The Other Side of the Sun Compliance for Healthcare Providers

As explained in the preceding article, Congress is in the process of formulating additional reporting requirements for pharmaceutical and medical device manufacturers. Although healthcare providers have no direct reporting obligations under the proposed statute absent an ownership interest in a private company subject to the statute, providers will be affected as information on received compensation will be publicly available. This article offers suggestions to protect providers and ensure the accuracy of any information ultimately disclosed pursuant to the proposed statute.

Recommended Actions

1) Compliance Plan Update

Although not directly responsible for reporting, healthcare systems, hospitals, and physician offices should take actions to help satisfy their own compliance obligations. Certainly, the first order of business is to include appropriate language in the organization’s compliance plan. From there, policies and procedures should be established to provide guidelines for contract approval and review — including legal review — and appointing the individual(s) with ultimate authority for executing the contract. By limiting the number of individuals authorized to execute agreements, accompanied with those individuals requiring legal review as a condition precedent to signing, healthcare providers can substantially decrease their risk. Contemporaneous staff education is crucial to this process. Healthcare providers should not only properly educate their staff regarding any such updates, documentation of such efforts should be maintained in support thereof.

Inherent in this process is a decision-making opportunity. Coupled with recent industry moves such as the recently-revised PhRMa Code on Interactions with Healthcare Professionals, organizations should engage in an extensive review of current practices to help ensure proper compliance.

2) Physician Self-Disclosure Form

Further recommended steps include maintaining appropriate documentation and records evidencing any applicable financial arrangement(s). To that end, healthcare providers specifically should require their medical staff members to disclose any and all such reportable relationships. Healthcare providers that employ physicians may incorporate these activities through their human resource functions in addition to, or in lieu of, the medical staff route. Such disclosures should occur at least once during each re-credentialing cycle, if not annually, with physicians required to report additions and/or deletions immediately. All such disclosures should be noted and tracked, in conjunction with the healthcare provider’s current conflict of interest management activities, so that purchases can be properly monitored and handled.

3) Contract Negotiations

When negotiating purchase agreements, healthcare providers should be mindful of these reporting requirements. Including contractual language whereby the manufacturer represents and warrants that any and all applicable financial relationships have been disclosed is advisable. Doing so will bolster the organization’s compliance efforts. Similarly, doing so will help the organization manage not only its agreements with manufacturers, but also its agreements with physicians who may have a financial relationship with a particular manufacturer from whom the organization seeks to make purchases. To help avoid potential Stark and/or Anti-Kickback Statute entanglements, proper documentation of the products purchased and the fair market value of such is extremely important — yet another good reason to have sound contract review, approval, and execution policies in place.

4) Monitoring Websites

In an effort to bolster the proffered goal of transparency, the government ultimately intends to post reportable transactions on a website, and several manufacturers have already voluntary begun this process. Healthcare providers would do well to monitor these websites. Doing so will help confirm the accuracy of the information gathered as well as provide a helpful defense should a transaction arise that, for some reason, does not appear on any of the various website postings. To the extent such information will be readily available, it must be monitored, mined, and properly utilized.


As currently drafted, the Sunshine Act will require hospitals, health systems, and physician offices to be even more diligent in their compliance efforts. Th e days of not knowing or not asking for such information are already gone. Taking (at least) the steps outlined above will increase healthcare providers’ knowledge regarding their financial dealings with physicians and manufacturers. This knowledge should help healthcare providers make more informed decisions while managing their organizations.