A blog by attorneys for anyone interested in or affected by The Sunshine Act.

CMS Issues Final Amendments to Sunshine Act Regulation

November 28, 2014
Ruselle W. Robinson

CMS recently published in the Federal Register final amendments to the Sunshine Act regulation.  The proposed amendments first appeared in the July 11, 2014 Federal Register.  I wrote about the proposed amendments in my post of July 29, 2014, which you can find here: http://www.sunshineactpbl.com/whats-new-sunshine-act-regulatory/

The proposed amendments covered four areas:  reporting of certain continuing education payments for speakers, reporting of marketed name of devices and medical supplies, disaggregation of physician ownership interest classifications into separate reporting categories, and deletion of the definition of “covered device”.

The final amendments that CMS adopted were very close to the proposed amendments in all four areas.  The new reporting requirements will be effective for the 2016 reporting year.  That means data collection under the new rules will begin January 1, 2016 and be reported to CMS in early 2017.

You can review CMS commentary on the final amendments here: https://www.federalregister.gov/articles/2014/11/13/2014-26183/medicare-program-revisions-to-payment-policies-under-the-physician-fee-schedule-clinical-laboratory#p-1686

Of the proposed amendments, the most controversial by far was changing the reporting requirements for continuing education payments, which is where I will begin.

I.  Continuing Education

Back in 2011, CMS agreed to exclude from reporting industry payments or transfers of value provided as compensation for speakers at continuing education programs. To qualify for the exclusion,  the payments had to meet three criteria:  the continuing education event was certified or accredited by one of five organizations specifically named in the regulation, the industry sponsor did not pay the covered recipient speaker directly, and the industry sponsor did not exercise direct or indirect control over the selection of the speaker(s) who appeared on the program. This reporting exclusion became known as the CME Exemption.  In July of this year, CMS proposed doing away with the CME Exemption, citing (i) the unintended endorsement of the five accrediting organizations named in the regulation, and (ii) the distortion the exemption created in reported data on payments to continuing education speakers.

The final amendment eliminates the CME Exemption.  CMS determined the CME Exemption was redundant.  Under a separate exemption, if an applicable manufacturer or applicable group purchasing organization makes an unrestricted donation to a continuing education organizer, then the donation is not reportable even if the donation is used, in part, to pay speakers.  It does not matter whether the applicable manufacturer or applicable group purchasing organization learns the name of the speaker at a later date.  CMS will consider the unrestricted donation to the organizer to be exempt and excludable from reporting. 

II.  Reporting of Marketed Names

CMS received few comments on the proposed reporting of marketed names of devices and medical supplies.  The final amendment requires reporting of marketed names of devices and medical supplies that qualify as “covered products.”  Covered products are products for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (CHIP).

Reporting of marketed names for non-covered drugs, devices, biologicals or medical supplies will continue to be optional.  Finally, the marketed name, therapeutic area, or product category of a device or medical supply will be optional when a manufacturer is reporting research payments.

III.  Physician Ownership Classifications

Currently, physician ownership data is aggregated into one catch-all “ownership” category.  CMS proposed reporting of ownership data in distinct categories:  stock, stock option, any other ownership interests.  CMS believes disaggregating the ownership data will make the data more useful to consumers.  Commentators agreed with the CMS proposal.  Therefore, the final amendment establishes separate reporting categories for stock, stock option, and any other ownership interests.

IV.  Deleting Definition of Covered Device

CMS proposed deleting the definition of “covered device” because it was duplicative of the definition of “covered drug, device, biological or medical supply”.  The proposal proved to be non-controversial.  The final regulation removes the “covered device” definition.

I will continue to keep you aware of Sunshine Act developments as they occur.

Comments

Kronner Medical Mfg says:

there is some confusion in hospitals regarding purchase of products from physician owned companies not associated with the hospital and it is impacting my company R. =Kronner pres Konner Mecical mfg

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