The Physician Payment Sunshine Act - an understanding

The Physician Payment Sunshine Act, also called Physician Payments Act, is a piece of legislation passed by the American Congress in 2010. It came to be enacted along with the Affordable Care Act, or Obamacare. The purpose of this legislation is to ensure transparency in the financial relationships that exist between the pharmaceutical industry, teaching hospitals, and physicians.


What the Sunshine Act requires is this: Manufacturers of drugs and medical devices, and organizations that purchase in groups (Group Purchasing Organizations or PGO's) have to report payments or their equivalent that they make to physicians and teaching hospitals. Items that are considered equivalent to money payments, transfers of which have to be reported are clearly mentioned. These include the following:

  • Meals
  • Honoraria or grants
  • Gifts
  • Entertainment
  • Speaking fees
  • Writing services, such as research papers or manuscripts
  • Travel reimbursements
  • Purchase of items such as teaching materials and journals, which are paid either directly to physicians or teaching hospitals, supplied either directly or through a third party
  • Funding for research

Another core reporting requirement


Another requirement of the Sunshine Act is that when manufacturers of drugs and medical devices and group purchasing organizations have physicians who have a stake in some or another form in their organizations; this has to be reported to the Centers for Medicare and Medicaid Services (CMS). These reporting requirements apply to all kinds of physicians, who are either specialists or are general practitioners.

However, the following are excluded from reporting by the Sunshine Act:

  • Nurses
  • Support and office staff
  • Residents
  • Medical students
  • Physicians assistance
  • Advance practice nurses

Physicians need not report

The Sunshine Act requires information about these payments and transfers to be made by the paying medical device and drug companies, and not by physicians. Physicians, however, need to supply supporting documentation and other information to the manufacturer or third party, when asked for.