CMS has finalized four revisions to the Sunshine Act (Open Payments) regulations as part of the 2015 Medicare Physician Fee Schedule Final Rule.

These revisions are effective as of October 31, 2014, and will be implemented for the 2016 program year, with reporting to CMS in 2017.

Importantly, CMS has removed the exclusion for continuing medical education (CME) speaker compensation from manufacturers’ transparency reports. The life-sciences industry had pushed hard for this exclusion before the final rule’s publication in February 2013, and specifically in response to the suggestion from CMS that industry-funded accredited CME faculty compensation counted as reportable indirect payments despite numerous accreditation agency controls in place to prohibit industry influence over CME meetings.

After concerns raised that only certain educational organizations qualified, CMS deleted the exclusion entirely, noting that these types of payments are still non-reportable when “an applicable manufacturer conveys ‘full discretion’ to the continuing education provider.”

In other words, even though the specific CME exclusion is gone, most payments for educational speaker compensation will likely be unreportable.

The agency stated that when a reporting entity “provides funding to a continuing education provider, but does not either select or pay the covered recipient speaker directly, or provide the continuing education provider with a distinct, identifiable set of covered recipients to be considered as speakers for the continuing education program, CMS will consider those payments to be excluded from reporting.”

This is a broader approach to excluding payments than set forth in the original rule, which focused on entirely “unrestricted” donations.

As a result, CMS may now be showing a willingness to back off its incredibly narrow interpretation of the “indirect-payments” exclusion by suggesting that payments to speakers at educational events should be excluded from reporting if applicable manufacturers are not actively involved in selecting, paying, or setting criteria for the speakers.  That is, mere funding and knowledge would not be enough to trigger a reporting duty.

Still, physician speaker compensation and physician attendees fees that have been subsidized through a CME organization by an applicable manufacturer should be reported unless the payment meets the indirect-payment exclusion, according to this final rule.

CMS has promised sub-regulatory guidance specifying tuition fees provided to physician attendees that have been generally subsidized at continuing education events by manufacturers and that are not expected to be reported.

The other finalized changes to the Sunshine Act regulations include:

  1. eliminating a definition determined to be duplicative,
  2. requiring identification of the marketed name for associated drugs and devices, and
  3. requiring the reporting of certain forms of payments to physicians and teaching hospitals to collect more specific data about these payments.

More information is available in our briefing on the proposed changes and CMS’s press release on the final rule.

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