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The Sunshine Act Also Rises: One More Chance for Medical Device Manufacturers to Prepare

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The Physician Payment Sunshine Act, which was incorporated into Section 6002 of the Affordable Care Act, requires pharmaceutical, medical device, biological and medical supply manufacturers to file annual reports on payments to physicians and teaching hospitals. Despite the requirement in the law that manufacturers submit their first report in March 2013 disclosing payments made during 2012, two events have pushed back that obligation or taken the sting out of noncompliance.

First, although Centers for Medicare & Medicaid Services (CMS) was required to publish standards for reporting information and making that information available online to the public, it has yet to publish final regulations. As recently as May 2012, it posted a blog notice on its website announcing that manufacturers will not be required to start collecting data until January 1, 2013. The reason given for the delay was that it simply needed time to sort through the over 300 comments that were received.

The second event that should be good news to manufacturers comes from Vermont. Vermont, along with eight other states and the District of Columbia, already have laws requiring manufacturers to report payments to physicians as well as financial penalties for failing to submit reports. Even though the Sunshine Act supersedes those state laws, any part of a state law that contains different or broader reporting requirements than the federal law remains in effect. However, since CMS has not published its regulations, answering that question may be more difficult than it appears at first. The good news is that the Vermont Attorney General has offered a limited amnesty to manufacturers of medical devices and biologics (but not pharmaceuticals) who did not report during any period between July 1, 2009 and December 31, 2011. The reprieve waives the penalties, but not registration fees or penalties under other state laws. While a complete report is not required immediately, the offer is for a limited time only and is good through October 1, 2012. Any inquiries should be sent to the Vermont Attorney General’s office at prescribedproducts@atg.state.vt.us.

For more information, contact the author at rwanerman@ebglaw.com.