Physicians and Employers Must Notify California Patients When Payments Database Opens | McGuireWoods LLP

Under a new California law, effective Jan. 1, 2023, physicians and their employers must begin notifying their California patients upon a patient’s first visit to the Open Payments database and document that notice in each patient’s medical record. As passed, California Assembly Bill Number 1278 (AB 1278) subjects violations of these disclosure requirements to unprofessional conduct to disciplinary action by state physician licensing boards.


The Physician Payments Sunshine Act (Sunshine Act), a federal law designed to promote transparency in healthcare through the Open Payments program, requires manufacturers of drugs, medical devices and biologics reimbursed by health care programs federal health providers such as Medicare and Medicaid to report payments and other transfers. valuable. Although some exceptions apply, manufacturers generally must report these payments to physicians, physician assistants, nurse practitioners, academic medical centers, and other healthcare providers.

In accordance with the Sunshine Act, the Centers for Medicare and Medicaid Services maintains the publicly available Open Payments Database that lists all such payments by manufacturers to help patients assess potential conflicts of interest related to prescription drugs and devices. ordered by their doctors.

AB 1278

The new law applies to physicians and surgeons licensed under the California Medical Practice Act or the California Osteopathic Act and their employers. In practice, the law applies to any physician providing professional medical services to patients located in California, whether or not the physician is physically located in California. For example, a physician providing telehealth services to patients in California will likely be subject to the new law even though they are in another state. Notably, AB 1278 does not apply to physicians working in hospital emergency rooms.

Under AB 1278, effective January 1, 2023, physicians and their employers must inform patients about the Open Payments database during the patient’s first office visit. The patient notification may be written or electronic and must include the following text:

The Open Payments Database is a federal tool used to research payments made by drug and device manufacturers to physicians and teaching hospitals. It can be found at

Physicians should obtain the signature of each patient or the patient’s representative and a copy of the notice should be placed in the patient’s medical record.

AB 1278 requires physicians to post a similar notice in each place where they practice medicine, in an area likely to be seen by all persons entering the place. Effective January 1, 2024, if the physician’s practice has a website, the website must also include the notice. The notice must contain an Internet link to the Open Payments database and the following text:

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

Failure to comply with the new law constitutes unprofessional conduct, and physicians who violate the new law could be subject to disciplinary action by the relevant licensing board.

Related developments

Although AB 1278 focuses on a notification requirement, promoting transparency, public education and awareness, and sensitivity to the financial relationships of healthcare providers remains a recurring topic in recent legislation. For example, in March 2022, Maryland passed a law requiring that every licensed prescriber (defined as including dentists, podiatrists, advanced practice nurses with prescribing authority, and other individuals with the authority to prescribe medications and devices – but explicitly excluding physicians) that receives financial incentive assistance exceeding $5,000 per year in total from a pharmaceutical manufacturer or distributor to file a disclosure with its licensing board within 30 days of receipt of such incentives.

Convenient takeaways

Physicians and their employers who provide professional medical services and employ physicians must ensure that their policies and procedures, patient notification materials, signage, and medical records comply with the requirements to provide and document this notice. AB 1278 does not include font or sign size requirements for notice or signage.

  1. Physicians and their employers should consider including both the patient notice and the practice location/website notice on all patient materials and notice signs to ensure that patients receive reviews.
  2. As enacted, AB 1278 does not specify whether physicians and their employers must request signatures from existing patients and patient representatives as part of the notification requirement. However, in the absence of explicit protections, physicians and their employers should consider obtaining signed acknowledgments for all patients on each patient’s first office visit after AB 1278 takes effect. .
  3. Every employer of physicians in California should consider regularly monitoring the Open Payments database with respect to its employed physicians and ensure that policies relating to payment for outside or consulting activities, conflicts of interest, and shared information with patients meet the requirements of the new law.
  4. Physicians and manufacturers should ensure that the information in the Open Payments database is accurate, especially with respect to financial relationship matters.
  5. Physicians and their employers located in other states should remain alert to proposed legislation that may result in similar requirements in other states.

McGuireWoods will continue to provide updates related to this new law and similar legal and regulatory developments in other states.