Life Science Compliance Update

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February 01, 2013

Physician Payment Sunshine Act: Final Rule Released, CMS Limits Reporting Requirements for CME

Sunshine
The Centers for Medicare & Medicaid Services (CMS) announced today the final regulations to implement the Physician Payment Sunshine Act—Section 6002 of the Affordable Care Act.  You can find the final rule here.  Listening to the overwhelming majority of comments with respect to the continuing medical education (CME) industry, CMS has exempted payments or other transfers of value provided as compensation for speaking at a continuing education if certain conditions are met—which are consistent with the ACCME’s accreditation standards and standards for commercial support.  

In announcing the final rule, the CME Coalition applauded CMS for limiting the reporting requirements for CME in its final rule on the Physician Payment Sunshine Act.  In reaching today’s decision to exclude accredited CME activities that meet the definition of “indirect payments” from the purview of this law, CMS has acknowledged the views of over 350 comments from patients, physicians, and other healthcare stakeholders.  These stakeholders argued that it was inappropriate and would prove highly damaging to treat indirect CME payments in the same manner as direct industry payments to physicians under the Act. 

Andrew Rosenberg, Senior Advisor to the CME Coalition stated, “We believe that today’s action by CMS upholds the original intent of Congress in passing the Sunshine Act to require reporting of direct payments to physicians, but not to include grants in support of accredited CME.” Rosenberg continued, “Today’s decision recognizes the importance of keeping medical professionals informed about the latest treatments available for their patients through CME, and makes clear that pharmaceutical companies, medical device manufacturers, and other stakeholders should be encouraged to support CME.” 

In order to give applicable manufacturers and applicable GPOs sufficient time to prepare, data collection will begin on August 1, 2013.  Applicable manufacturers and applicable GPOs will report the data for August through December of 2013 to CMS by March 31, 2014 and CMS will release the data on a public website by September 30, 2014.  CMS is developing an electronic system to facilitate the reporting process.

In the coming days, we will be posting several stories about the final regulations with analysis into the differences between the proposed and finalized version of the rule.  Below is our analysis on the final rule and continuing medical education (CME). 

Final Sunshine Rule and CME - 42 CFR §403.904(g) 

In finalizing the rule, CMS created a new section, 42 CFR §403.904(g) Special Rules for payments or other transfers of value related to continuing education programs.  Under this new section, payments or other transfers of value provided as compensation for speaking at a continuing education program are not required to be reported, if all of the following conditions are met: 

                      i. The event at which the covered recipient is speaking meets the accreditation or certification requirements and standards for continuing education of one of the following:

  1. The Accreditation Council for Continuing Medical Education (ACCME).
  2. The American Academy of Family Physicians.
  3. The American Dental Association's Continuing Education Recognition Program.
  4. The American Medical Association.
  5. The American Osteopathic Association.

                    ii. The applicable manufacturer does not pay the covered recipient speaker directly.

                   iii.The applicable manufacturer does not select the covered recipient speaker or provide the third party (such as a continuing education vendor) with a distinct, identifiable set of individuals to be considered as speakers for the continuing education program. 

Payments or other transfers of value that do not meet all of these requirements must be reported as required by this section.  If the payment is for an education program as noted in (g)(1)(i), but the manufacturer pays the speaker directly (g)(1)(ii) or provides a list of speakers (g)(1)(iii), or both, the payment must be reported in the category “Compensation for serving as faculty or as a speaker for an accredited or certified continuing education program.” 

Payments or other transfers of value that do not meet the accreditation requirements and standards for CE noted in (g)(1)(i) should be reported under the nature of payment category “Compensation for serving as a faculty or as a speaker for a unaccredited and non-certified continuing education program." 

Payments or other transfers of value for speaking engagements not related to medical education should be reported under the nature of payment category “Compensation for services other than consulting, including serving as a speaker at an event other than a continuing education program.”

42 CFR §403.904(h) Special rules for reporting food and beverage.

When allocating the cost of food and beverage among covered recipients in a group setting where the cost of each individual covered recipient’s meal is not separately identifiable, such as a platter provided to physicians in a group practice setting, applicable manufacturers must calculate the value per person by dividing the entire cost of the food or beverage by the total number of individuals who partook in the meal (including both covered recipients and non-covered recipients, such as office staff).

The per person value of the meal must be reported as a payment or other transfer of value only for covered recipients who actually partook in the food or beverage.

Applicable manufacturers are not required to report or track buffet meals, snacks, soft drinks, or coffee made generally available to all participants of a conference or similar events where it is difficult to identify the identity of those who partook in the offering.  

Discussion 

In finalizing the above new section for CME, CMS noted that “an indirect payment made to a speaker at a continuing education program is not an indirect payment or other transfer of value for the purposes of this rule and, therefore, does not need to be reported, when all of the following conditions are met:  

(1)  the program meets the accreditation or certification requirements and standards of the ACCME, AOA, AMA, AAFP or ADA CERP;

(2)  (2) the applicable manufacturer does not select the covered recipient speaker nor does it provide the third party vendor with a distinct, identifiable set of individuals to be considered as speakers for the accredited or certified continuing education program; and

(3)  the applicable manufacturer does not directly pay the covered recipient speaker. 

CMS stated that “when applicable manufacturers suggest speakers, they are directing or targeting their funding to the speakers, so these payments will be considered indirect payments for purposes of this rule.”  

“Conversely, when they do not suggest speakers, they are allowing the continuing education provider full discretion over the CME programming, so the payment or other transfer of value will not be considered an indirect payment for purposes of these reporting requirements.”  

Additionally, since industry support of CME programs that meets all three requirements discussed previously will not be considered indirect payments or other transfers of value for the purposes of reporting, “the awareness standards for indirect payments are not applicable to such support.”  CMS believes that this approach “will greatly reduce the number of payments to speakers at accredited or certified continuing education programs that must be reported.” 

CMS explained that applicable manufacturers “will not be responsible for reporting payments made to CME vendors that are used to subsidize attendees' tuition fees for continuing education events.”  However, as explained in the discussion of the nature of payment categories, “payments or other transfers of value associated with attendance of an event (such as travel and meals) must be reported as required.” 

With regard to unaccredited and non-certified education, CMS believes “that since this type of education program does not require the same safeguards as an accredited and certified program, payments or transfers of value should be reported as required for any other payment or other transfer of value.”  If the payment or other transfer of value is made indirectly, it will be subject to the same reporting requirements for all indirect payments.”  

Finally, CMS did not agree with comments “that payments related to REMS with elements to assure safe use that require prescriber education should have a blanket

exclusion from the reporting requirements”  CMS recognized that REMS are required by FDA for some prescription drug products to ensure that the benefits of a drug outweigh the risks and that REMS often requires a sponsor to inform or educate health care providers about the risks associated with a product.”  

However, CMS believes that “payments made in connection with prescriber education required by REMS should be reportable on the same basis as other education payments.”  For example, if a “sponsor directs the choice of a program speaker, or pays for covered recipients' meals or transportation to a REMS educational program, such payments would be reportable.”  However, applicable manufacturers are not required to report the provision of written materials that have been approved by FDA for distribution to physicians, such as Dear Healthcare Provider letters. 

CMS wrote that, “other REMS educational materials may be excluded if they fall within the exclusion for materials intended for patient use described in §403.904(i)(4).”

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very appreciative.
It was very informative and helpful
Thank You

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