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Sunshine Regulations to Unmask PODs' Financial Relationships

Ronald L. Wisor, Jr.

Ronald L. Wisor, Jr.,

Washington, D.C.

Tom Bulleit

Sara A. Kraner

18 March 2013
The final Sunshine regulations, published in the Federal Register on February 8, require applicable manufacturers (“AMs”) and applicable GPOs (“AGPOs”) to submit reports on physician ownership and investment interests.  Notably, the regulations require physician-owned distributors of covered products (including implantable medical devices) (“PODs”) to collect and report information on their financial relationships with their physician owners.

In general, the regulation tracks the statute in requiring AMs and AGPOs to annually report direct or indirect ownership and investment interests held by physicians and their immediate family members.  These reports are in addition to those for payments and other transfers of value made to physicians under § 403.904 of the regulations. 

The regulatory preamble specifically notes on several occasions that distributors (including PODs) are AMs if they take title (buy-and-resell or “stocking distributor” PODs).  All other POD models are AGPOs under the new law, whether they purchase product or negotiate prices/arrange for purchase in exchange for commissions or administrative fees. The preamble goes on to state that CMS “intend[s] for [the definition of AGPO] to capture as many PODs as possible, while still aligning with the statutory language.”  Accordingly, when the obligation to collect data on payments and ownership interests takes effect (August 1, 2013), all PODs will be obliged to collect this information and report annually on the full extent of their financial relationships with owner physicians, and PODs that are AMs will be obligated to report not only financial relationships with owner physicians, but also payments or transfers of value to all physicians, whether or not the physicians have ownership interests.  See our Health Alert, Key issues concerning PODs under the federal Sunshine Law, for more information. 

Ronald L. Wisor, Jr.

Ronald L. Wisor, Jr.,

Washington, D.C.

Tom Bulleit

Sara A. Kraner

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