This week at an enforcement panel, government representatives discussed using the Sunshine Act data to delve into allegations of kickbacks to doctors and detect industry trends of improper behavior.

During the American Conference Institute’s 7th Annual Forum on Sunshine Act Compliance & Aggregate Spend Reporting, government representatives recognized that industry payments to physicians may be valuable, but warned that they must be appropriate.  Some federal attorneys are already encouraged to comb through the Sunshine Act data for outliers or red flags.  As one government official cautioned, if a physician shifts from prescribing one drug to another similar drug after its manufacturer’s ski trip, that will be viewed as a red flag.  Now, the government – and the public – has the available data to draw those kinds of inferences.

The government representatives acknowledged that the Sunshine data is only a starting point for review, and that they would likely seek further information – such as through a subpoena to the company – to further investigate whether suspicious payments revealed an improper relationship or kickback arrangement.  Nevertheless, responding to government inquiries will require company resources, and the same data may prompt a whistleblower lawsuit even if a company satisfies the government’s questions.

The panel noted that the transparency data allows them to move beyond a relator’s company-specific allegations to detect similar or more egregious conduct at competitors.  Although the Sunshine Act data covers only part of 2013, the government has already begun to use its insights to inform potential industry sweeps, and we can expect that after the release of the full set of 2014 data later this month, the government will view the database as an even more valuable resource.

The government representatives stressed that they are most concerned about payments not reported: that is, kickback arrangements hidden by companies rather than disclosed under the Sunshine Act reporting rules.  But relators’ counsel are likely already mining the available data and anticipating the arrival of the 2014 data to develop or shore up allegations in qui tam complaints, which are filed under seal and may proceed even if the government declines to intervene.

Sunshine Act Live WebcastFor insights into 2014 data – arriving at the end of June – stay tuned for information about our upcoming live webcast in July to discuss the trends revealed by the 2014 data and explore practical strategies and tools for understanding and mitigating risks by combining the reported physician payments with other key data points, such as physicians’ Medicare reimbursements.