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

What’s New: Sunshine Act Regulatory Changes

July 29, 2014
Ruselle W. Robinson

In my post of July 7, 2014, I wrote about proposed amendments to the Sunshine Act regulations that subsequently appeared in the July 11, 2014 Federal Register.

Today I am giving more detail about the four proposed modifications to the Sunshine Act regulations.  I will pay particular attention to revisions to continuing education reporting requirements.

I.  Continuing Education.

At present, the Sunshine Act regulations exempt reporting of  payments or other transfers of value given to physicians for speaking at continuing education programs that meet three conditions:

a.  The continuing education event meets the accreditation or certification standards for one of the following organizations:

(i)         The Accreditation Council for Continuing Medical Education

(ii)        The American Academy of Family Physicians

(iii)       The American Dental Association’s Continuing Education Recognition Program

(iv)       The American Medical Association

(v)        The American Osteopathic Association

       b.  The applicable manufacturer does not pay the covered recipient speaker directly.

c.  The applicable manufacturer does not select the covered recipient speaker or provide a distinct, identifiable set of individuals to be considered as speakers for the continuing education program.

However, since the continuing education regulation became effective, other accrediting organizations have petitioned CMS to be added to the list of five organizations set out in the regulation.  These other accrediting organizations have stated that they follow the same standards as the five organizations named in the regulation.

Other commentators have urged CMS to remove the exemption, arguing for consistency and transparency in reporting of physician compensation for speaking at continuing education events.

Finally, CMS is concerned that naming the five organizations in the regulation has been perceived as an endorsement of those organizations, which was not CMS’ intent.  CMS believed it was expressing a consensus of the comments it received on the original proposed regulation.

In its preamble to the proposed regulation, CMS states that it will use another exclusion in the existing regulation to address speaker compensation at continuing education events. That exclusion exempts indirect payments or other transfers of value from reporting where the applicable manufacturer does not know the identity of the covered recipient “during the reporting year, or by the end of the second quarter of the following reporting year.”

CMS says that “[W]hen an applicable manufacturer or applicable GPO provides funding to a continuing education provider, but does not either select or pay the covered recipient directly, or provide the continuing education provider with a distinct, identifiable set of covered recipients to be considered as speaker for the continuing education program, CMS will consider those payments to be excluded  from reporting…”.

CMS also is inviting comments on two alternatives to elimination of the continuing education exclusion, even though CMS considered and rejected those alternatives before deciding on its present proposal:

    • Expand the list of named organizations
    • Create a list of approved organizations by articulating standards for accreditation that, if met, would entitle an organization to qualify for the exclusion. For this alternative, CMS seeks proposals on standards it could adopt to qualify an organization for accreditation.

II.  Reporting of Marketed Name. 

CMS proposes to require applicable manufacturers of devices and medical supplies to report the marketed name of their products.

Currently, applicable manufacturers must report the marketed name for each drug or biological related to a payment or other transfer of value.  However, when it comes to devices or medical supplies, the applicable manufacturer may choose among three options for reporting:  the marketed name, product category, or therapeutic area.  The terms “product category” or “therapeutic area” are not defined, which could create confusion in the reported data.  Under the revised regulation, reporting of the marketed name will be required for devices and medical supplies, and reporting of product category and therapeutic category will become optional.

The purpose of this change is to have consistency across drugs, biologicals, devices and medical supplies in reported data

III.  Stock, Stock Options and Other Ownership Interests.  

Reported at present as a single category, CMS proposes to disaggregate these payments into distinct categories.  The purpose is to make more specific data available to the public.  CMS requests comments from the public on whether they find the proposed change to be useful, and from applicable manufacturers on whether the change would present operational or other issues.

IV.  Deletion of Definition of “Covered Device”. 

CMS is proposing to delete the definition of “covered device” as duplicative of definition of  “covered drug, device, biological or medical supply” in the same section.

You can view the CMS proposal on the Sunshine Act at 42 Federal Register 40383, which is page 67 of a 224 page document.  You can also use this link to the Federal Register webpage and scroll down in the Table of Contents to III: Other Provisions of the Proposed Regulations and then to (I) Reports of Payments or Other Transfers of Value to Covered Recipients:


Comments are due by 5 p.m., September 2, 2014.  Submissions can be made by hand or courier, electronically, by first class mail or by overnight delivery service.  Fax submissions will not be accepted.  Instructions for submission follow the Table of Contents in the linked document.

CMS intends to adopt the revised regulations in time for the Sunshine Act reporting year beginning January 1, 2015.


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