The Sunshine Act, now called Open Payments, does not directly change or prohibit relationships between manufacturers, physicians, teaching hospitals, or continuing medical education providers. Rather, the legislation and regulations require applicable pharmaceutical, biological, and device manufacturers, and group purchasing organizations, to report certain payments they make to physicians or teaching hospitals. Manufacturers were required to begin tracking their payments to physicians and teaching hospitals on August 1, 2013. They will collect data through December 31, 2013 (with the first report due March 31, 2014). Reporting is required annually thereafter. A manufacturer or GPO that fails to report or reports inaccurately may face annual fines up to $1.15 million.

Once manufacturers collect, record, and report the required information, the Center for Program Integrity at the Centers for Medicare & Medicaid Services, which issued the final regulations and is responsible for oversight and implementation of them, will aggregate payments to all physicians and teaching hospitals and post them on a searchable, public Web site after September 30, 2014.

The act’s definition of “physician” includes all licensed medical and osteopathic doctors, dentists, dental surgeons, podiatrists, optometrists, and chiropractors, regardless of whether they are currently practicing or whether they are enrolled with CMS. Non-U.S. physicians are excluded, but several countries have enacted similar legislation (e.g., France, U.K., Slovakia, Russia, and the Netherlands). It does not apply to medical residents, pharmacists, physician’s assistants, nurses, or nurse practitioners. However, CMS recently clarified in its Frequently Asked Questions page that “fellows” are not considered residents, and therefore, payments to fellows are reportable.

Open Payments and CME

The Sunshine Act also requires applicable manufacturers and GPOs to report certain “indirect payments” or payments made to third parties or entities. Specifically, CMS indicated in the final rule several “nature of payment” categories that applicable manufacturers must select to describe and explain the nature of the payment and relationship they have with a physician or teaching hospital for a particular transaction. In the final rule, CMS created an exception and new rules for payments related to accredited or certified continuing medical education.

Payments to speakers or faculty of certain accredited CME programs are exempt or excluded from reporting if three conditions are met.

1. The CME activity or “event” for which a physician is a speaker or faculty must “meet the accreditation or certification requirements and standards for continuing education” of an accreditation body (Final Rule 9524). In the final rule, CMS listed only five accrediting bodies: 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, and the American Osteopathic Association.

2. An applicable manufacturer providing commercial support for a CME program may not pay the physician speaker or faculty directly.

3. The applicable manufacturer may not select the physician speaker or faculty or provide a third party or CME provider with a distinct, identifiable set of individuals to be considered as speakers for the CME program.

The latter two conditions are noncontroversial for ACCME-accredited providers because the ACCME Standards for Commercial Support explicitly prohibit direct payment or any control or input by a commercial supporter over any content or speakers and faculty. This is particularly important because the AAFP, AOA, and AMA have all formally adopted the ACCME SCS.

Consequently, if all three of these conditions are met, the payment from the applicable manufacturer to the CME provider (and thus indirectly to the physician-speaker or faculty member) is excluded from reporting—meaning the transaction achieves the so-called “Sunshine-exempt” CME status. While these conditions appear somewhat straightforward, the CME Coalition, a Washington, D.C.–based advocacy organization for CME providers and supporters, along with other stakeholders, have raised concerns about several areas in need of further clarification. Despite these areas of uncertainty, the CME Coalition formulated a set of guidelines for CME providers and stakeholders to follow to ensure compliance with the final Sunshine Act regulations. The guidelines are based largely upon a legal memorandum commissioned by the Coalition by the national law firm of Alston & Bird LLP.

How CME Providers and Stakeholders Can Comply with Open Payments

Faculty—Foremost, physicians who are currently serving, have recently served, or will serve in the future as a CME speaker or faculty should ensure that the following information is correctly listed on the National Plan and Provider Enumeration System, which CMS is requiring applicable manufacturers to use when reporting payments:
1. full name, including middle initial
2. mailing address
3. primary practice address, as well as any other addresses that might be secondary (e.g., a second practice location)
4. national provider identifier (NPI) number
5. specialty and, if applicable, sub-specialty

In addition, physicians should contact the CME provider about speaking or faculty engagements that take place after August 1, 2013, and may involve commercial support to determine whether their service is reportable.

Even after a CME provider and manufacturer have determined that a CME program is Sunshine-exempt, they still may need to evaluate whether any other payments to a speaker or faculty member serving the program may be reportable. As long as the payment or transfer of value given to a speaker or faculty at a Sunshine-exempt CME program is for the purposes of the program, such as commensurate and reasonable travel, lodging, and meals, there is likely no requirement for the manufacturer to report such payments or for a CME provider to track such payments on behalf of a manufacturer. CMS recently clarified on its FAQ Web site that “lodging, travel, and meals for speakers of an accredited or certified CME event meeting all three requirements in 42 CFR 403.904(g)(1) will be deemed to be included in the total speaker compensation and, therefore, exempt from reporting under Open Payments.”

However, CME providers and manufacturers must be aware of the added complexity of large conferences or annual meetings where multiple accredited or certified programs take place. In other words, while a faculty or speaker’s payments for the program on which they serve are exempt, their attendance or participation in other “non-Sunshine exempt” CME programs may be reportable, which is consistent with the ACCME SCS requirements.

Learners—There are certain issues with reporting meals to physician-attendees at Sunshine-exempt CME programs. CMS recently clarified in its FAQs that “meals … provided in conjunction with the accredited or certified CME event … will need to be reported for physician attendees (who are not speakers) … under the appropriate nature of payment category” of food and beverage. However, CMS clarified that in the context of Sunshine-exempt CME, if meals are provided to physicians “in a group setting where the cost of each individual covered recipient’s meal is not separately identifiable,” such as a buffet or boxed lunch, such meals would be excluded from reporting. This clarification leaves CME providers providing Sunshine-exempt CME programs with two options.

1. CME providers and meeting planners can choose to provide meals that are valued at less than $10 per person. The CME provider or meeting planner may still be required (at the direction of the manufacturer) to record which physicians partook in the meal because of the annual $100 aggregate reporting requirement. Thus, this option may still create burdens for all parties.

2. CME providers can provide meals in a buffet or boxed lunch where meals are made generally available to all participants and partakers are not separately identifiable. In such “group settings,” it is too difficult to identify which physicians partook in the meal, and if they partook, what value to attribute to them. Since the meal is provided in a group setting where it is difficult to identify the physicians that actually partook in the meal, tracking such payments or transfers of value is also not required.

Meals to physician-attendees at Sunshine-exempt CME programs that are separately identifiable (e.g., plated meals) and valued at more than $10 are reportable (those under $10 must be tracked for the $100 aggregate purpose). However, this is problematic because attributing any value to a physician-attendee for a meal at a Sunshine-exempt CME program would create an appearance that the manufacturer paid the physician to attend the program. Such an appearance would violate the ACCME SCS (no direct attendee payments by a commercial supporter for any purpose) and potentially jeopardize not only the integrity of the CME program doctors receive CME credit for, but also the CME provider’s accreditation status.

For activities that include exhibit booths, manufacturers do not have to track items with a value of less than $10, including food, that are given out at those exhibits.

As a reminder to CME providers, ACCME SCS 3.12 prohibits using commercial support to subsidize attendee travel or lodging or any other compensation for physician-attendees. Thus, there should be no other reportable or traceable payments associated with physician-attendees. Nevertheless, if a Sunshine-exempt CME program is held in conjunction with a reportable event—for example, a promotional meeting in compliance with ACCME SCS 4—manufacturers will still have to report payments or transfers of value associated with the separate reportable event as required (e.g., meals, journal reprints, and the like).

Another area of clarification, not as controversial but still important, is the educational value of materials associated with Sunshine-exempt CME programs. The final rule stated that manufacturers are “not responsible for reporting payments made to CME vendors that are used to subsidize attendees’ tuition fees for continuing education events.” Sunshine-exempt CME programs often include in their subsidized tuition slide-decks, portions of journal articles, tables or figures, and other relevant materials necessary for educating and training physicians.

Relying primarily on comments submitted by the CME Coalition, CMS clarified in its FAQs that “educational materials that are included in the tuition fees for an accredited or certified CME program that meets all three exemption conditions, such as handouts, Web downloads, or printed slides, are excluded from reporting under Open Payments provided that the content (1) does not contain any CME sponsor information, (2) the content is related to the CME program, (3) the value is de minimis, and (4) the funds used for the materials came from the same CME program grant.” As a reminder to CME providers, such materials must also be in compliance with ACCME SCS, Standard 4.

Additional Areas of Importance for CME Providers and Stakeholders

One area that has not received much attention is the CME commercial support or grant request process. In the final rule, CMS references an “unrestricted” grant or donation to a physician organization when explaining when indirect payments are reportable. The CME Coalition asked CMS to clarify whether the “unrestricted” example would be applicable to CME providers or physician organizations providing Sunshine-exempt CME programs. While some CME grants are “restricted” because they target a particular disease or class of treatments, CMS focuses on how the payment is being made through a third party to a physician, not to what topic (e.g., diabetes, cancer) the payment is directed.

An accredited or certified CME provider’s grant request is unrestricted in terms of whom the CME provider will choose for speakers, or invite to attend, because the ACCME SCS prohibit applicable manufacturers from choosing, recommending or providing a list of speakers or attendees. In fact, the CME provider’s involvement is “specifically to maintain the anonymity” of the speakers and the sponsor until the CME provider has been awarded commercial support, so it appears that CME providers should be able to continue commercial support grant requests consistent with ACCME SCS. Teaching hospitals that have CME departments, and other CME providers that employ physicians on staff and receive commercial support directly from applicable manufacturers, have several key areas to consider.

While CME providers may employ physicians who are normally subject to the Sunshine Act reporting, physician employees likely are not subject to the reporting requirements of the final rule with respect to their administration of CME programs. Since they are considered faculty, they receive value (salary) directly from their employer-provider and not from the provider’s client-manufacturers. Accredited CME providers and the CMS conditions prohibit an applicable manufacturer from directing the disposition of grant funds used for an accredited CME program. Accordingly, CME providers must ensure that CME grants do not direct or otherwise earmark grant funds for compensation to a CME provider’s physician employee.

In comments submitted to CMS, the CME Coalition noted that there are at least 11 other accrediting or certifying bodies and several international entities that use physicians as speakers or faculty and have either formally adopted the ACCME Standards for Commercial Support or substantially identical standards. In other words, CME stakeholders asked CMS whether it would recognize other accrediting groups that “meet the accreditation or certification requirements and standards” of one of the five entities enumerated by CMS.

However, CMS recently clarified in an FAQ that this initial list of accrediting bodies “is exhaustive.” CMS did maintain that it will “consider modifications … in possible future rulemaking,” leaving open the chance for other certification or accreditation bodies to be recognized for the exemption. Nevertheless, payments provided as compensation to speakers at CME events run by CME providers that are not accredited or certified by one of the enumerated bodies are reportable, likely as “compensation for services other than consulting.” Manufacturers could also report such payments as “honorarium,” “grant,” or “education,” depending on the nature of the arrangement.

Also reportable are payments provided to speakers, faculty, and physician attendees for travel, lodging, and meals at CME programs that are not accredited by one of the five enumerated bodies. Educational value and materials provided to physician-attendees, such as a journal reprint, would also be reportable for those not accredited by the five bodies. CMS recommended in a separate FAQ that “[t]he value of a journal reprint should reflect the cost that an applicable manufacturer … paid to acquire the reprint from the publisher or other distributor.”

Any Questions?

In addition to the guidelines and legal memorandum, the CME Coalition has been active in getting clarification of the final regulations on the issues noted above and several other areas. The recent FAQs posted by CMS have provided needed clarification to CME providers and stakeholders to ensure that physician speakers and faculty, physician-attendees, and manufacturers can live in harmony with the Sunshine Act, without chilling physician-industry participation in the CME enterprise.

Despite this additional clarity, many nuanced questions around Sunshine reporting remain. To address these uncertainties, the www.cmecoalition.org CME Coalition has an area on its Web site dedicated to answering questions around CME and the Sunshine Act.

Ultimately, the goal of the Sunshine Act is to bring transparency to payments between physicians and manufacturers, not to regulate the way manufacturers do business. Given the tremendous impact accredited CME has on improving patient outcomes and ensuring physicians are up-to-date on new clinical and scientific data, it will be incumbent on CMS to ensure that its final regulations do not overly burden CME providers and stakeholders.    


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