Physician Payments Sunshine Act

Key facts

Enacted

March 2010, Section 6002 of the Patient Protection and Affordable Care Act

Codified at

Social Security Act Section 1128G (42 U.S.C. 1320a-7h)

Implementing rule

CMS final rule published February 2013; 42 CFR Part 403, Subpart I

Program name

CMS Open Payments

Expanded by

SUPPORT for Patients and Communities Act of 2018

What is the Physician Payments Sunshine Act?

The Sunshine Act is a disclosure law. It does not ban industry payments to clinicians; it requires applicable manufacturers and group purchasing organizations to report them to the Centers for Medicare and Medicaid Services (CMS), which publishes the data through the Open Payments program.

The law grew out of bills introduced by Senators Chuck Grassley and Herb Kohl and was included in the Affordable Care Act. CMS issued the final implementing rule in February 2013, data collection began on August 1, 2013, and the first data was published in 2014.

How the Sunshine Act works

Reporting obligations come from three layers of rules:

The statute sets civil monetary penalties of $1,000 to $10,000 per unreported payment, up to $150,000 a year, and $10,000 to $100,000 per payment for knowing failures, up to $1,000,000 a year. These amounts are adjusted for inflation.

The SUPPORT for Patients and Communities Act of 2018 extended reporting to payments to physician assistants, nurse practitioners and several other advanced practice clinicians, beginning with data for 2021.

• Statute: Section 1128G of the Social Security Act defines who reports, what is reported and the penalties.
• Regulation: 42 CFR Part 403, Subpart I sets detailed definitions, exclusions, deadlines and dispute procedures.
• Guidance: CMS user guides and FAQs explain reporting practice but do not carry the force of regulation.

Why the Sunshine Act matters

For manufacturers, the law drives spend tracking: every reportable meal, consulting fee, travel reimbursement and research payment to a covered recipient must be captured with recipient identifiers and reported each year. Errors become public, and recipients can dispute records before publication.

For analysts, journalists and compliance teams, the resulting data shows which companies pay which clinicians and for what. It is a common starting point for mapping key opinion leader relationships and for research on conflicts of interest.

Sunshine Act vs state laws and the Anti-Kickback Statute

The federal law preempts state laws that require reporting of the same type of information, but states can still require additional disclosures, and some, such as Vermont and Massachusetts, also restrict certain gifts and payments. Disclosure does not make a payment lawful: the federal Anti-Kickback Statute still prohibits knowingly offering or paying anything of value to induce or reward prescriptions or referrals of items covered by federal health care programs.