Sunshine Act Summary > Michigan State Medical Society


Sunshine Act Summary

While a healthy relationship between medical professionals and the pharmaceutical industry are extremely important to the advancement of medicine and patient care, the Sunshine Act ensures that physicians are not receiving money and subsidies for questionable purposes. The law requires drug and device companies to disclose, in a public database, all payments to individual physicians for consulting and other services.


The Physician Payments Sunshine Act, is part of the Affordable Care Act (ACA). This legislation requires manufacturers of drugs, medical devices, and participates in U.S. federal health care programs to report certain payments and items of value given to physicians and teaching hospitals. Manufacturers will be required to submit the reports to the Centers for Medicare & Medicaid Services (CMS) annually. The majority of the information contained in the reports will be available on a public, searchable website. Physicians have the right to review their reports and to challenge those reports that are false, inaccurate, or misleading. The reports provide patients and the public with information on the financial interactions of physicians and industry.

These interactions are said to often drive innovation, discovery, and changes in medical practice that may promote better patient outcomes.


Issues that physicians need to understand about the key provisions of the Physician Payment Sunshine Act include the following:

  • Financial Transfers: All manufacturers of a drug, device, biological, or medical supplies participating in federal health care programs will have to report to CMS any direct payments or transfers of value to physicians and/or teaching hospitals of $10 or more.
  • Ownership: All manufacturers and GPOs participating in federal health care programs will have to report to CMS certain ownership interests held by physicians and their close family members.
  • Pubic Reports: The majority of the information contained in the transparency reports will be available on a public, searchable website. Physicians will be provided, at a minimum, 45 days to review the transparency reports and make corrections before they are made public.


As stated in the policy manual for Michigan State Medical Society (Res132-HOD99A):

"MSMS supports the disclosure by physicians to their patients and their families any possible conflict of interest from the source of payment to the physician, incentive or reimbursement for services rendered in their care."


The American Medical Association ("AMA") has adopted guidelines for physician financial transparency reports. The AMA guidelines state that any gifts accepted by physicians individually should entail a benefit to patients and should not be of significant value.

The American Medical Association (AMA) has issued frequently asked questions addressing certain issues concerning the Sunshine Act. For Example:

Q: What is being reported?

A: Payments, transfers of items that have value, and ownership interests. Manufacturers must specify the nature of the payment or transfer of value and are required to report on ownership interests held by physicians and their immediate family members. The transparency report must include the dollar amount invested, the value, and terms of ownership or investment interest, and any payment provided to physician owner or investor.

Q: What is exempt from reporting?

A: Samples are exempt as long as they are provided to patients. Educational materials that benefit patients are exempt, medical journal re-prints will probably be exempt, but this will be clarified in the implementing regulations. Meals will not be exempt (unless under $10), but meals will count regardless if the total in a reporting year cumulatively is valued at $100 or more.  Also, any payment or transfers of value are subject to reporting.


PhRMA has developed a Code on relationships with U.S. healthcare professionals. This Code builds upon the standards and principles set forth and addresses interactions with respect to marketed products and related pre-launch activities. The Code of conduct consists of 13 mandatory guidelines that pharmaceutical professionals and others in the industry are to follow.


Some physicians claim that this will reduce the quality of care physicians give to their patients due to their apprehension of working with pharmaceutical companies, which may result in harming patients further.  This may also mean that there may be less pharmaceutical involvement in physician education. For those in opposition of this bill, some fear that the database will create the impression that any physician who appears on the list, no matter the financial or legitimate nature of the interaction, is somehow engaged in behavior that could be seen as ethically or legally unjust.  Rather than encourage transparency, CMS’ final rule could have a negative effect on beneficial interactions between doctors and researchers that help advance medicine.


On January 22 2013, Sen. Chuck Grassley (R-Iowa) sent a letter to the White house requesting immediate action be taken on writing the final legislation. In the letter drafted to Jacob Lew, the Chief of Staff to the President, Grassley states, "Congress designed the law so that the data would be publicly available by Sept. 30, 2013. At best, the public may miss an entire year's worth of data collection -- perhaps more. This is unacceptable."


The final rule requires manufactures and GPOs to report the first round of data collection to the CMS by March 31, 2014. The data will then be posted online by Sept. 30, 2014. This legislation was passed nearly one year after what the original act required.  The first round of reporting will be limited to five months of data rather than a full year.

This increased transparency is projected to help lessen the possible conflicts of interest that physicians or teaching hospitals could face as a result of their relationships with manufacturers.

Useful Links:

The AMA guidelines:

The PhRMA guidelines:

Senator Grassley’s letter to Jacob Lew:

The CMS Press Release:

The final rule can be downloaded at: 

[1] "Physician Financial Transparency Reports (Sunshine Act)." American Medical Association. American Medical Association, 2013. Web. 29 Jan. 2013.

[2] "Physician Financial Transparency Reports (Sunshine Act)." American Medical Association. American Medical Association, 2013. Web. 29 Jan. 2013.

[3] "Code on Interactions With Healthcare Professionals." PhRMA. PhRMA, n.d. Web. 29 Jan. 2013.

[4] Sullivan, Thomas. "Physician Payment Sunshine Act ." Policy and Medicine. N.p., n.d. Web. 22 Jan. 2013.

[5] Grassley, Charles E. "CEG to JLEW- Sunshine." Letter to Mr. Jacob Lew. 22 Jan. 2013. Electronic Transmission.

[6] Lee, Jaimy. "CMS issues long-delayed rule on Sunshine Act." Modern Healthcare 1 Feb. 2013: 1-2. Web. 4 Feb. 2013.

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