The Centers for Medicare & Medicaid Services (CMS) issued updated guidance on the thresholds that Applicable Manufacturers and Group Purchasing Organizations are required to report annually under the Sunshine Act (42 U.S.C. § 1320a-7h; 42 C.F.R. Part 403 et. seq.). Specifically, if Applicable Manufacturers or Group Purchasing Organizations spend $11.04 or less, an increase from $10.49 in 2020, on a Reportable Activity for a given Covered Recipient from January 1, 2021 – December 31, 2021, the payment will not need to be reported unless the payments to a Covered Recipient exceeds $110.40, an increase from $109.69 in 2020, in the aggregate for the reportable calendar year. If the aggregate sum is exceeded for a given Covered Recipient during the reportable calendar year, all payments or other transfers of value made to that Covered Recipient must be reported. CMS updates its de minimis threshold on an annual basis based on the consumer price index.
The Sunshine Act requires Applicable Manufacturers and Group Purchasing Organizations to report payments or other transfers of value to Covered Recipients.
Applicable Manufacturers and Group Purchasing Organization must report:
Applicable Manufacturers and Group Purchasing Organization must report data from the prior calendar year by to CMS by March 31st each year.
Failure to timely, accurately or completely report the required information under Open Payments may subject a Applicable Manufacturer or Applicable Group Purchasing Organization to Civil Monetary Penalties (CMPs) of not less than $1,000, but not more than $10,000, as adjusted annually, for each payment or other transfer of value or ownership investment interest not reported timely, accurately, or completely. The total amount of CMPs imposed on an Applicable Manufacturer or an Applicable Group Purchasing Organization annually will not exceed $150,000, as adjusted annually (See 42 CFR § 403.912(a)).
Knowing failure to timely, accurately or completely report the required information under Open Payments may subject a Applicable Manufacturer or Applicable Group Purchasing Organization to CMPs of not less than $10,000, but not more than $100,000, as adjusted annually, for each payment or other transfer of value, or ownership or investment interest not reported timely, accurately, or completely. The total amount of CMPs imposed on an Applicable Manufacturer or an Applicable Group Purchasing Organization annually will not exceed $1,150,000, as adjusted annually (See 42 CFR § 403.912(b)).
Enforcement: U.S. Department of Justice Settlement with Medtronic
The U.S. Department of Justice (DOJ) announced on October 29, 2020 it reached a more than $9.2 million settlement with Medtronic USA Inc. to resolve allegations it violated the Open Payment Program and the False Claims Act (FCA). In relevant part, Medtronic agreed to pay an additional $1,110,000 to resolve allegations that the medical device manufacturer violated the Open Payments Program by failing to accurately report to CMS payments it made to a neurosurgeon in connection with Medtronic sponsored social events at a restaurant owned by the physician and his wife.
If you have any questions related to Open Payments or its state law equivalents, please reach out to your Foley advisor for assistance.