Summary

The Centers for Medicare and Medicaid Services (“CMS”) issued a proposed rule that includes a plan to eliminate the continuing medical education (“CME”) exclusion to the reporting requirements under the federal Physician Payment Sunshine Act (“Sunshine Act”). If the CME exclusion is eliminated, many payments made by applicable manufacturers to covered recipients may have to be reported to CMS through the Open Payments program on an annual basis.

The proposed changes to the Sunshine Act were included as part of a proposed rule to update the Medicare physician fee schedule for calendar year 2015.

The Sunshine Act was enacted as part of the Patient Protection and Affordable Care Act, and included a requirement for certain manufacturers of drugs, devices, biologics or medical supplies covered by Medicare, Medicaid or CHIP to report payments or transfers of value to physicians, dentists and teaching hospitals (called “covered recipients”) on an annual basis through the CMS Open Payments program. Saul Ewing has previously written alerts related to the Sunshine Act available here and here.

Under the current continuing education exclusion in the Sunshine Act regulations, applicable manufacturers need not report payments or transfers of value to a covered recipient for speaking at a continuing education event to CMS so long as the following conditions are met:

• The event meets the certification requirements and standards for continuing education for one of the following organizations: the Accreditation Council for Continuing Medical Education; the American Academy of Family Physicians; the American Dental Association’s Continuing Education Recognition Program; the American Medical Association; or the American Osteopathic Association;
• The applicable manufacturer must not pay the physician directly; and
• The applicable manufacturer must not select the physician to speak or provide a third party with a distinct, identifiable set of individuals to be considered as speakers for the continuing education program.

In the preamble to the proposed rule, CMS stated that the current exclusion had the “unintended consequence” of CMS’ apparent endorsement or support of organizations sponsoring continuing education events.

In proposing to eliminate the continuing education exclusion, CMS stated that an existing Sunshine Act regulation exclusion may address many continuing education issues. Pursuant to 42 CFR §403.904(i)(1), transfers of value made where the applicable manufacturer is “unaware” of or “does not know” the identity of the physician during the reporting year, or by the end of the second quarter of the following reporting year, are excluded from reporting. CMS noted in the proposed rule preamble that, “When an applicable manufacturer or applicable [group purchasing organization] provides funding to a continuing education provider, but does not either select or pay the covered recipient speaker directly, or provide the continuing education provider with a distinct, identifiable set of covered recipients to be considered as speakers for the continuing education program, CMS will consider those payments to be excluded from reporting under §403.904(i)(1).”

In the preamble to the proposed rule, CMS stated that it considered two other approaches to addressing the current continuing education exclusion. First, it considered expanding the list of certifying organizations. However, CMS felt that this would imply CMS’ endorsement of certain continuing education providers over others. Second, CMS considered expanding the certifying organizations by stating accreditation or certification standards to permit a CME program to qualify. However, CMS stated this option would be difficult to monitor.

CMS is seeking comments to the proposed rule, which must be submitted on or before September 2, 2014.

Transparency in health care remains an important element of the policy debate. At least one industry group, the CME Coalition, has expressed concern with the proposed elimination of the CME exclusion. As manufacturers prepare for compliance with the Sunshine Act reporting requirements and covered recipients prepare for the public reaction that may result from the initial disclosures that are made, the proposed modification published by CMS for CME expenditure disclosure may spur additional debate requiring industry support for continuing medical education programming.