New California Law Requires Notification of Outstanding Payments to Patients | McDermott Will & Emery


On September 29, 2022, California Governor Gavin Newsom signed Assembly Bill 1278, requiring physicians and their employers to provide communications to patients through the Open Payments database beginning January 1, 2023.

The federal Open Payments program is designed to promote transparency by requiring manufacturers of drugs, devices, and biological or medical supplies to report annually to the Centers for Medicare & Medicaid Services certain payments and other transfers of value to physicians and certain advanced practice providers (eg, nurses) and teaching hospitals. Currently, California pharmaceutical companies are required to disclose their compliance program, including information related to annual dollar limits for gifts, promotional materials, or incentives provided to healthcare or healthcare professionals (California Health & Safety Code ยง119402). In particular, the passage of this new law will impose new disclosure requirements on physicians and their employers regarding physicians’ financial relationships with pharmaceutical and medical device manufacturers.

Effective January 1, 2023, physicians and surgeons licensed under the California Medical Practice Act or the California Osteopathic Act, or their employers, are required to notify patients in writing or electronically through the Open Payments database at the first physician visit. The new notification requirement applies to California-licensed physicians who are located outside of California but provide telemedicine services to patients in California. The new law does not apply to doctors and surgeons working in a hospital emergency room.

The written or electronic notification must include a signature of the patient or patient representative, the date of the signature and the following text:

  • The Open Payments Database is a nationwide tool for finding payments made by drug and device manufacturers to physicians and teaching hospitals. It can be found at For informational purposes only, a link to the Open Payments website of the Federal Centers for Medicare and Medicaid Services (CMS) is provided here. The state’s Physician Payments Sunshine Act requires that detailed information on payments and other payments in excess of ten dollars (US$10) by drug, medical device and biologics manufacturers to physicians and teaching hospitals be made available to the public.

Physicians and surgeons must retain the notice in the patient’s medical record.

Physicians and surgeons are also required to post a notice about the Open Payments Database wherever they practice, in an area where the notice is likely to be seen by anyone entering the practice. Beginning January 1, 2024, physicians and surgeons must also prominently post the same Open Payments Database notice, if any, on their practice’s website.

Violation of this law constitutes unprofessional conduct, and violators may be subject to disciplinary action by their respective licensing authorities.

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