Statement for the Record  
    
United States Senate Special Committee on Aging 
Roundtable: Let the Sunshine In: Implementing the Physician 
Payments Sunshine Act 
 
 
 
 
 
 
 
 
  Physician Payment Reporting Provisions  
  in Corporate Integrity Agreements 
 
 
   
Statement of: 
December 7, 2011 
 
10 a.m. 
Gregory E. Demske 
Rayburn Building, Room 2154 
Chief Counsel 
 
Office of Inspect or General 
U.S. Department of Health and Human Services 
 
 
 
 
 
September 12, 2012 
 
2:30 p.m. 
 
Dirksen Senate Office Building, Room 562    Statement of Gregory E. Demske  
Chief Counsel  
Office of Inspector General  
Department of Health and Human Services  
 
PHYSICIAN PAYMENT REPORTING PROVISIONS  
IN CORPORATE INTEGRITY AGREEMENTS 
 
This statement summarizes the history and evolution of corporate integrity agreement (CIA) 
provisions that require drug and device manufacturers to report information about payments 
that they make to physicians. 
 
The Department of Health and Human Services Office of Inspector General (OIG) has long 
recognized the importance of transparency about financial relationships between physicians 
and health care companies, including manufacturers of drugs and medical devices.  OIG has 
emphasized the benefits of transparency in testimony before Congress.  See, e.g., Testimony 
of Lewis Morris to House Committee on Ways and Means, Subcommittees on Health and 
Oversight, June 15, 2010, and Testimony of Gregory E. Demske to Senate Special 
Committee on Aging, February 27, 2008.   
 
OIG has required transparency about the payments of drug and device manufacturers to 
physicians through CIAs entered as part of fraud settlements with specific manufacturers.  As 
OIG has stated in prior testimony, the requirement of public disclosure of these payments 
will help the Government, as well as the health care industry and the public, to monitor 
relationships and should have a sentinel effect to deter kickbacks and other inappropriate 
payment relationships. 
 
In recent years, the U.S. Government (working through the Department of Justice and OIG) 
has entered numerous settlements with drug and device manufacturers to resolve allegations 
that the companies defrauded Medicare, Medicaid, and other Federal health care programs.  
OIG routinely requires drug and device manufacturers to enter CIAs with OIG as a condition 
for permitting the manufacturers to continue to do business with the Federal Government.  
Although CIAs contain many standard terms, they are negotiated documents that vary 
according to the particular entity, the alleged fraud, and relevant risk areas.  Among other 
things, CIAs require the manufacturers to establish or maintain comprehensive compliance 
programs that include designating a compliance officer, establishing policies and procedures, 
training, and auditing.  The CIAs also require the manufacturers to report certain information 
to OIG, and OIG monitors the manufacturers compliance with the terms of the CIAs.   
 
OIG understands that drug and device manufacturers routinely have financial relationships 
with physicians.  There are legitimate reasons that such relationships may exist, but many 
such relationships may be suspect under existing fraud and abuse laws or may otherwise 
create conflicts of interest.  OIG has concerns about any relationship that raises the inference 
that the manufacturer is paying the physician, in part, to influence the physician to use, 
recommend, or prescribe the manufacturers products.  In 2008, OIG began to require more 
transparency about the relationships between manufacturers and physicians through its CIAs 
with such entities.  These CIAs require the manufacturers to post on their company Web sites 
information about payments they make to physicians.  Manufacturers must post the 
information on both a quarterly and an annual basis.  The specifics of the requirement have  changed over time in different CIAs, but OIG has continued to include a public disclosure 
requirement, where appropriate, in CIAs with drug and device manufacturers.  To date, the 
payment-posting provisions have been included in 15 CIAs with drug and device 
manufacturers.1   
 
The early CIAs containing the payment-posting provisions predated the passage of section 
6002 of the Patient Protection and Affordable Care Act (ACA) (also known as the Sunshine 
requirements).  Accordingly, the definition of the term payments used in the early CIAs 
was not based on a statutory standard.  Following the passage of ACA, OIG aligned the 
definition of payments in CIAs with the definition of payments in section 6002 of ACA 
to minimize confusion and inconsistency that could be caused by different definitions.  
Current CIAs explicitly define payments for CIA purposes to include all payments or 
other transfers of value as those terms are defined in section 6002 of ACA and any 
regulations promulgated thereunder.    
 
OIG has occasionally received questions from the manufacturers under CIAs about the 
payment-posting requirements.  To the extent that OIG received specific questions about how 
manufacturers should interpret the definition of payment for purposes of the CIAs, OIG has 
generally answered such questions with the caveat that manufacturers must follow the 
definition of payments as set forth in section 6002 of ACA and any implementing 
regulations.   
 
Section 6002 of ACA requires that the Centers for Medicare & Medicaid Services (CMS) 
consult with OIG on implementing its provisions.  CMS has consulted with OIG in 
developing its regulations, as required by the statute.   
 
OIG remains committed to preventing and detecting fraud and abuse, to using CIAs 
effectively to promote compliance, and to working with internal and external stakeholders to 
ensure the integrity of the Federal health care programs. 
                                                 
1 The testimony and CIAs referenced in this statement may be found on the OIG Web site at: 
http://www.oig.hhs.gov.