The Sunshine Act: FAQs for Dentists

by Drew on December 9, 2013

The Sunshine Act: FAQs for Dentists

 
 

A new law called the Sunshine Act requires certain companies that provide payments, gifts, food, education, and other “transfers” to dentists to submit an annual report to the federal government with information about each dentist and what was provided. The government will post the information on a searchable public website called “Open Payments.” The companies must also report ownership and investment interests held by dentists and their immediate family members.

Not every payment and transfer is reportable. There are important exceptions, which are discussed below.

To fulfill their reporting obligations, these companies will ask dentists who receive reportable payments or other transfers for information such as name, business address, NPI and license number.

The ADA has prepared these FAQs to help members understand the implications of the new law.

1. What is the purpose of the Sunshine Act?
2. Which providers are affected by this program?
3. Do dental practices have any reporting requirements?
4. Is there a minimum dollar amount, or will every payment and transfer be reported?
5. Which companies are required to report?
6. What information will be included in a report?
7. Are “indirect” payments and transfers of value reportable?
8. How can a dentist keep track of payments and other transfers from companies?
9. How can a dentist find out that a report has been filed?
10. What can a dentist do if a report is inaccurate?
11. How much time does a dentist have to review a report before it is made public?
12. What if a dentist and the company are not able to resolve a dispute?
13. When do the data collection and reporting begin, and when do the reports become publicly available online?
14. What are the penalties for noncompliance?
15. What is meant by an “immediate family member” for purposes of reporting ownership and investment interests?
16. What are some things a dentist can do if a company says that a payment or transfer will be reportable?
17. What are some of the exceptions to the reporting requirement?
18. Are payments and transfers of value for research reportable?
19. If a company makes an indirect payment or transfer to me through my dental society, will my dental society have any reporting obligations?  Will my dental society be asked to provide information about me to the company?
20. Where can I find out more about the Sunshine Act and the Open Payments website?

1. What is the purpose of the Sunshine Act?
The Act is intended to make the financial relationships between industry and providers transparent on a national scale, and to give consumers information so they may ask questions and make more informed decisions about their healthcare providers.

2. Which providers are affected by this program?
The following practitioners are affected by the program, even if they do not treat Medicare or Medicaid patients:

  • Dentists
  • Dental surgeons
  • Doctors of medicine and osteopathy
  • Podiatrists
  • Optometrists
  • Licensed chiropractors

Payments and transfers of value to teaching hospitals will also be reported and posted.

3. Do dental practices have any reporting requirements?
No, dental practices have no reporting obligations under this program, unless they meet the definition of a company that is required to report (see below).

However, dentists have the right to review reports before they are published and to ask the company to make corrections. Therefore, dentists may wish to keep track of payments and other transfers that they receive from companies, and to review reports when they become available.

4. Is there a minimum dollar amount, or will every payment and transfer be reported?
Payments and transfers worth less than $10 are not reportable unless the company gives the dentist payments and transfers that add up to more than $100 in a given year. Therefore, companies will collect information on payments and transfers under $10, but will only report if the annual aggregate exceeds $100. Similarly, dentists may wish to keep a record of all payments and transfers in order to determine whether a report is accurate. These dollar amounts may be adjusted annually for inflation.

5. Which companies are required to report?
Only businesses that meet the definition of an “applicable manufacturer” or “applicable group purchasing organization” (“GPO”) are required to report. These definitions are complex and technical. A dentist will probably need to ask a company if it is required to report (for example, if a dentist is considering whether or not to accept a payment or transfer).

Applicable manufacturers:
Generally, a manufacturer of a drug, device, biological, or medical supply covered by Medicare, Medicaid or CHIP is an “applicable manufacturer.” Some distributors may meet the definition, such as certain repackagers, relabelers, and kit assemblers. In addition, some businesses that assist such applicable manufacturers with activities such as marketing and promotion may also meet the definition.
However, a dental practice is not an applicable manufacturer as long as it only “manufactures” covered drugs, devices, biologicals, or medical supplies for use by or within the dental practice itself, or for its own patients.

Applicable manufacturers must report payments and transfers to all dentists, and must report ownership and investment interests held by dentists and their immediate family members.

Applicable GPOs:
Generally, only GPOs that purchase, or arrange for or negotiate the purchase of, a drug, device, biological, or medical supply covered by Medicare, Medicaid or CHIP for a group of individuals or entities, but not solely for use by the GPO itself, are required to report.

Applicable GPOs must report ownership and investment interests held by dentists and their immediate family members, but are only required to report payments and transfers to owner/investor dentists.
For more information about the definition of an applicable manufacturer or an applicable GPO, visit the Open Payments website.

6. What information will be included in a report?
The report generally will include information about the company, and the following information about the dentist and the payment or transfer:
Information about the dentist:

  • Name
  • Primary business address
  • Email address
  • Type of practice (DDS, MD, DO, DPM, OD or DCP)
  • Individual NPI, if the dentist has one (NPIs will not appear on the public website)
  • Specialty
  • License state and license number
  • Whether the dentist holds an ownership or investment interest in the applicable manufacturer

Information about the payment or transfer:

  • Total amount of payment or transfer (and number of payments included in total amount)
  • Date of payment or transfer
  • Form of payment or transfer:
    • Cash or cash equivalent
    • In-kind items and services
    • Stock, stock options or any other ownership interest
    • Dividend, profit or other return on investment
  • Nature of payment or transfer:
    • Consulting fee
    • Compensation for services other than consulting, including serving as faculty or as a speaker at a venue other than a continuing education program
    • Honoraria
    • Gift
    • Entertainment
    • Food and beverage
    • Travel and lodging
    • Education
    • Charitable contribution
    • Royalty or license
    • Current or prospective ownership or investment interest
    • Compensation for serving as faculty or as a speaker for a nonaccredited and noncertified continuing education program
    • Compensation for serving as faculty or as a speaker for an accredited or certified continuing education program
    • Grant
    • Space rental or facility fees (teaching hospital only)
  • For payments and transfers listed as “travel and lodging,” the city, state and country of travel
  • Whether the payment or transfer was made to a third party at the request of the dentist, and if so:
    • The name of the third party
    • Whether the third party is a charity
    • Whether the third party is a practitioner

The report will also include information about products associated with the payment or transfer.

In addition, a company has the option to add any “contextual information” about the payment or transfer that the company deems helpful or appropriate.

7. Are “indirect” payments and transfers of value reportable?
Generally, yes. For example:

  • If the company makes a reportable payment or transfer to a third party, which then makes the payment or transfer to a dentist, it is generally reportable unless it falls within an exception.
  • If a dentist asks the company to give a reportable payment or transfer to a third party, then, the company will report the usual information (see above), plus the name of the third party, whether the third party is a charity, and whether the third party is a practitioner.

8. How can a dentist keep track of payments and other transfers from companies?
Even though dentists are not required to keep track, a dentist who wishes to do so can use any recordkeeping system that he or she prefers. The government offers a free mobile app for keeping track. For information about the mobile app, see FAQs for Open Payments Mobile for Physicians & Open Payments Mobile for Industry (PDF).

9. How can a dentist find out that a report has been filed?
Starting in early 2014, dentists will be able to register on the Open Payments website. The government will send registered dentists a notice when the reported information is ready for review. The government will use a general online posting, and will provide general notice via listserves from the Centers for Medicare & Medicaid Services (“CMS”).

Some companies may offer dentists the opportunity to review a report before the company submits it to the government. This is called a “pre-submission review.” A dentist may request a pre-submission review to allow more time to review a report and find any errors. However, this process is voluntary and is not overseen by the government.

10. What can a dentist do if a report is inaccurate?
A dentist must request a correction from the company. The government will not mediate disputes over the accuracy of a report.

11. How much time does a dentist have to review a report before it is made public?
Beginning in the second quarter of 2014, dentists will have the opportunity to review a report for a period of 45 days after the company submits the report to the government.

Dentists may ask a company to correct a report at any time after the 45-day period begins, but before the end of the calendar year. However, any changes resulting from changes requested after the 45-day period may not be made until the next time the government refreshes the data on the Open Payments website.

12. What if a dentist and the company are not able to resolve a dispute?
The report will still be published, but it will be marked as disputed.

13. When do the data collection and reporting begin, and when do the reports become publicly available online?
Companies began collecting data about payments and transfers on August 1, 2013. By March 31, 2014, companies must report the data for August through December of 2013 to the government. The government will release the data publicly on the Open Payments website by September 30, 2014.

14. What are the penalties for noncompliance?
There are no penalties for dentists who do not meet the definition of an “applicable manufacturer” or an “applicable GPO” (see above), because only companies that meet these definitions have compliance obligations under the program.

Companies are subject to a penalty of up to $10,000 for each failure to make a timely, accurate and complete report of a payment or transfer, or of an ownership or investment interest, up to an annual cap of $15,000. The government can impose a penalty of up to $100,000 for each knowing failure to make a timely, accurate and complete report, up to an annual cap of $1,000,000.

15. What is meant by an “immediate family member” for purposes of reporting ownership and investment interests?
“Immediate family member” is defined to include:

  • Spouse
  • Natural or adoptive parent, child, or sibling
  • Stepparent, stepchild, stepbrother, or stepsister
  • Father-, mother-, daughter-, son-,brother-, or sister-in-law
  • Grandparent or grandchild
  • Spouse of a grandparent or grandchild

16. What are some things a dentist can do if a company says that a payment or transfer will be reportable?
If a company states that a payment or transfer will be reportable, and the dentist chooses to accept the payment or transfer, the dentist may wish to make a record to make it easier to review the report and request any correction.

In some cases, a dentist may question whether a payment or transfer is truly reportable. This may happen when the dentist is reviewing a report, or it may happen before the dentist accepts a payment or transfer. For example, a company might claim that a payment or transfer would be reportable during contract negotiations, or when resolving a warranty dispute.

To determine whether a company is required to report a payment or transfer, a dentist, in consultation with qualified legal counsel as appropriate, may wish to consider:

  • Does the company meet the definition of an applicable manufacturer (or an applicable GPO in which the dentist or an immediate family member has a reportable ownership or investment interest)? Which of the company’s products are covered by Medicare, Medicaid or CHIP?
  • If there is an existing contract, is the payment or transfer covered by the contract? For example, if training or technical support is included in the contract price, it may not be reportable as a payment or transfer.
  • Is the payment or transfer the result of a warranty? There is an exception for items or services provided under a contractual warranty (including service or maintenance agreements), whether or not the warranty period has expired, including the replacement of a covered device. Such terms of the warranty must be set forth in the purchase or lease agreement for the covered device.
  • Is the information being requested required for reporting purposes?
  • Does the payment or transfer fall within an exception to the reporting requirement?

17. What are some of the exceptions to the reporting requirement?

  • De minimis: Payments and transfers under $10 are not reportable unless the annual aggregate exceeds $100 (companies must still collect information on payments and transfers under $10, but they are only required to report if the annual aggregate exceeds $100). These dollar amounts may be adjusted annually for inflation.
  • Speaker/Faculty at ADA CERP accredited CE: Payments and transfers, including speaker fees, meals, travel and lodging, and educational materials, to speakers and faculty at a CE course accredited by ADA CERP are not reportable if:
  1. The program meets the accreditation or certification requirements of ADA CERP
  2. The company does not directly pay the speaker, and
  3. The company does not select the speaker, and not does provide a list of individuals to be considered as speakers for the CE program.
  • Dentist attendees at ADA CERP accredited CE: Payments and transfers in the form of (1) tuition fees, and (2) educational materials included in CE tuition fees, that are provided to dentist attendees at an ADA CERP accredited CE program are not reportable if the CE program meets the above requirements for speaker/faculty. However, travel and lodging, meals, and educational materials not included in CE tuition fees are still reportable.
  • Food served buffet-style at a large conference or gathering. Companies are not required to report or track buffet meals, snacks, soft drinks, or coffee made available to all participants of a large-scale conference or similar large scale event.
  • Small incidental items that are under $10 (such as pens and note pads) that are provided at large-scale conferences and similar large-scale events. Companies are not required to report such items or track them for aggregation purposes.
  • Loan of a covered device, or provision of a limited quantity of medical supplies for a short-term trial period not to exceed 90 days, to permit evaluation of the device or supply by the dentist.
  • Educational materials/items that directly benefit patients or are intended for use by or with patients (e.g., models and wall charts).
  • Product samples, including coupons and vouchers for samples, that are intended for patient use and that are not intended to be sold.
  • Transfers of value to a dentist who is a patient, research subject, or participant in data collection for research.
  • Discounts, including rebates.
  • In-kind items used for the provision of charity care.

18. Are payments and transfers of value for research reportable?
Yes, and special rules apply to research reports. Research reporting is beyond the scope of this resource, but information is available on theOpen Payments website.

19. If a company makes an indirect payment or transfer to me through my dental society, will my dental society have any reporting obligations? Will my dental society be asked to provide information about me to the company?
Dental societies do not have reporting obligations under the Sunshine Act. However, a company that makes a reportable payment or transfer to a dentist through a dental society must report the payment or transfer. For example, if a company gives money to a dental society for the purpose of funding an award or grant for a dentist, the award or grant may be considered a reportable indirect payment to the dentist. As another example, a company may be required to report meals that it provides to dentists who participate in a continuing education program hosted by a dental society.

In either of the examples stated above, the company might ask the dental society to help collect the information that the company needs to report. The dental society might ask the dentists for information such as name, business address, license number, etc., in order to share the information with the manufacturer for reporting purposes. The dental society might also let dentists know the dollar amount that the company will report for the payment or transfer as well as the form and nature categories that will be reported and other information about how the company plans to report the payment or transfer.

20. Where can I find out more about the Sunshine Act and the Open Payments website?
The Open Payments website currently has information for doctors, teaching hospitals and industry.

CMS has developed a resource called OPEN PAYMENTS: An Overview for Physicians and Teaching Hospitals with information about the Sunshine Act. 

CMS provides FAQs about Open Payments.

Disclaimer 
The foregoing was prepared by the ADA’s Division of Legal Affairs. Its purpose is to promote awareness of legal issues that may affect dentists and dental practices. The law varies from jurisdiction to jurisdiction, and it can change rapidly. This document is not intended to provide either legal or professional advice, and cannot address every federal, state, and local law that could affect a dentist or dental practice. We make no representations or warranties of any kind about the completeness, accuracy, or any other quality of the information in the above piece. Nothing here represents advice or opinion as to any particular situation you may be facing; for that, it is necessary to consult directly with a properly qualified professional or with an attorney admitted to practice in your jurisdiction for appropriate legal or professional advice.

To the extent the above includes links to any websites, the ADA intends no endorsement of their content and implies no affiliation with the organizations that provide their content. Nor does the ADA make any representations or warranties about the information provided on those sites, which we do not control in any way.

© 2013 American Dental Association. All rights reserved. Reproduction of this material by member dentists and their staff for use in the dental office is permitted. Any other use, duplication or distribution by any other party requires the prior written approval of the American Dental Association.

September 4, 2013

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