New California Law Requires Physicians to Provide Patients with Notice of the Federal Open Payments Program

A new California law – Assembly Bill 1278,¹ which was signed by the Governor on September 29, 2022 – requires physicians to provide patients with notice of the federal Open Payments database. The federal Open Payments program was designed to increase transparency and accountability regarding the financial relationships between drug companies and healthcare providers. The Sunshine Act and Open Payments program requires drug companies and manufacturers to annually report payments made to covered recipients, such as physicians and teaching hospitals, which the Centers for Medicare & Medicaid Services (CMS) then publishes to the public through the Open Payments database. Since its inception in 2013, the Open Payments program has expanded beyond doctors and teaching hospitals to include reporting obligations for payments made to midlevel providers such as physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists and anesthesiologist assistants, and certified nurse midwives.

Pursuant to California Assembly Bill 1278, physicians and surgeons² or their healthcare employers³ must provide each patient with written or electronic notice of the federal Open Payments database⁴ during the patient’s initial office visit. The written or electronic notice must contain the following text:

The Open Payments database is a federal tool used to search payments made by drug and device companies to physicians and teaching hospitals. It can be found at https://openpaymentsdata.cms.gov/

The notice should be signed and dated by the patient or a patient representative, and the physician or surgeon should give the patient or patient representative a copy of the signed and dated notice. Should a patient be unable to sign or refuse to sign, we recommend documenting that the provider issued the notice, attempted to obtain a signature from the patient or patient’s representative, and record the reason for failing to do so in the records. Physicians and surgeons must also include a record of the notice in the patient’s electronic records unless the physician and surgeon do not maintain electronic records, in which case the physician and surgeon must include the notice pursuant to this section in their written records.

In addition, physicians and surgeons are required to conspicuously post an Open Payments database notice in each location where the licensee practices. The notice should be posted in an area that is likely to be seen by all persons who enter the office. The posted notice shall include the text of the written and electronic notice above and the following statement:

For informational purposes only, a link to the federal Centers for Medicare and Medicaid Services (CMS) Open Payments web page is provided here. The federal Physician Payments Sunshine Act requires that detailed information about payment and other payments of value worth over ten dollars ($10) from manufacturers of drugs, medical devices, and biologics to physicians and teaching hospitals be made available to the public.

Beginning January 1, 2024, physicians and surgeons are also required to conspicuously post the above Open Payments database notice on the website of the physician or surgeon, the practice, or the healthcare employer.

Physicians and surgeons working in a hospital emergency room are expressly exempt from the Open Payments notice requirements. The California Open Payments notice requirements also do not currently apply to midlevel providers such as physician assistants and nurse practitioners. Failure to comply with the Open Payments notice requirements may constitute disciplinary conduct.

For more information on California Assembly Bill 1278 or the federal Sunshine Act or Open Payments Program, please contact Jennifer Burgar or Charmaine Mech.

[1] For the full legislative text and current status of California Assembly Bill 1278, see https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill_id=202120220AB1278.

[2] “Physician and surgeon” is defined to include a physician and surgeon licensed pursuant to the California Medical Practice Act or an osteopathic physician and surgeon licensed by the California Osteopathic Medical Board of California under the Osteopathic Act.

[3] “Health care employer” means an employer that provides healthcare services and that employs a physician and surgeon or an osteopathic physician and surgeon.

[4] “Open Payments database” means the database created to allow the public to search for data provided pursuant to Section 1320a-7h of Title 42 of the United States Code and that is maintained by the federal Centers for Medicare and Medicaid Services, which is available here: https://openpaymentsdata.cms.gov/.