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July 07, 2014

Physician Payments Sunshine Act: CMS Proposes Removing CME Exemption, Some Speaker Pay May Still Fall Under "Indirect Payment" Exclusion

The evening before the Fourth of July holiday weekend, the Centers for Medicare and Medicaid Services (CMS) released the CY 2015 Medicare Physician Fee Schedule proposed rule. The 609-page document proposes a number of changes to the Physician Payments Sunshine Act, including deleting the specific exemption for payments made to speakers at accredited continuing medical education (CME) events.

Background on the CME Exemption

The Sunshine Act requires pharmaceutical and device manufacturers to report to CMS their direct and indirect payments or other transfers of value made to healthcare providers and teaching hospitals (covered recipients). In February 2013, CMS released the Final Rule of the Sunshine Act.

As we have detailed on Policy and Medicine numerous times, the Final Rule contains an exemption for payments to healthcare providers who serve as speakers for accredited continuing education programs, under section §403.904(g):

Payments or transfers of value provided as compensation for speaking at a CME program are not required to be reported, if all the following conditions are met:

  • (1) 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:
    • (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
    • (E) American Osteopathic Association
  • (2) The applicable manufacturer does not pay the covered recipient speaker directly.
  • (3) The applicable manufacturer does not select the covered recipient speaker or provide the third party (such as a continuing education vendor) with a distinct, special rule for payments related to continuing medical education programs.

CMS notes that speaker payments that do not meet the requirements must be reported under certain categories depending on which aspects of the exemption they lack. For example, payments that don't meet requirement (1) must be reported under the category "Compensation for serving as a faculty or as a speaker for an unaccredited and non-certified continuing education program." 

In the final rule preamble, CMS noted that "industry support for accredited or certified continuing education is a unique relationship." CMS initially agreed with the many commenters who stated that accredited or certified continuing education payments to speakers should not be reported because there are safeguards already in place, and they are not direct payments to a covered recipient.

Proposed Changes Related to CME

On July 3, 2014, CMS proposed to remove the above CME exemption, §403.904(g), "in its entirety" (at page 242).

As the Final Rule above shows, CMS picked five bodies which can accredit programs to fit under the reporting exemptions. However, CMS notes that since the Final Rule, other accrediting organizations have requested that payments made to speakers at their events also be exempted from reporting. "These organizations have stated that they follow the same accreditation standards as the organizations specified in the Final Rule."

Furthermore, other stakeholders have recommended removing the exclusion because removal would "allow for consistent reporting for compensation provided to physician speakers at all continuing education events, as well as transparency regarding compensation paid to physician speakers."

"Many stakeholders raised concerns that the reporting requirements are inconsistent because certain continuing education payments are reportable, while others are not," CMS states. "CMS' apparent endorsement or support to organizations sponsoring continuing education events was an unintended consequence of the final rule."

CMS states that part of its motivation in proposing to remove the CME exclusion is to avoid the redundancy in another section of the Final Rule. §403.904(i)(1) excludes indirect payments or other transfers of value where the applicable manufacturer is "unaware" of the identity of the covered recipient during the reporting year or by the end of the second quarter of the following reporting year.

Most notably, CMS states that they will consider speaker payments to be excluded from reporting "[W]hen an applicable manufacturer or applicable GPO provides funding to a continuing education provider, but does not either:

[1] select or pay the covered recipient speaker directly, or

[2] provide the continuing education provider with a distinct, identifiable set of covered recipients to be considered as speakers for the continuing education program."

In explaining its rationale for the change, CMS states: "This approach is consistent with our discussion in the preamble to the final rule, in which we explained that if an applicable manufacturer conveys 'full discretion' to the continuing education provider, those payments are outside the scope of the rule." In contrast, "when an applicable manufacturer conditions its financial sponsorship of a continuing education event on the participation of particular covered recipients, or pays a covered recipient directly for speaking at such an event, those payments are subject to disclosure."

CMS notes that they considered two alternative approaches to address this issue. First, CMS explored expanding the list of accrediting organizations by name. CMS believes "this approach might imply CMS's endorsement of the named continuing education providers over others." Second, CMS considered "articulating accreditation or certification standards that would allow a CME program to qualify for the exclusion." This is also problematic to CMS "because it would require evaluating both the language of the standards, as well as the enforcement of the standards of any organization professing to meet the criteria." 

CMS seeks comments on both alternatives presented, including commenters' suggestions about what standards, if any, CMS should incorporate.

Analysis:

This proposed change to the Sunshine Act disrupts a year and a half's worth of planning since the Final Rule. While much of the Sunshine Act remains mired in confusion, CMS' continuing education exemption specifically stated the accrediting criteria for companies looking to develop well-defined policies surrounding CME programs. This actually offered companies and physicians certainty that many other Sunshine Act provisions could use.

Why, for example, would CMS not have addressed the ambiguity surrounding how to report group meals? The proposed rule does not mention §403.904(h), which states that group meals are unreportable if the recipient's meal is "not separately identifiable" or if the meal is a "buffet." Companies have struggled with these terms all year.

Reporting for Speakers/Faculty at CME Events

In looking at the proposed CME changes and reading CMS' rationale for the changes, CME speaker and faculty fees appear to remain unreportable. CMS is proposing less definition and certainty surrounding the "proper" accrediting bodies, but this may not expand what companies must report.

In the proposal, CMS states that they will consider speaker payments to be excluded from reporting "[W]hen an applicable manufacturer or applicable GPO provides funding to a continuing education provider, but does not either:

[1] select or pay the covered recipient speaker directly, or

[2] provide the continuing education provider with a distinct, identifiable set of covered recipients to be considered as speakers for the continuing education program."

If you look at the Final Rule language in the Background section above, notice that this is the exact same requirements as (2) and (3). In other words, the proposal is essentially the same speaker/faculty policy as the current Final Rule, except CMS isn't specifically saying education events must be accredited by one of the specific five bodies (ACCME, AAFP, ADA, AMA, AOA). 

CMS said nothing to suggest they have changed their attitudes about the importance of CME or the aptitude of accrediting organizations to provide conflict-free education. CMS' main issue, according to the proposed rules, is that they do not want to appear to endorse a particular sponsoring organization, such as the ACCME, when other accrediting bodies follow similarly strict accrediting procedures, which may allow for the same firewalls between commercial support and educational content.

Large Concerns Remain

Unfortunately, absent the CME exemption, the proposed rule leaves too much ambiguity for CME stakeholders. CMS is proposing to replace the CME language with §403.904(i)(1), which excludes indirect payments or other transfers of value where the applicable manufacturer is "unaware" of the identity of the covered recipient during the reporting year or by the end of the second quarter of the following reporting year.

The problem is that CMS has not yet offered a specific definition of "indirect payments" or "awareness." CMS' examples of "awareness" in the Final Rule are so strict that by simply not asking for the names of participants at accredited CME events, a manufacturer may not meet the standard. Furthermore, the example used in the Final Rule for unaccredited grants states that companies who support programs for specialists in a specific city would have to report if they could figure out who those doctors were.  This would wreak havoc on local hospital based programs.

Without any clarity, and without any precedent in CMS' auditing discretion, we don't know how to interpret many vital aspects of the Sunshine Act.

The Final Rule recognized the ACCME standards for commerical support and the HHS OIG's Compliance Guidance.  The writers of this proposed rule may have changed, and thus be unaware of those strict guidances. CMS may be trying to compare accredited CME with ad boards and promotional speaker programs. But one big difference is in the contracting. Manufacturers have a signed direct contract with the HCP for ad boards and speaker programs.  Manufacturers do not engage in any contracting for CME other than with the CME provider. CMS' comments in the proposed rule seem to recognize that accredited programs do not directly pay speakers or select educational content, but we want to make sure this point is very clear. 

The CME exemption is  very important for CME attendees. CME providers who receive commercial support as part of the educational activity may also provide educational items, such as slides, abstracts, and handouts. Currently, the CME exemption excludes reporting of those items.  Without the specific exemption, learners may be less willing to participate in sessions where the value of the CME is being reported against them, despite the fact that the support for the program was independent. CMS may be unaware that collecting information on attendees to accredited CME events and assigning value to their attendance may severely hinder the free flow of medical information. 

Another impact of the proposed guidance would be on medical conventions. At conventions, for example, manufacturers become "aware" of participants through their exhibits. Any commercial support for those annual meetings, including general meeting support, may be considered reportable to anyone who visits the exhibit hall. This could also have the same effect to online sites that mimic conventions and have areas where "participants" visit on line exhibits.

Industry-supported CME remains a vitally important resource for doctors to learn cutting edge information at a rapid pace. Diminishing support has been shown to hinder the adoption of important new therapies. Our concern is that continuing medical education may significantly suffer because CMS has removed this one bit of certainty from the Sunshine Act Open Payments Program.

Comments

To be assured consideration, comments must be received at one of the addresses provided below, no later than 5 p.m. on September 2, 2014. In commenting, please refer to file code CMS-1612-P.

  • Electronically. You may submit electronic comments on this regulation to www.regulations.gov. Follow the instructions for "submitting a comment."
  • By regular mail. You may mail written comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, 2 Attention: CMS-1612-P, P.O. Box 8013, Baltimore, MD 21244-8013.
  • By express or overnight mail. You may send written comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1612-P, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.

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What happens if the CME activity is directly funded by the CME Provider? Is reporting required then? (Speaking mostly of the buffet meals provided at CME activities?)

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