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

Dental Device Manufacturers and the Sunshine Act

October 23, 2015
Ruselle W. Robinson

The Sunshine Act/Open Payments reporting rule for payments and transfers of value by applicable manufacturers appears to be straightforward:  applicable manufacturers of covered products must report payments and other transfers of value they make to physicians if those payments and/or transfers of value meet certain thresholds.

Yet, many applicable manufacturers of dental devices are not certain they have a reporting obligation under the Sunshine Act.  Their uncertainty can be traced to the definition of “covered device”:

“Covered device” means any device for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Plan (CHIP), or a waiver of such plan, either separately (such as through a fee schedule or formulary) or as part of a bundled payment (for example, under the hospital inpatient prospective payment system or the hospital outpatient prospective payment system) and which, by law, requires premarket approval by or premarket notification to the FDA.

The key question for dental device manufacturers, which include dental laboratories, is whether payment is available under Medicare, Medicaid or CHIP for their devices.  If payment is not available under at least one of the three federal insurance programs, then the dental device is not a “covered device” under the Sunshine Act and the manufacturer does not have a reporting obligation.

Medicare does not generally cover dental services.  And while Medicare covers certain dental devices–for treatment of sleep apnea, for example–many dental devices are not covered.

What about Medicaid and CHIP?  Medicaid is a state-managed health insurance program for residents with poverty-level income.  The federal government partially funds state Medicaid programs and requires states to provide Medicaid dental services to children under the age of 19 as a condition of federal funding.  However, the level of dental coverage for children varies on a state-by-state basis.  Some states also provide limited Medicaid dental coverage to adults, while others provide none.

CHIP generally covers children with family incomes just above the poverty level. As with Medicaid, CHIP is a state administered program funded, in part, by the federal government.  The federal government requires states with CHIP to provide dental services to children under 19.  States, however, have latitude to define their CHIP dental benefits.  Often, but not always, state dental benefits under CHIP track that state’s Medicaid dental benefits for children.

CHIP generally covers children with family incomes just above the poverty level. As with Medicaid, CHIP is a state administered program funded, in part, by the federal government.  The federal government requires states with CHIP funding to provide dental services to children under 19.  States, however, have latitude to define their CHIP  dental benefits.  Often, but not always, state dental benefits under CHIP track that state’s Medicaid dental benefits for children.

In the commentary to the Sunshine Act regulations, CMS had this to say about determining whether Medicare, Medicaid or CHIP pays for a particular device:

       We believe that manufacturers are generally aware when payment is available for their drugs, devices, biologicals, or medical supplies under a Federal health care program.

In other words, it is the manufacturer’s responsibility to determine whether federal health care program payment is available for the devices it manufactures.

Because the federal reimbursement landscape for dental devices is confusing, I contacted CMS and asked if CMS has any advice on the best way to determine whether reimbursement is available under a federal health care program for a particular device.  Here is the CMS response:

      CMS cannot advise entities on specific scenarios regarding reporting payments or other transfers of value. Applicable manufacturers and applicable group purchasing organizations (GPOs) should make a good faith effort to report payments or other transfers of value accurately to CMS. Applicable manufacturers and applicable GPOs may submit an assumptions document clarifying any assumptions made when reporting.

The conclusion:  Make a good faith effort to determine whether federal payment program is available for your device and include an assumptions document when you submit your payment report to CMS.

Do you have any issues you would like to see addressed in this blog?  Send me a message and I will see if I can be of help.

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