Life Science Compliance Update

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September 22, 2014

Physician Payments Sunshine Act: Bipartisan Members of Congress Introduce Bill to Exclude Educational Materials From Reporting, Including CME and Medical Texts

CME and Texts

Two bipartisan efforts in Congress underscore the importance of up-to-date medical education. On Thursday, Reps. Michael Burgess (R-TX) and Frank Pallone (D-NJ) sent a letter to the Centers for Medicare and Medicaid Services (CMS), to voice concern about the agency's plan to eliminate the continuing medical education (CME) exemption from the Sunshine Act. On Friday, Reps. Burgess and Allyson Schwartz (D-PA) introduced bipartisan legislation (H.R. 5539) to exempt medical textbooks and journals, as well as indirect payments that pharmaceutical and device manufacturers offer to CME providers, from Sunshine Act reporting requirements.

The Sunshine Act lists as one of its exclusions "educational materials that directly benefit patients or are intended for patient use," which do not have to be reported. However, CMS has stated that they do not believe medical textbooks and journal articles fall within this educational carve out. CMS stated these items only have "downstream benefits" for patients as compared to "wall models and anatomical models," which are intended to be used with the patient and are excluded from reporting requirements.

Recently the American Medical Association (AMA) and over 100 medical societies wrote a letter to CMS stating: “The Agency’s decision to not cover these materials under the educational materials exclusion is inconsistent with the statutory language on its face, congressional intent, and the reality of clinical practice where patients benefit directly from improved physician medical knowledge.” The AMA and co-signing associations also urged CMS to reconsider removing the CME exemption from the current Final Rule. They voiced their concern that revoking the reporting exclusion for CME would have a “significant chilling effect” on continuing education.

H.R. 5539 would make the Sunshine Act consistent with these goals. Currently there are 12 exclusions from Sunshine reporting, including de minimis payments (under $10) and product samples. The statute would be updated as follows:

Transparency Reports and Reporting of Physician Ownership or Investment Interests, Sec. 1128G. [42 U.S.C. 1320a-7h]

(B) Exclusions.—An applicable manufacturer shall not be required to submit information under subsection (a) with respect to the following:

  • (iii) Educational materials that directly benefit patients or are intended for patient use, including peer-reviewed journals, journal reprints, journal supplements, and medical textbooks;
  • (xiii) A transfer of anything of value to a covered recipient who is a physician if the thing of value is intended solely for purposes of providing continuing medical education to the physician.

The amendments would apply with respect to transfers of value made on or after the date of the enactment of this Act. The bill has been referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means. 

View the bill here:  Download H. R. 5539

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