On Halloween evening, October 31st, the Centers for Medicare and Medicaid Services (CMS) issued their final physician payment fee schedule for 2015, which included their changes to the Final Rule implementing the Physician Payments Sunshine Act.
The agency’s brief announcement following the changes stated that the revisions included “Deletion of the Continuing Education Exclusion in its entirety.” While this is technically true, CMS effectively expanded the CME exemption by stating that they would not consider any CME-related payments to be reportable so long as the commercial supporter “does not require, instruct, direct, or otherwise cause the continuing education event provider to provide the payment … to a covered recipient.” The CME Coalition, which represents many CME provider companies and supporters, applauded the new rule as “a big win for CME, and for patients.” They note that “[a]s a practical matter, because the standards for commercial support inherent in most accredited CME already prohibit commercial supporters from paying speakers directly, suggesting speakers (e.g., providing a list), or otherwise controlling the nature or content of the educational program, there will not be any necessity to report CME payments under the Sunshine Act for most accredited CME programs. Therefore the CME Coalition applauds CMS for clarifying these important rules in such a manner.”
CMS also allayed two key concerns from stakeholders who commented this summer on the proposed rule change:
First, CMS specifically stated under the Final Rule that such indirect CME-supporting transfers of value are not reportable, even if the commercial supporter subsequently discovers the identity of the covered recipient.
Second, CMS clarified that physician attendees of CME programs need not be reported to Open Payments for the value of their educational experience, so long as the commercial supporter does not “instruct, direct, or otherwise cause the subsidized tuition fee for a continuing education event to go to a specific physician attendee.” CMS notes that they will provide “sub-regulatory guidance specifying tuition fees provided to physician attendees that have been generally subsidized at continuing education events by manufacturers are not expected to be reported.”
Background on the CME Exemption
As we have detailed on Policy and Medicine, the 2013 Final Rule contains an exemption for payments to healthcare providers who serve as speakers for accredited continuing education programs, under section §403.904(g), so long as
- (1) The event meets the accreditation or certification requirements of (A) Accreditation Council for Continuing Medical Education; (B) American Academy of Family Physicians; (C) American Dental Association’s Continuing Education Recognition Program; (D) American Medical Association; or (E) American Osteopathic Association,
- (2) The applicable manufacturer does not pay the covered recipient speaker directly, and
- (3) The applicable manufacturer does not select the covered recipient speaker or provide the CE vendor with a distinct, special rule for payments related to the programs.
In July, CMS proposed to remove this exemption. They believed that the current Final Rule appeared to “endorse” the named providers. Furthermore, CMS stated that they wanted to remove the CME exemption because it is “redundant” with the Sunshine Act’s “Indirect Payment” exclusion. Indirect payments, according to CMS, occur where a manufacturer “requires, instructs, directs, or otherwise cause[s] the third party to provide the payment” to a covered recipient. When a manufacturer does direct a third party to provide payment to covered recipients, these indirect payments do not have to be reported if the manufacturer was “unaware” of the identity of the recipient. CMS states that manufacturers are “unaware” if they do not find out the identity of the physician/teaching hospital recipient “during the reporting year or by the end of the second quarter of the following reporting year.” This could be 18 months beyond a CME event.
During the summer, hundreds of stakeholders—from CME providers, to physicians, to industry—commented that manufacturers will never be able to meet that “indirect payment” standard because they will inevitably learn the identities of speakers through brochures, publications, or by simply attending sponsored events. Stakeholders stressed the firewalls that separate manufacturers from sponsored educational activity, the benefits of strict self-regulation, and the important clarity offered by unambiguous regulatory language.
CMS Response
In the July proposed rule, CMS seemed to assure manufacturers that because supporters of accredited CME would be “unaware” of the identity of the covered recipients receiving CME speaker fees, payments would meet the “indirect payments” exclusion. After the outpouring of comments, CMS changed their interpretation. In Friday’s announcement, CMS noted that most grants for accredited or certified CME programs are not “indirect payments” at all. Thus, they do not need to fall into a special indirect payment exclusion under the Sunshine Act because they are not reportable transfers of value in the first place.
Indeed, CMS states:
If an applicable manufacturer or applicable GPO provides funding to support a continuing education event but does not require, instruct, direct, or otherwise cause the continuing education event provider to provide the payment or other transfer or value in whole or in part to a covered recipient, the applicable manufacturer or applicable GPO is not required to report the payment or other transfer of value. The payment is not reportable regardless if the applicable manufacturer or applicable GPO learns the identity of the covered recipient during the reporting year or by the end of the second quarter of the following reporting year because the payment or other transfer of value did not meet the definition of an indirect payment (emphasis added).
This approach is also consistent with our statement at (78 FR 9490), where we explained that “if an applicable manufacturer provided an unrestricted donation to a physician professional organization to use at the organization’s discretion, and the organization chose to use the donation to make grants to physicians, those grants would not constitute ‘indirect payments’ because the applicable manufacturer did not require, instruct, or direct the organization to use the donation for grants to physicians.” Therefore, because such payments are not indirect payments, we do not need to create an additional exclusion specific to continuing education indirect payments by modifying the indirect payment exclusion at §403.904(i)(1).
As the CME Coalition states above, accredited CME companies are bound by well-defined standards of commercial support that disqualify programs without rigorous firewalls in place. These standards prohibit supporter-directed payments to individual physicians–the CME provider alone has control over the grants. Furthermore, as we noted above, CMS will be providing “sub-regulatory guidance” specifying that “tuition fees provided to physician attendees that have been generally subsidized at continuing education events by manufacturers are not expected to be reported.”
CMS’s language demonstrates an appreciation of the fact that the Sunshine Act was not meant to implicate independent CME-providers that work to develop educational content for physician learners.
Timeline- Changes will set in 2016 for 2017 reporting
While stakeholders had tailored their aggregate spend capture to the specific CME-exemption during the first year of reporting, CMS has allowed a reasonable adjustment period. Their announcement states: “we are finalizing data collection requirements that would begin January 1, 2016 according to this final rule for applicable manufacturers.” Manufcturers would need to report to CMS in 2017.
Other Sunshine Provisions
There were several additional provisions in the 2015 physician fee schedule which affect the implementation of the open payments program. They include:
Reporting Marketed Names
CMS proposed to require applicable manufacturers to report the marketed name for all covered drugs, devices, biologicals or medical supplies. They received comments that ranged from the names not being useful to encouraging requirements of all names regardless of the state of development.
CMS has finalized a modified approach: manufacturers should not be required to report names of for non-marketed products, and have left that optional. In addition it is optional to report product names for research payments. They will require manufacturers to report marketed names and therapeutic areas for all covered drugs devices, biologicals or medical supplies. This will require changes in manufacturers reporting systems and CMS has delayed implementation of this section until January 1, 2016.
Reporting of Stock, Stock Option or Other Ownership Interest
CMS has finalized the provision as proposed which requires reporting stock, stock option, or any ownership interests form of pay of payment or other transfer of value in distinct categories.