I 

111TH CONGRESS 

1ST SESSION H. R. 3138 

To amend title XI of the Social Security Act to provide for transparency 

in the relationship between physicians and manufacturers of drugs, devices, biologicals, or medical supplies for which payment is made under 

Medicare, Medicaid, or SCHIP. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 9, 2009 

Mr. HILL introduced the following bill; which was referred to the Committee 

on Energy and Commerce, and in addition to the Committee on Ways 

and Means, for a period to be subsequently determined by the Speaker, 

in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To amend title XI of the Social Security Act to provide 

for transparency in the relationship between physicians 

and manufacturers of drugs, devices, biologicals, or medical supplies for which payment is made under Medicare, 

Medicaid, or SCHIP. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Physician Payments 

5 Sunshine Act of 2009’’. 


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1 SEC. 2. TRANSPARENCY REPORTS AND REPORTING OF 

2 PHYSICIAN OWNERSHIP OR INVESTMENT IN3 TERESTS. 

4 Part A of title XI of the Social Security Act (42 

5 U.S.C. 1301 et seq.) is amended by inserting after section 

6 1128F the following new section: 

7 ‘‘SEC. 1128G. TRANSPARENCY REPORTS AND REPORTING 

8 OF PHYSICIAN OWNERSHIP OR INVESTMENT 

9 INTERESTS. 

10 ‘‘(a) TRANSPARENCY REPORTS.— 

11 ‘‘(1) PAYMENTS OR OTHER TRANSFERS OF

12 VALUE.— 

13 ‘‘(A) IN GENERAL.—Except as provided in 

14 subsection (e), not later than March 31 of each 

15 year (beginning with 2012), any applicable 

16 manufacturer that provides a payment or other 

17 transfer of value to a covered recipient (or to 

18 an entity or individual at the request of or des19 ignated on behalf of a covered recipient), shall 

20 submit to the Secretary, in such electronic form 

21 as the Secretary shall require, the following in22 formation with respect to the preceding cal23 endar year: 

24 ‘‘(i) The name of the covered recipi25 ent. 


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1 ‘‘(ii) The business address of the cov2 ered recipient and, in the case of a covered 

3 recipient who is a physician, the specialty 

4 and National Provider Identifier of the 

5 covered recipient. 

6 ‘‘(iii) The value of the payment or 

7 other transfer of value. 

8 ‘‘(iv) The dates on which the payment 

9 or other transfer of value was provided to 

10 the covered recipient. 

11 ‘‘(v) A description of the form of the 

12 payment or other transfer of value, indi13 cated (as appropriate for all that apply) 

14 as— 

15 ‘‘(I) cash or a cash equivalent; 

16 ‘‘(II) in-kind items or services; 

17 ‘‘(III) stock, a stock option, or 

18 any other ownership interest, divi19 dend, profit, or other return on invest20 ment; or 

21 ‘‘(IV) any other form of payment 

22 or other transfer of value (as defined 

23 by the Secretary). 

24 ‘‘(vi) A description of the nature of 

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1 dicated (as appropriate for all that apply) 

2 as— 

3 ‘‘(I) consulting fees; 

4 ‘‘(II) compensation for services 

5 other than consulting; 

6 ‘‘(III) honoraria; 

7 ‘‘(IV) gift; 

8 ‘‘(V) entertainment; 

9 ‘‘(VI) food; 

10 ‘‘(VII) travel; 

11 ‘‘(VIII) education; 

12 ‘‘(IX) research; 

13 ‘‘(X) charitable contribution; 

14 ‘‘(XI) royalty or license; 

15 ‘‘(XII) current or prospective 

16 ownership or investment interest; 

17 ‘‘(XIII) compensation for serving 

18 as faculty or as a speaker for a con19 tinuing medical education program; 

20 ‘‘(XIV) grant; or 

21 ‘‘(XV) any other nature of the 

22 payment or other transfer of value (as 

23 defined by the Secretary). 

24 ‘‘(vii) If the payment or other transfer 

25 of value is related to marketing, education, 


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1 or research specific to a covered drug, de2 vice, biological, or medical supply, the 

3 name of that covered drug, device, biologi4 cal, or medical supply. 

5 ‘‘(viii) Any other categories of infor6 mation regarding the payment or other 

7 transfer of value the Secretary determines 

8 appropriate. 

9 Such reports may be submitted at the holding 

10 company or divisional level at the manufactur11 er’s discretion. 

12 ‘‘(B) AGGREGATE REPORTING.—Informa13 tion submitted by an applicable manufacturer 

14 under subparagraph (A) shall include the ag15 gregate amount of all payments or other trans16 fers of value provided by the applicable manu17 facturer to covered recipients (and to entities or 

18 individuals at the request of or designated on 

19 behalf of a covered recipient) during the pre20 ceding year. 

21 ‘‘(C) SPECIAL RULE FOR CERTAIN PAY22 MENTS OR OTHER TRANSFERS OF VALUE.—In 

23 the case where an applicable manufacturer pro24 vides a payment or other transfer of value to an 

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1 ignated on behalf of a covered recipient, the ap2 plicable manufacturer shall disclose that pay3 ment or other transfer of value under the name 

4 of the covered recipient. 

5 ‘‘(2) PHYSICIAN OWNERSHIP.—In addition to 

6 the requirement under paragraph (1)(A), not later 

7 than March 31 of each year (beginning with 2012) 

8 any applicable manufacturer, applicable group pur9 chasing organization, or applicable distributor shall 

10 submit to the Secretary, in such electronic form as 

11 the Secretary shall require, the following information 

12 regarding any ownership or investment interest 

13 (other than an ownership or investment interest in 

14 a publicly traded security and mutual fund, as de15 scribed in section 1877(c)) held by a physician (or 

16 an immediate family member of such physician (as 

17 defined for purposes of section 1877(a))) in the ap18 plicable manufacturer, applicable group purchasing 

19 organization or applicable distributor during the pre20 ceding year: 

21 ‘‘(A) The dollar amount invested by each 

22 physician holding such an ownership or invest23 ment interest. 

24 ‘‘(B) The value and terms of each such 

25 ownership or investment interest. 


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1 ‘‘(C) Any payment or other transfer of 

2 value provided to a physician holding such an 

3 ownership or investment interest (or to an enti4 ty or individual at the request of or designated 

5 on behalf of a physician holding such an owner6 ship or investment interest), including the infor7 mation described in clauses (i) through (viii) of 

8 paragraph (1)(A), except that in applying such 

9 clauses, ‘physician’ shall be substituted for ‘cov10 ered recipient’ each place it appears. 

11 ‘‘(D) Any other information regarding the 

12 ownership or investment interest the Secretary 

13 determines appropriate. 

14 ‘‘(b) PENALTIES FOR NONCOMPLIANCE.— 

15 ‘‘(1) FAILURE TO REPORT.— 

16 ‘‘(A) IN GENERAL.—Subject to subpara17 graph (B), except as provided in paragraph (2), 

18 any applicable manufacturer, applicable group 

19 purchasing organization, or applicable dis20 tributor that fails to submit information re21 quired under subsection (a) in a timely manner 

22 in accordance with rules or regulations promul23 gated to carry out such subsection, shall be sub24 ject to a civil money penalty of not less than 

25 $1,000, but not more than $10,000, for each 


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1 payment or other transfer of value or ownership 

2 or investment interest not reported as required 

3 under such subsection. Such penalty shall be 

4 imposed and collected in the same manner as 

5 civil money penalties under subsection (a) of 

6 section 1128A are imposed and collected under 

7 that section. 

8 ‘‘(B) LIMITATION.—The total amount of 

9 civil money penalties imposed under subpara10 graph (A) with respect to each annual submis11 sion of information under subsection (a) by an 

12 applicable manufacturer, applicable group pur13 chasing organization, or applicable distributor 

14 shall not exceed $150,000. 

15 ‘‘(2) KNOWING FAILURE TO REPORT.— 

16 ‘‘(A) IN GENERAL.—Subject to subpara17 graph (B), any applicable manufacturer, appli18 cable group purchasing organization, or applica19 ble distributor that knowingly fails to submit 

20 information required under subsection (a) in a 

21 timely manner in accordance with rules or regu22 lations promulgated to carry out such sub23 section, shall be subject to a civil money penalty 

24 of not less than $10,000, but not more than 

25 $100,000, for each payment or other transfer of 


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1 value or ownership or investment interest not 

2 reported as required under such subsection. 

3 Such penalty shall be imposed and collected in 

4 the same manner as civil money penalties under 

5 subsection (a) of section 1128A are imposed 

6 and collected under that section. 

7 ‘‘(B) LIMITATION.—The total amount of 

8 civil money penalties imposed under subpara9 graph (A) with respect to each annual submis10 sion of information under subsection (a) by an 

11 applicable manufacturer, applicable group pur12 chasing organization, or applicable distributor 

13 shall not exceed $1,000,000. 

14 ‘‘(3) USE OF FUNDS.—Funds collected by the 

15 Secretary as a result of the imposition of a civil 

16 money penalty under this subsection shall be used to 

17 carry out this section. 

18 ‘‘(c) PROCEDURES FOR SUBMISSION OF INFORMA19 TION AND PUBLIC AVAILABILITY.— 

20 ‘‘(1) IN GENERAL.— 

21 ‘‘(A) ESTABLISHMENT.—Not later than 

22 June 1, 2011, the Secretary shall establish pro23 cedures— 

24 ‘‘(i) for applicable manufacturers, ap25 plicable group purchasing organizations, 


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1 and applicable distributors to submit infor2 mation to the Secretary under subsection 

3 (a); and 

4 ‘‘(ii) for the Secretary to make such 

5 information submitted available to the pub6 lic. 

7 ‘‘(B) DEFINITION OF TERMS.—The proce8 dures established under subparagraph (A) shall 

9 provide for the definition of terms (other than 

10 those terms defined in subsection (g)), as ap11 propriate, for purposes of this section. 

12 ‘‘(C) PUBLIC AVAILABILITY.—The proce13 dures established under subparagraph (A)(ii) 

14 shall ensure that, not later than September 30, 

15 2012, and on June 30 of each succeeding cal16 endar year, the information submitted under 

17 subsection (a) with respect to the preceding cal18 endar year is made available through an Inter19 net website that— 

20 ‘‘(i) is searchable and is in a format 

21 that is clear and understandable; 

22 ‘‘(ii) contains information that is pre23 sented by the name of the applicable man24 ufacturer, applicable group purchasing or25 ganization, or applicable distributor, the 


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1 name of the covered recipient, the business 

2 address of the covered recipient, the spe3 cialty of the covered recipient, the value of 

4 the payment or other transfer of value, the 

5 date on which the payment or other trans6 fer of value was provided to the covered re7 cipient, the form of the payment or other 

8 transfer of value, indicated (as appro9 priate) under subsection (a)(1)(A)(v), the 

10 nature of the payment or other transfer of 

11 value, indicated (as appropriate) under 

12 subsection (a)(1)(A)(vi), and the name of 

13 the covered drug, device, biological, or 

14 medical supply, as applicable; 

15 ‘‘(iii) contains information that is able 

16 to be easily aggregated and downloaded; 

17 ‘‘(iv) contains a description of any en18 forcement actions taken to carry out this 

19 section, including any penalties imposed 

20 under subsection (b), during the preceding 

21 year; 

22 ‘‘(v) contains background information 

23 on industry-physician relationships; 

24 ‘‘(vi) in the case of information sub25 mitted with respect to a payment or other 


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1 transfer of value described in subsection 

2 (e), lists such information separately from 

3 the other information submitted under 

4 subsection (a) and designates such sepa5 rately listed information as funding for 

6 clinical research; 

7 ‘‘(vii) contains any other information 

8 the Secretary determines would be helpful 

9 to the average consumer; and 

10 ‘‘(viii) provides the covered recipient 

11 an opportunity to submit corrections to the 

12 information made available to the public 

13 with respect to the covered recipient. 

14 ‘‘(2) CONSULTATION.—In establishing the pro15 cedures under paragraph (1), the Secretary shall 

16 consult with the Inspector General of the Depart17 ment of Health and Human Services, affected indus18 try, consumers, consumer advocates, and other inter19 ested parties in order to ensure that the information 

20 made available to the public under such paragraph 

21 is presented in the appropriate overall context. 

22 ‘‘(d) ANNUAL REPORTS AND RELATION TO STATE

23 LAWS.— 

24 ‘‘(1) ANNUAL REPORT TO CONGRESS.—Not 

25 later than April 1 of each year beginning with 2012, 


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1 the Secretary shall submit to Congress a report that 

2 includes the following: 

3 ‘‘(A) The information submitted under 

4 subsection (a) during the preceding year, aggre5 gated for each applicable manufacturer and ap6 plicable group purchasing organization that 

7 submitted such information during such year. 

8 ‘‘(B) A description of any enforcement ac9 tions taken to carry out this section, including 

10 any penalties imposed under subsection (b), 

11 during the preceding year. 

12 ‘‘(2) ANNUAL REPORTS TO STATES.—Not later 

13 than April 1 of each year beginning with 2012, the 

14 Secretary shall submit to States a report that in15 cludes a summary of the information submitted 

16 under subsection (a) during the preceding year with 

17 respect to covered recipients in the State. 

18 ‘‘(3) RELATION TO STATE LAWS.— 

19 ‘‘(A) IN GENERAL.—Effective on January 

20 1, 2010, subject to subparagraph (B), the pro21 visions of this section shall preempt any law or 

22 regulation of a State or of a political subdivi23 sion of a State that requires an applicable man24 ufacturer (as defined in subsection (g)) to dis25 close or report information in the categories (as 


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1 described in subsection (a)) and the exclusions 

2 in (g)(11)(B) regarding a payment or other 

3 transfer of value provided by the applicable 

4 manufacturer to a covered recipient (as so de5 scribed), including such laws or regulations that 

6 impose different schedules or frequency of re7 porting (including the timing of reporting of 

8 payments made pursuant to product develop9 ment agreements and clinical investigations as 

10 provided under subsection (e)), threshold 

11 amounts for reporting of such payments or 

12 transfers of value, reporting formats, or defini13 tions of covered recipients. 

14 ‘‘(B) NO PREEMPTION OF ADDITIONAL RE15 QUIREMENTS.—Subparagraph (A) shall not 

16 preempt any law or regulation of a State or of 

17 a political subdivision of a State that requires 

18 the disclosure or reporting of information not 

19 required to be disclosed or reported under this 

20 section to the extent such information is not 

21 specifically excluded from the reporting require22 ments under subsection (g)(11)(B). 

23 ‘‘(e) DELAYED REPORTING FOR PAYMENTS MADE

24 PURSUANT TO PRODUCT RESEARCH AND DEVELOPMENT

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1 VELOPMENT RESEARCH.—In the case of a payment or 

2 other transfer of value made to a covered recipient by an 

3 applicable manufacturer pursuant to a product research 

4 and development agreement for services furnished in con5 nection with research of a potential new medical tech6 nology or application, the development of a new drug, de7 vice, biological, or medical supply, or by an applicable 

8 manufacturer in connection with a clinical investigation, 

9 the applicable manufacturer may report the value of such 

10 payment or other transfer of value in the first reporting 

11 period under subsection (a) after the earlier of the fol12 lowing: 

13 ‘‘(1) The date of the approval or clearance of 

14 the covered drug, device, biological, or medical sup15 ply by the Food and Drug Administration. 

16 ‘‘(2) Four calendar years after the date such 

17 payment or other transfer of value was made. 

18 ‘‘(f) IMPLEMENTATION.—The Secretary shall consult 

19 with the Inspector General of the Department of Health 

20 and Human Services on the implementation of this sec21 tion. 

22 ‘‘(g) DEFINITIONS.—In this section: 

23 ‘‘(1) APPLICABLE DISTRIBUTOR.—The term 

24 ‘applicable distributor’ means an entity, other than 

25 an applicable group purchasing organization, that 


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1 buys and resells, or receives a commission or other 

2 similar form of payment, from another seller, for 

3 selling or arranging for the sale of a covered drug, 

4 device, biological, or medical supply. 

5 ‘‘(2) APPLICABLE GROUP PURCHASING ORGANI6 ZATION.—The term ‘applicable group purchasing or7 ganization’ means a group purchasing organization 

8 (as defined by the Secretary) that purchases, ar9 ranges for, or negotiates the purchase of a covered 

10 drug, device, biological, or medical supply. 

11 ‘‘(3) APPLICABLE MANUFACTURER.—The term 

12 ‘applicable manufacturer’ means a manufacturer of 

13 a covered drug, device, biological, or medical supply. 

14 ‘‘(4) CLINICAL INVESTIGATION.—The term 

15 ‘clinical investigation’ means any experiment involv16 ing 1 or more human subjects, or materials derived 

17 from human subjects, in which a drug or device is 

18 administered, dispensed, or used. 

19 ‘‘(5) COVERED DEVICE.—The term ‘covered de20 vice’ means any device for which payment is avail21 able under title XVIII or a State plan under title 

22 XIX or XXI (or a waiver of such a plan). 

23 ‘‘(6) COVERED DRUG, DEVICE, BIOLOGICAL, OR

24 MEDICAL SUPPLY.—The term ‘covered drug, device, 

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1 logical product, device, or medical supply for which 

2 payment is available under title XVIII or a State 

3 plan under title XIX or XXI (or a waiver of such 

4 a plan). 

5 ‘‘(7) COVERED RECIPIENT.—The term ‘covered 

6 recipient’ means the following: 

7 ‘‘(A) A physician. 

8 ‘‘(B) A physician medical practice. 

9 ‘‘(C) A physician group practice. 

10 ‘‘(8) EMPLOYEE.—The term ‘employee’ has the 

11 meaning given such term in section 1877(h)(2). 

12 ‘‘(9) KNOWINGLY.—The term ‘knowingly’ has 

13 the meaning given such term in section 3729(b) of 

14 title 31, United States Code. 

15 ‘‘(10) MANUFACTURER OF A COVERED DRUG, 

16 DEVICE, BIOLOGICAL, OR MEDICAL SUPPLY.—The 

17 term ‘manufacturer of a covered drug, device, bio18 logical, or medical supply’ means any entity which is 

19 engaged in the production, preparation, propagation, 

20 compounding, conversion, processing, marketing, or 

21 distribution of a covered drug, device, biological, or 

22 medical supply (or any subsidiary of or entity under 

23 common ownership with such entity). 

24 ‘‘(11) PAYMENT OR OTHER TRANSFER OF

25 VALUE.— 


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1 ‘‘(A) IN GENERAL.—The term ‘payment or 

2 other transfer of value’ means a transfer of 

3 anything of value that exceeds $25 and in4 cludes, subject to subparagraph (B), without 

5 limitation, any compensation, gift, honorarium, 

6 speaking fee, consulting fee, travel, services, 

7 dividend, profit distribution, stock or stock op8 tion grant, or ownership or investment interest. 

9 ‘‘(B) EXCLUSIONS.—An applicable manu10 facturer shall not be required to submit infor11 mation under subsection (a) with respect to the 

12 following: 

13 ‘‘(i) Product samples that are not in14 tended to be sold and are intended for pa15 tient use. 

16 ‘‘(ii) Educational materials that di17 rectly benefit patients or are intended for 

18 patient use. 

19 ‘‘(iii) The loan of a covered device for 

20 a short-term trial period, not to exceed 90 

21 days, to permit evaluation of the covered 

22 device by the covered recipient. 

23 ‘‘(iv) Items or services provided under 

24 a contractual warranty, including the re25 placement of a covered device, where the 


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1 terms of the warranty are set forth in the 

2 purchase or lease agreement for the cov3 ered device. 

4 ‘‘(v) A transfer of anything of value to 

5 a covered recipient when the covered re6 cipient is a patient and not acting in the 

7 professional capacity of a covered recipient. 

8 ‘‘(vi) Discounts (including rebates). 

9 ‘‘(vii) In-kind items used for the pro10 vision of charity care. 

11 ‘‘(viii) A dividend or other profit dis12 tribution from, or ownership or investment 

13 interest in, a publicly traded security and 

14 mutual fund (as described in section 

15 1877(c)). 

16 ‘‘(ix) Payments made to a covered re17 cipient by an applicable manufacturer or 

18 by a health plan affiliated with an applica19 ble manufacturer for medical care provided 

20 to employees of such manufacturer and 

21 their dependents. 

22 ‘‘(12) PHYSICIAN.—The term ‘physician’ has 

23 the meaning given that term in section 1861(r). For 

24 purposes of this section, such term does not include 

25 a physician who is an employee of the applicable 


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1 manufacturer that is required to submit information 

2 under subsection (a).’’. 

Æ 


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