Physician Payment Sunshine Act: CMS Post Round 1 of FAQ’s

Today, the Centers for Medicare & Medicaid Services (CMS) posted on the OPEN PAYMENTS the first iteration of Frequently Asked Questions (FAQs).  CMS said it will continue to add to this list as additional questions are raised, but did not provide any guidance for a specific time frame or how it would solicit or respond to requests.  Most of the questions and answers are not new interpretations of the law, but below we have posted some of the questions and answers we found of interest.

Last week we noted that CMS posted Fact Sheets for a number of stakeholders.

With respect to continuing medical education (CME), CMS confirmed that “Speaker compensation at continuing education event such as Continuing Medical Education (CME) conference is not required to be reported by an applicable manufacturer if” the three conditions are met. 

CMS did not elaborate on meals provided to physician-attendees at such events, what is included in the “tuition” that is not reportable.  CME stakeholders are actively seeking clarification questions with CMS and hope to receive responses for the next iteration of FAQs.  Internal sources from CMS have informed us that they hope to post as many answers to FAQs before the August 1st reporting date. 

CMS clarified that data collection templates are currently available for review, and CMS is reviewing public comments they received by April 9, 2013.  You can submit a request or question to CMS on this issue.

As companies prepare to register for CMS with OPEN PAYMENTS, applicable manufacturers and applicable group purchasing organizations should be prepared to provide information necessary to identify themselves and establish their roles (both within the OPEN PAYMENTS System and the organizations they represent).  While CMS said additional guidance regarding the registration process is forthcoming, this data includes, for example:

• the name of the primary point of contact,
• the name of the secondary point of contact, and
• the name of the individual that will attest to the accuracy of the data submitted.

CMS also reminded physicians and teaching hospitals that they must register with CMS and OPEN PAYMENTS in order to receive notification that payments have been reported or attributed to them. CMS encouraged physicians, teaching hospitals, and physician owners or physician investors to register to allow for notification. Additionally, CMS said it will utilize a general online posting (http://go.cms.gov/openpayments) and notifications on CMS’ listserve(s).

CMS also clarified that in terms of total (gross) revenue for limiting reporting requirements, “Both domestic and global sales are included in the company’s total (gross) revenue.”  Applicable manufactures with less than 10 percent of total (gross) revenue from covered drugs, devices, biological or medical supplies during the previous fiscal year are required to report only payments or other transfers of value specifically related to covered drugs, devices, biologicals or medical supplies.  Applicable manufacturers with less than 10 percent of total gross revenue from covered products during the previous year must register with CMS and attest that less than 10 percent of total (gross) revenues are from covered products, along with their attestation of the submitted data.  

Question: If a medical professional society’s annual conference is held prior to August 1, 2013 and a physician received a direct payment for consulting or other service, is the date of payment the date of the event?

Answer: Applicable manufacturers must report the date that a payment or transfer of value was provided to the covered recipient.  In certain circumstances, applicable manufacturers have flexibility to determine the methodology for reporting when the date of the transfer of value was “provided.”   For example, in the instance of travel benefits, there is flexibility for reporting travel because the purchase date (of airline tickets, for example) may be different than the date the transfer of value is actually “provided” to the covered recipient (i.e., when the physician takes the flight).  Applicable manufacturers have some flexibility to choose which payment date they will use in this type of situation; however, the methodology used must be consistent within a single nature of payment category (such as travel).

If a physician provides a consulting or other service prior to August 1, 2013, but an applicable manufacture does not pay the physician for the service until August 1, 2013 or after, such payment would be reported because the payment was provided to the physician after the start of the reporting requirements.  Applicable manufactures do not have flexibility to designate the date of the physician’s service as the “date of payment.”  Rather, the date of payment would be the date the applicable manufacturer post-marked the check or funds transfer to the physician to compensate him/her for the services rendered.

Clarification: CMS reiterated that “Education materials, such as medical textbooks or journal reprints, that are educational to covered recipients but are not intended for patient use or directly beneficial to patients are not included in the exclusion.”

Question: Should an applicable manufacturer report a payment was made to a physician or to a clinic if the applicable manufacturer contracts with a clinic for consulting services, and the applicable manufacturer requests that a specific physician practicing at the clinic perform the services. Is this considered an indirect payment or a payment to a third party?

This is considered an indirect payment.  Applicable manufacturers are required to report indirect payments to physicians.  A payment is considered indirect if an applicable manufacturer requires, instructs, directs or otherwise causes the third party to provide the payment in whole or in part to a physician.  An indirect payment was made to the physician since the applicable manufacturer requested a certain physician at the clinic perform the services.  The payment made to the clinic was ultimately transmitted  in part to the physician through the clinic.

Question: Are payments provided to a consulting firm or third party, whom in turn provide the payment (in whole or part), to a physician reportable under the OPEN PAYMENTS?

Answer: Yes, OPEN PAYMENTS requires reporting of both direct and indirect payments and other transfers of value provided by an applicable manufacturer or applicable group purchasing organization to a covered recipient.  An indirect payment is a payment or transfer of value made by an applicable manufacturer, or an applicable group purchasing organization, to a covered recipient, or a physician owner or investor, through a third party, where the applicable manufacturer, or applicable group purchasing organization, requires, instructs, directs, or otherwise causes the third party to provide the payment or transfer of value, in whole or in part, to a covered recipient(s), or a physician owner or investor.  

Question: If an applicable manufacturer makes a payment or transfer of value to a group practice rather than a specified physician, how should the applicable manufacturer correctly report the payment or transfer of value?  Should the payment be reported in the name of one physician or to all the physicians included in the group practice?

Answer: A payment or other transfer of value provided to a group practice (or multiple covered recipients generally) should be attributed to each individual physician covered recipient who requested the payment, on whose behalf the payment was made, or who are intended to benefit from the payment or other transfer of value.  Payments or other transfers of value do not necessarily need to be reported in the name of all members of a practice, rather, applicable manufacturers should divide payments or other transfers of value in a manner that most fairly represents the situation.

For example, many payments or other transfers of value may need to be divided evenly, others may need to be divided in a different manner to represent who requested the payment, on whose behalf the payment was made, or who was intended to benefit from the payment or other transfer of value.  

Question: Are payments for medical research writing and/or publication included in reporting research payments?

Answer: Under OPEN PAYMENTS, a payment reported as research falls within a research payment category if it is subject to either: 1) a written agreement; 2) a contract; or 3) a research protocol.  Payments for medical research writing and/or publication would be included in the research payment, if the activity (here, medical research writing/publication) was included in the written agreement or research protocol and paid as a part of the research payment.

Question: Is a blood center an applicable manufacturer?

Answer: Yes, a blood center is considered to be an applicable manufacturer if the blood center operates in the United States and is engaged in the production, preparation, propagation, compounding, or conversion of a covered drug, device, biological, or medical supply covered by Medicare, Medicaid, or CHIP.  Additionally, a blood center is considered to be an applicable manufacturer if the blood center is under common ownership, as defined in 42 CFR 403.902 with an applicable manufacturer, and the blood center provides assistance or support to the applicable manufacturer.

Assistance and support provided by the blood center to the entity must pertain to the production, preparation, propagation, compounding, conversion, marketing, promotion, sale or distribution of a covered drug, device, biological, or medical supply.  A covered drug or biological is any drug or biological for which: (1) Payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program (CHIP), either separately (such as through a fee schedule or formulary) or as part of a bundled payment (such as under a hospital inpatient /outpatient prospective payment system; and (2) Requires a prescription to be dispensed.