2021. https://www.finance.
senate.gov/imo/media/doc/2019-03-19%20CEG%
20RW%20to%20HHS%20OIG%20and%20CMS
%20(Sunshine).pdf
3. US Department of Justice. Medtronic to pay over
$9.2 million to settle allegations of improper
payments to South Dakota neurosurgeon.
Published October 29, 2020. Accessed July 22,
2021. https://www.justice.gov/opa/pr/medtronic-
pay-over-92-million-settle-allegations-improper-
payments-south-dakota-neurosurgeon
4. US Department of Justice. French medical
device manufacturer to pay $2 million to resolve
alleged kickbacks to physicians and related
Medicare Open Payments Program violations.
Published May 19, 2021. Accessed July 22, 2021.
https://www.justice.gov/usao-edpa/pr/french-
medical-device-manufacturer-pay-2-million-
resolve-alleged-kickbacks-physicians
5. HR6—SUPPORT for Patients and Communities
Act. Pub L 115-271. Published October 24, 2018.
Accessed July 7, 2021. https://www.congress.gov/
bill/115th-congress/house-bill/6
6. Department of Health and Human Services,
Centers for Medicare & Medicaid Services. Fiscal
year 2020 annual report to Congress on the Open
Payments Program. Published April 2021. Accessed
July 22, 2021. https://www.cms.gov/files/
document/open-payments-2020-annual-report-
congress.pdf

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