Physician Payments Sunshine Act: Proposed CME Change: “Axing Sunshine Exclusion Has Wide-Ranging Consequences”

Inside Health Policy recently covered CMS’ proposal to remove the continuing medical education (CME) exclusion from the Sunshine Act. The article provides a coherent summary of the proposed changes and the potential effects of the law on both speakers and attendees of CME events.

On July 3, CMS stated it wanted to remove of the CME exclusion in the Sunshine Act because it was redundant with another provision of the law. Stakeholders, however, are concerned that CMS’ plan will have a negative impact on both speakers and attendees at CME events despite CMS’ assurances that doing away with the CME exclusion will not require reporting of indirect payments from drug and device manufacturers to CME lectures and conferences.”

Currently, the Sunshine Act excludes CME payments if the event is accredited by one of five bodies. CMS noted that they felt this suggested improper favoritism. Their new policy states that “indirect payments” from drug and device manufacturers to sponsor or underwrite CME events where the manufacturers have no control of the subject matter or speakers at the event would not have to be reported under the new rule. After CMS strikes the CME exclusion, manufacturers would rely on the “indirect payment exclusion” to take care of keeping CME events from reporting. This provision states that manufacturers must be “unaware” of the lecturers’ identities for essentially up to a year and a half after the indirect payment has been made.

However, this approach is problematic. Inside Health Policy interviewed an industry lawyer that stated it is nearly impossible for a manufacturer to be “unaware” or not know the names of doctors who gave CME lectures for up to 18 months after the indirect payment was made. This essentially negates CMS’ “catch-all” exclusion for indirect CME payments.

The CME Coalition, which represents a variety of CME stakeholders, states that “[a]lthough CMS has suggested that its sole intent is to expand the range of educational events where the value of the honoraria, travel expenses or food may be exempt from reporting for the purpose of speakers,” the CME Coalition is “concerned that the way CMS did it could have three devastating outcomes unless remedied.”

An official with a leading CME stakeholders group noted the worry is that “lawyers for manufacturers will advise them not to sponsor CME events with indirect payments because they will inevitably find out who speakers and presenters are as soon as the agenda of the event is made public, thereby under the letter of the provision making those payments reportable.” Additionally, the CME Coalition are concerned that if CMS does away with the CME exclusion, “educational materials given to attendees at lectures and events may also become reportable.”

This reporting exclusion is detailed specifically in the current rule and does not seem to be accounted for in the second Sunshine Act provision CMS says will now cover indirect payments if the CME exclusion is dropped. CMS also does not make any mention of attendees and the materials they receive at CME events. 

“I can’t imagine CMS meant to get rid of that reporting exclusion, but they don’t address it,” the industry official says. “There is a big concern that physicians will be less inclined to attend CME events if their names and the educational materials they receive will be reported on a public website, as if there’s something wrong with (physicians getting educational materials relevant to their continuing education).”

The CME Coalition also worries that the rule change by CMS will open up the reporting exclusion to non-accredited CME education, which would include marketing presentations by drug and device manufacturers.

The CME industry official says that roughly 26 percent of funding for CME events comes from indirect payments from manufacturers. The official adds that many manufacturers may stop investing in CME if the CME stakeholders are worried about of the unintended consequences of doing away with the CME Sunshine Act exclusion.

“Some drug companies may come to view CME as not worth it and start pulling out,” the official says. “CME is an important building block in providers education, and the money has to come from somewhere.”

The industry official says CME stakeholders will bring these concerns to CMS during the public comment period for the proposed rule.