Family Member Reporting: When a Physician's Spouse's Ownership Must Be Disclosed (42 CFR § 403.902)

The Physician Payments Sunshine Act (PPSA) requires applicable manufacturers and group purchasing organizations to report not just payments made to physicians but also the ownership or investment interests held by physicians and their immediate family members. Under 42 CFR § 403.902, “immediate family member” includes the physician’s spouse. If a spouse owns an equity stake, a convertible instrument, or other reportable interest in a manufacturer or GPO, that ownership must be disclosed by the reporting entity under 42 CFR § 403.906 and will appear in CMS’s Open Payments database.

For small practices, overlooking spouse-held interests can result in unexpected public listings and confusion during payer credentialing or media inquiries. A lightweight, evidence-driven workflow, built on the definitions in 42 CFR § 403.902 and the reporting mechanics in 42 CFR § 403.904 and § 403.906, allows your clinic to surface, validate, and, when necessary, dispute entries that implicate a physician’s spouse. With minimal cost, you can protect your reputation and ensure the public record is accurate.

Open Payments data are increasingly consulted by patients, payers, and journalists to evaluate financial relationships. While most clinics focus on meals, travel, and consulting fees, the ownership reporting lane is commonly misunderstood, especially when the spouse is the one who holds the interest. The PPSA’s definitions make clear that a physician’s immediate family member (including a spouse) can bring an otherwise invisible relationship into public view if that family member owns or holds a reportable interest in an applicable manufacturer or GPO.

Small practices need a clear, low-effort process to identify spousal interests annually, categorize them correctly (e.g., private equity vs. publicly traded securities), and prepare documentation for the CMS review and dispute cycle. This article translates the legal requirements into practical controls a lean team can run year-round.

Legal Framework & Scope Under 42 CFR § 403.902

Immediate family member (who is covered).
42 CFR § 403.902 defines “immediate family member” broadly, including the physician’s spouse; natural or adoptive parents, children, and siblings; stepfamily equivalents; in-laws; grandparents and grandchildren; and spouses of grandparents or grandchildren. For this article, the spouse is the focal relationship because spousal holdings are common and often overlooked in practice documentation.

Ownership or investment interest (what counts).
Under 42 CFR § 403.902, “ownership or investment interest” includes equity, debt, or other instruments that are secured by the entity’s property or revenues, such as stock, stock options, partnership shares, LLC interests, loans, or bonds. The definition captures direct and, in context, certain indirect interests when the stake is effectively held in or through another entity that conveys ownership features in the manufacturer or GPO. Consistent with transparency policy and related health law frameworks, interests in publicly traded securities and mutual funds are generally not the target of ownership reporting because they are broadly held and not indicative of a direct financial relationship in the same way as private or closely held stakes.

Who reports and when.
The applicable manufacturer or applicable group purchasing organization is responsible for reporting physician (and immediate family member) ownership or investment interests to CMS (42 CFR § 403.906), along with separate payment/transfer-of-value categories (42 CFR § 403.904). Clinics do not file these reports, but clinics are the ones fielding questions and working with physicians to review or dispute what appears in the public file (42 CFR § 403.908).

Public posting and disputes.
CMS publishes the data each year and provides a review and dispute process (42 CFR § 403.908). A practice can help its physicians contest inaccuracies, such as misidentifying a spouse’s passive, excluded holding as a reportable interest or misstating the nature or timing of a report.

Wrap-up: The spouse is squarely within “immediate family member” under § 403.902. If the spouse holds a reportable ownership or investment interest in a manufacturer or GPO, the reporting entity must disclose it, and it will be visible in Open Payments unless corrected or withdrawn through the dispute process.

Program administration.
CMS administers Open Payments and publishes reported data annually. Manufacturers/GPOs are accountable for the accuracy of their submissions. Clinics interact mainly during the review and dispute stage (42 CFR § 403.908).

Common triggers for clinic involvement.

• Surprise listings: A spouse’s stake in a privately held device start-up appears for the first time, unknown to the clinic.

• Data-quality checks: Manufacturers request confirmation of identities (including whether a spouse’s holding exists and its nature) before submitting ownership files (42 CFR § 403.906).

• Media/payer inquiries: External stakeholders ask about perceived conflicts when ownership entries appear next to payment histories.

Regulatory frame for corrections.
Disputes and corrections proceed under 42 CFR § 403.908, which sets the timeline and process to challenge a listing. Accurate, contemporaneous evidence is vital.

Wrap-up: CMS runs the platform; manufacturers/GPOs file; but clinics must be ready with evidence to support or challenge spousal-ownership entries when physicians ask for help.

The following controls are lean, non-duplicative, and tied to the PPSA rules. Each item explains how to do it, what evidence to retain, and a low-cost method to keep it running.

Control 1, Annual Spousal-Ownership Attestation (42 CFR § 403.902; § 403.906).

• How to implement: During annual compliance onboarding/renewal, require each physician to sign an attestation confirming whether any spouse holds an ownership or investment interest in an applicable manufacturer or GPO. The form should list examples (stock, options, LLC units, notes, convertible instruments) and ask whether any holding is publicly traded/mutual fund vs. private/closely held.

• Evidence to retain: Signed attestation, any explanatory notes (entity name, instrument type, acquisition date).

• Low-cost approach: A one-page PDF with checkboxes stored in a secure shared drive; renew annually and upon status changes (marriage, divorce, new investment).

Control 2, Recipient and Entity Mapping Sheet (42 CFR § 403.902).

• How to implement: For any declared spousal interest, maintain a simple mapping sheet: physician name and NPI; spouse name; entity name and type (manufacturer/GPO); instrument type; whether the interest is publicly traded/mutual fund (generally excluded) or private (likely reportable by the entity).

• Evidence to retain: Copy of any cap table excerpt, investor letter, or executed subscription (with sensitive amounts redacted if necessary).

• Low-cost approach: One spreadsheet tab with locked fields and a column for “anticipated reporting status by manufacturer.”

Control 3, Pre-Publication Courtesy Sync with Frequent Manufacturers (42 CFR § 403.906; § 403.904).

• How to implement: 60 days before CMS’s review window, send a short email to frequent industry contacts asking if any ownership entries are anticipated for your physicians/ spouses and requesting their report elements (entity, instrument type, dates).

• Evidence to retain: Email thread, any preview files, and your internal mapping sheet.

• Low-cost approach: Automated mail-merge to a prebuilt contact list.

Control 4, Evidence Checklist for Disputes (42 CFR § 403.908).

• How to implement: Build a three-document dispute packet template: (1) cover letter citing § 403.902 and § 403.906 with the factual correction; (2) spouse-ownership attestation excerpt; (3) an artifact that proves exclusion (e.g., statement showing the holding is in a publicly traded mutual fund) or corrects the entity/interest type.

• Evidence to retain: Timestamped submissions, manufacturer acknowledgments, CMS portal screenshots.

• Low-cost approach: Standardized packet template saved for reuse.

Control 5, Contract/Consulting Pre-Clearance (42 CFR § 403.904; § 403.902).

• How to implement: If a physician provides consulting or advisory services to a company in which the spouse also holds a stake, pre-clear the engagement internally and document the separation of roles. This does not change ownership reporting obligations, but it manages the narrative and supports accuracy in the payments file (42 CFR § 403.904).

• Evidence to retain: Consulting agreement, conflict-of-interest memo signed by the physician.

• Low-cost approach: A one-page disclosure form appended to the consulting SOW.

Control 6, Education Cue Card for Front Desk/Managers (42 CFR § 403.902).

• How to implement: Provide a simple card defining “immediate family member” and listing spouse first. Include the examples of reportable instruments and the common exclusion for publicly traded securities/mutual funds.

• Evidence to retain: Version-controlled PDF; training sign-off.

• Low-cost approach: Single slide or half-page laminated card.

Control 7, Governance Metric and Board/Owner Brief (42 CFR § 403.906; § 403.908).

• How to implement: Track two metrics: (1) “Percent of physicians with current spouse-ownership attestations on file,” and (2) “Number of spousal-ownership listings disputed/corrected during the cycle.” Brief practice owners annually.

• Evidence to retain: Metrics log and annual summary email.

• Low-cost approach: Add two lines to your existing compliance dashboard.

Wrap-up: These controls operationalize § 403.902 definitions and § 403.906 reporting mechanics with minimal effort, ensuring your clinic is never surprised by a spouse-related ownership entry and is equipped to correct the record quickly.

Case Study

Scenario: A small orthopedics clinic employs two physicians. One physician’s spouse owns 2% of a privately held device start-up that recently became an applicable manufacturer. The spouse invested years ago through a simple membership interest. During the current cycle, the manufacturer files ownership reports listing the physician by name, stating “immediate family member ownership, spouse,” and includes the relevant dates.

Issue: The physician is surprised because the spouse never received dividends and perceived the holding as “inactive.” The clinic had no record of spousal ownership because prior attestations were focused on payments rather than ownership.

Analysis under PPSA rules:

• Under 42 CFR § 403.902, the spouse is an “immediate family member.”

• The LLC membership interest is an “ownership or investment interest” within the definition.

• Under 42 CFR § 403.906, the manufacturer is obligated to report that interest; it is appropriate for it to appear in Open Payments.

• Exclusion for publicly traded securities/mutual funds does not apply because the company is privately held.

Resolution:

• The clinic updates its attestation form to ask specifically about spouse ownership interests each year and captures the device start-up information.

• During the CMS review window (42 CFR § 403.908), the clinic verifies the listing details (entity name, instrument type, date acquired) and confirms they are accurate. No dispute is filed.

• The clinic drafts a short public-facing explanation: The listing reflects a passive spousal investment in a private company; the physician’s clinical decisions remain independent.

Outcome: No correction needed; the clinic institutes the Operational Playbook controls so future cycles are predictable and documented.

Wrap-up: These targeted tasks align with PPSA definitions and reporting mechanics, helping your clinic prevent avoidable surprises and manage disputes efficiently.

Risk Traps & Fixes Under 42 CFR § 403.902

Even mature compliance programs miss spousal holdings because ownership reporting is less visible than payments. These pitfalls and fixes link directly to the definitions and reporting rules.

• Trap: Attestations that ask only about direct physician payments.
  Fix: Add a specific spouse-ownership question referencing ownership or investment interest examples (stock, options, LLC units, notes) and distinguish private holdings from publicly traded/mutual fund holdings.
  Consequence: Incomplete records produce surprise public listings and reactive disputes (42 CFR § 403.906; § 403.908).

• Trap: Treating passive or “inactive” spouse holdings as non-reportable.
  Fix: Clarify that reportability turns on the definition of ownership or investment interest, not whether the spouse receives dividends.
  Consequence: Missed expectations and reputational questions when passive stakes appear in Open Payments (42 CFR § 403.902; § 403.906).

• Trap: Assuming all market holdings are excluded.
  Fix: Distinguish publicly traded/mutual fund holdings (generally excluded) from private company stakes (generally reportable by the entity).
  Consequence: Incorrect disputes that waste cycle time and may be rejected (42 CFR § 403.902).

• Trap: No documentation when disputing manufacturer listings.
  Fix: Use a three-document packet: cover letter with citations (42 CFR § 403.902; § 403.906), attestation excerpt, and an artifact proving exclusion or correcting the entity/interest.
  Consequence: Delays in correction and lingering inaccuracies in the public file (42 CFR § 403.908).

• Trap: Overlooking indirect holdings through family LLCs or trusts.
  Fix: Ask whether the spouse’s interest is held directly or through another entity; if through a pass-through, determine whether it conveys a reportable ownership or investment interest in the manufacturer/GPO.
  Consequence: Under-identification of relationships that manufacturers later report (42 CFR § 403.902).

• Trap: Failing to coordinate consulting relationships with known spousal ownership.
  Fix: Pre-clear engagements and document independence; while this does not alter ownership reporting, it prepares your narrative for stakeholders.
  Consequence: Heightened scrutiny and mixed messages if a payment listing sits beside a spousal ownership entry (42 CFR § 403.904; § 403.902).

Wrap-up: These fixes focus your effort on the definitional triggers in § 403.902 and the reporting obligations in § 403.906, cutting down on avoidable disputes and misperceptions.

Make spousal-ownership visibility a standard part of your annual compliance rhythm. Assign a single owner for the attestation process and the mapping sheet, with a named backup. Track the two metrics noted above, attestation completion rate and dispute activity, so leadership knows whether controls are working. Keep a short “explainer” paragraph ready for websites or media responses that explains, in plain language, that Open Payments may list spouse-held interests under the physician’s profile and that the clinic maintains safeguards for clinical independence.

Finally, ensure every physician retains or delegates access to the CMS Open Payments portal well before the review window opens (42 CFR § 403.908). Timely access turns potential issues into quick corrections rather than public controversies.

Family member reporting under the PPSA is not a technicality; it is a core transparency requirement. Under 42 CFR § 403.902, the spouse is expressly included in “immediate family member,” and a spouse’s ownership or investment interest in a manufacturer or GPO is reportable by that entity under 42 CFR § 403.906. Small practices do not file ownership reports, but they do live with the consequences of what is published. A lightweight attestation, a simple mapping sheet, and a ready dispute packet give your clinic control of the narrative with minimal cost.

Immediate, concrete next steps for a small clinic:

1. Add a spouse-ownership question to your annual physician compliance attestation, listing examples of reportable instruments and the public/mutual fund exclusion (42 CFR § 403.902; § 403.906).

2. Build a one-tab mapping sheet for any disclosed spousal interests and store at least one validating artifact per entry (42 CFR § 403.902).

3. Schedule a courtesy pre-publication sync with frequent manufacturers to catch ownership entries early (42 CFR § 403.906; § 403.904).

4. Prepare a three-document dispute packet template and a 90-second public explainer to use if questions arise (42 CFR § 403.908).

5. Verify that each physician (or a delegate) has active Open Payments portal access 30–45 days before the review window opens (42 CFR § 403.908).

• 42 U.S.C. § 1320a-7h – Transparency reports and reporting of physician ownership or investment interests

• 42 CFR § 403.902 – Definitions (Open Payments)

• 42 CFR § 403.904 – Reports of payments or other transfers of value

• 42 CFR § 403.906 – Reports of physician ownership or investment interests

• 42 CFR § 403.908 – Procedures for review, dispute, and correction

• Transparency Reports and Reporting of Physician Ownership or Investment Interests; Final Rule (Federal Register)