The Centers for Medicare and Medicaid Services released the long-awaited final rule on the Sunshine Act provisions of the Affordable Care Act on February 1. Pharmaceutical meeting managers and continuing medical education providers are reacting with a mixture of cautious optimism, relief, and resignation.
The transparency bill, passed as the “National Physician Payment Transparency Program: Open Payments,” details how pharmaceutical and medical device manufacturers covered by Medicare, Medicaid, or the Children’s Health Insurance Program will be required to collect data annually on “all payments or transfers of value” of more than $10 to physicians and teaching hospitals. Group purchasing organizations also must follow the final rule’s requirements.
Under the final rule, companies and GPOs will be required to begin collecting this data on August 1, 2013. The 2013 data collected from August through December 2013 is due to CMS by March 31, 2014; it will be posted publicly on the CMS Web site by September 30, 2014. Docs and teaching hospitals will be allowed 45 days to review and correct the data before it is made public, according to CMS. Those who fail to report can look forward to civil penalties of up to $150,000 per year. Violators found to have a “knowing failure to report” could be fined up to $1 million, and CMS and the Office of the Inspector General of the Health and Human Services “reserve the right to audit, evaluate, or inspect applicable manufacturers and applicable GPOs for their compliance with the reporting requirements.”
The Pharmaceutical Research and Manufacturers of America, or PhRMA, said in a statement that it “remains committed to the principles of the Sunshine Act and continues to believe that careful implementation is essential to ensuring that Sunshine fulfills its objective of usable, transparent, and understandable sharing of information.” The Medical Imaging & Technology Alliance issued a statement saying, “We appreciate that CMS has given device manufacturers 180 days after publication to implement the final regulations, so that our members have sufficient time to successfully implement the law.”
But many pharmaceutical and medical device meeting managers may not need the extra time—several of the larger pharma companies have been required to collect the data under corporate integrity agreements for some time. Many others, expecting that this was coming, had been preparing to meet the original January 1, 2012, deadline, which then was pushed back to January 2013, and now to August. In a December 2011 survey of participants at the West Coast Pharmaceutical Meeting Management Forum, co-organized by and the Center for Business Intelligence, 88 percent said they had a system in place to track their spend on physicians and other healthcare professionals. Seventy-six percent said they were either already testing their system or that their system was ready to roll as of a year ago.
CME Providers Breath Sigh of Relief—for Now
Those on the continuing medical education side, however, had been in limbo, waiting to see if they would have to slice and dice the unrestricted grants they receive from industry for the CME activities to account for what is spent on chilling effect on speakers and on participants, who may not want to have their honoraria or the cost of their lunch publicly posted.and participants at their events. The concern was that this process would be onerous and expensive for providers, and that it could have a
At an early morning session on February 2 at the Alliance for Continuing Education in the Health Professions’ annual conference in San Francisco, Thomas Sullivan, president of the medical education company Rockpointe Corp. and author of the Policy and Medicine blog, gave a preliminary overview of the final rule. It includes a new section, 42 CFR §403.904(g), which outlines the conditions under which CME is exempt from reporting:
• The activity must meet the accreditation or certification requirements and standards for continuing education of the Accreditation Council for CME, 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 pharma or device company does not pay the speaker directly.
• The pharma or device company does not choose the speaker, or give the CME provider a group of speakers to consider for the activity.
The upshot: The final rule, according to CMS, “will greatly reduce the number of payments to speakers of accredited or certified CME that must be reported,” something that was applauded by those attending the Sunshine update session at ACEHP.
After a preliminary analysis, it appears that non-accredited and non-certified CME providers will still have to disclose and report honoraria, meal and travel costs, and other activity-related data to their grantors, which in turn will disclose and report those to CMS along with physician-related financial relationships involved in their promotional meetings, advisory boards, clinical research, and other interactions with healthcare professionals. Activities relating to risk evaluation and mitigation strategies, or REMS, also likely will be reportable if they are not accredited, said Sullivan.
However, the rule does exempt buffet meals, snacks, soft drinks, coffee, or other refreshments available to everyone at an activity, though individually plated meals would have to be reported. Companies also are not required to track and report giveaways valued at less than $10 at large conferences, since “it will be extremely difficult for applicable manufacturers to identify physician-covered recipients,” according to the final rule.
The rule gets very specific about some other allowable exclusions, which generally are things that directly benefit patients or are designed to be used by patients. So the costs of medical textbooks and journal reprints provided to docs for their own edification do have to be reported, while posters, anatomical models, and flash drives designed for docs to use with patients do not have to be reported. “Basically, they took educational materials off the table,” said Sullivan. “As long as it benefits patients in some way, it should be excluded.”
Responses to the Final Rule
In a note to members, ACEHP President Jack Kues, PhD, and Damon Marquis, MA, MS, FACEHP, president of the organization’s newly formed advocacy group, the Coalition for CEHP, hailed the final rule for exempting CE program speakers under certain conditions. “This is indeed great news for accredited and certified CME … We in the CE community have drawn a collective sigh of relief—but as we all know, the devil is in the details.”
Chris Lamond, executive director of the Washington, D.C., advocacy group the CME Coalition (which is not affiliated with the ACEHP coalition and has been lobbying for the exemption of accredited CME), said via phone at the ACEHP session, “We believe the original intent of the rule was not to include CME, but it could have been interpreted that way. These exemptions have been added for a reason.”
In a statement released February 1, Sen. Chuck Grassley (R-Iowa), who coauthored the Sunshine Act with former Sen. Herb Kohl (D-Wis.), said the final rule “brings about accountability, and accountability will strengthen the credibility of medical research, the marketing of ideas and, ultimately, the practice of medicine. I will stay vigilant about how this law is implemented, especially after the delays seen already.”
Others are not quite as pleased with the final rule exemptions. Larry Huston, a medical journalist, wasted no time in posting his criticism on the pharma and healthcare section of Forbes.com. The exemptions, he said, only make sense if you believe that accredited CME providers are, in fact, independent. “Remember the wisdom of Deep Throat: Follow the money. Until there is a complete separation of money from CME, CME will continue to be another way for industry to market its products.”
CME, physician, and pharmaceutical industry organizations say they will continue to parse the final rule to iron out any further details. Jeremy Lazarus, president of the American Medical Association, in a statement said the AMA will “carefully review” the rule, adding, “As the rule is implemented, we will work to make sure physicians have up-to-date information about the new reporting process.”