Life Science Compliance Update

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August 12, 2013

Physician Payment Sunshine Act: CMS Teleconference Offers Future Clarification and Links to New Patient-Physician Brochures

Last week, the Centers for Medicare & Medicaid Services (CMS) held a conference call regarding the implementation of its Open Payments program (a.k.a. the Physician Payments Sunshine Act). CMS officials went through a slide show outlining some updates and summaries of the final Sunshine Rule, however, the majority of this information was not new. You can download the presentation here.  

CMS did provide some clarification on a few questions from conference call participants, but mostly indicated that the agency would be issuing further guidance on some topics or asked individuals to submit questions for further FAQs (see below).

This is somewhat problematic given that reporting has begun and numerous questions regarding reporting, tracking, and implementation are still uncertain. Manufacturers, third parties, and various stakeholders at this point all have varying interpretations of certain provisions and this will probably lead to confusion and mistakes as we move forward. Only time will tell how CMS will treat such mistakes—as penalties or part of the "learning curve."

An audio recording and written transcript of the Call will be posted here, once it is available. CMS noted that the information contained in the presentation was a "summary" and was "not intended to override or take the place of the final rule which is the official source for requirements and information on the program."

In addition to the call, CMS posted new FAQs, which we previously summarized, and also published two brochures on the Sunshine Act: one for patients and one for physicians (discussed below).

Questions and "Answers"

CMS hesitated to answer a number of questions, and asked participants to formally submit them for FAQs. Below are questions and topics for which CMS asked to submit an FAQ or which the agency said guidance is forthcoming:

  • Guidance regarding what is considered a "large-scale" conference for the purpose of the buffet meal tracking exception.
  • Guidance as to how the awareness standard for reporting applies to attendee meals at CME conferences.
  • CMS will produce a FAQ regarding payments/transfers of value made to various hospital operating facilities that share a Tax ID number with a facility listed on the Teaching Hospital list
  • Guidance regarding the therapeutic categories medical device and supply manufacturers will be able to use for "related covered product" (for education, marketing, research)
  • CMS will produce an FAQ regarding stock purchase options from manufacturers for family members of covered recipients

CMS was able to answer and provide guidance on several topics, organized below.

NDC Codes


  • When reporting a payment or transfer of value associated with a drug, the manufacturer may choose any NDC Code associated with that drug, even where the drug may have different dosages

Device Training & Loans

  • If training on a device is included in the device's purchase price, there is no need to report.
  • If training on a device is not included in the device's purchase price and the training is provided to physicians at a teaching hospital, report at the physician level, not the teaching hospital level, unless some transfer of value was also conferred to the teaching hospital.
  • Questions regarding valuation of a loan of a medical device for more than 90 days should be submitted to the CMS Help Desk



  • If the research agreement includes research protocol training for physician researchers, such training should be reported using the research template, even if the training is useful or valuable outside of the specific research project

With respect to promotional payments (e.g., speaking, consulting), one participant noted that industry may classify such payments as "honoraria" or "services other than consulting," and expressed his concern that consumers might not understand that such payments were for promotion. CMS explained that it will be looking at how companies classify such payments in their Assumption Documents (which are voluntary), and may choose to provide additional guidance in the future based on how companies are classifying promotional payments.

With respect to research payments, one participant noted that in the Research Payment templates, item 36 includes a description of the type of research payment made. However, CMS clarified that this is not a required field.

Nevertheless, the template says "contextual category" for the research payment or transfer of value. CMS notes in the template that "There can be multiple contextual categories for this research reported; however, for every Expenditure Category reported, an Expenditure Category percentage must also be reported. Category and percent represented as a single number for the category followed by the 2 or 3 digit percentage value (eg. 1-90 or 1-100). The categories include:

  • "1" = Professional Salary Support;
  • "2" = Medical Research Writing or Publication;
  • "3" = Patient Care;
  • "4" = Non-patient Care;
  • "5" = Overhead;
  • "6" = Other

Updates from CMS

After giving some brief background and describing relationships between industry and physicians, CMS noted that the objectives of the Open Payments program are to "Make financial relationships transparent on a national scale" and to "Give consumers the information needed to ask questions and make more informed decisions about their healthcare professionals."

CMS explained that its role in the program is to "Remain neutral and present the data on a public website" and to "Ensure reporting and disclosure are complete, accurate, and clear." CMS then explained that the program will publish three types of reporting categories:

  1. General Payments: payments or other transfers of value not made in connection with a research agreement
  2. Research Payments: payments or other transfers of value made in connection with a research agreement
  3. Ownership & Investment Interests

Although the law does not directly apply to physicians, CMS recommended that doctors begin tracking all interactions they have with industry involving payments or transfers of value to ensure accuracy. CMS reiterated that the Sunshine Act affects physicians even if they do not treat Medicare or Medicaid patients, and noted that medical residents are excluded from the program.

CMS also published a brochure for physicians Pub #11709-P: Information Physicians Can Use on: Open Payments (Physician Payments Sunshine Act). The brochure recommends that physicians register with CMS to receive a preview of the data to be made public and encouraged physicians to:

  • Become familiar with the information that will be reported about you.
  • Download and use the Open Payments Mobile for Physicians for an easy-to-use tool to track transfers of value on your mobile phone.
  • Subscribe to the listserve to receive updates regarding the program.
  • Review the teaching hospital list to determine if manufacturers will be required to report transfers of value made to your hospital.
  • Register with the Open Payments System (early 2014).
  • Look at the information manufacturers and GPOs submitted about you (2Q 2014).
  • Work with manufacturers and GPOs to make sure the information submitted about you is correct (2Q 2014).
  • Review the information companies may submit on your behalf prior to public posting.
  • Learn what to do if you disagree with the information that's submitted. When the review period starts in 2014, you'll be allowed to dispute information that you don't think is accurate or complete

The brochure explains to physicians that Open Payments does not "make assumptions or draw conclusions about the information reported. CMS will simply make the program available to the public to create transparency and allow interested stakeholders to analyze, monitor, and use the data."

In discussing reporting requirements for manufacturers, CMS noted that companies will have to report the following information of a physician:

  • Full legal name (as appears in NPPES)
  • Primary and specialty
  • Primary business address
  • NPI (as appears in NPPES)
  • State professional license number(s)
  • Email address

The email address is not required by the final regulation, but was added in the "template" reporting requirements. Thus, manufacturers will need to include a physician's email address as well, which CMS likely included as a way to improve communication and resolve disputes.

CMS also explained its "Mobile Apps," pointing out that physician's can enter their transactions and create a QR code. Then, a member from industry can scan the physician's QR code, which will transmit whatever payment data and information the physician captured in their account. CMS hopes this will assist doctors keep track of interactions and help industry potentially resolve any disputes before reporting is due.

Of course, a physician must take time away from patients, research, or education, to enter such information.

The agency noted that the App is for personal information collection and serves as a storage depository only. It does not interact with CMS systems, CMS contractors, and cannot be used directly for data reporting to CMS or its contractors. Further, CMS noted that it will check the accuracy of data stored in the app, and is not responsible for protecting data stored in the app.

Interestingly, CMS reiterated that "[Doctors] have the sole responsibility for the accuracy and completeness of the data submitted to CMS about you by the health care industry under Open Payments," despite the fact that the law does not apply to physicians

Patient Brochure

CMS also published a brochure on Open Payments for Patients, Pub #11710: Information Patients Can Use on: Open Payments, which explains that patients will be able to "look up your physicians, see if they have any of these relationships, and be more informed about how these relationships may impact your health care decisions. This program will put information into your hands and encourage you to discuss these relationships with your physician."

CMS noted that the program will not be affected by the Open Payments program. Further, CMS noted that a patient's physician should not "make any changes to your health care because of this program or any financial relationships with the health care industry. Changes in your prescriptions or treatments should be based on your medical issues, diagnoses, and physicians' educated decisions," CMS wrote.


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