THE SUNSHINE ACT AND CME

In 2009 the Sunshine Act, also known as the National Physician Payment Transparency Program or Open Payments Program, was signed into law as part of the Affordable Care Act (Obamacare).  Its primary purpose is to make more transparent the relationships between physicians (also dentists, podiatrists, optometrists, chiropractors) and pharmaceutical companies and medical device manufacturers by requiring these commercial interests to report payments and other “transfers of value” made to “covered recipients”, i.e., physicians and teaching hospitals, into a federal database operated by the Centers for Medicare and Medicaid Services (CMS).

The Sunshine Act does have consequences for CME providers and their activities since reportable payments, or transfers of value, include travel, honoraria, and meals. – items which are prominent in CME activity budgets.  Since many CME budgets are underwritten by educational grants from commercial interests, these interests may require as a condition of their approval that activity coordinators provide lists of physician participants receiving payments or transfers of value.

CMS recently clarified this reporting requirement to indicate that it only applies to “direct or indirect payments to covered recipients”.  Since CME guidelines prohibit direct payments to physicians by commercial interests, the concern for CME is what constitutes an indirect payment.  CMS states that if a manufacturer “requires, instructs, directs, or otherwise causes” a CME provider to make a payment or payments to a known covered recipient, this would constitute a reportable indirect payment.  However, as long as the covered recipient is unknown to the commercial interest – and this should always be the case for Category 1 certified CME activities – there is no requirement for reporting to the federal database.

Lastly, for some participants at CME activities the Sunshine Act requirement for reporting transfers of value, say for meals, may unfairly distort their relationship with the grantor.  Therefore, before providing any information on physician participants, it is recommended that activity coordinators contact the CME office or their compliance or legal officer for advice.

 

CLARIFYING THE EXCLUSION OF THE CME EXEMPTION IN THE SUNSHINE ACT

Last April the Centers for Medicare and Medicaid Services (CMS) issued their final guidelines for implementing the Sunshine Act.  In the initial version of the CMS guidance CME was exempted from the Sunshine Act reporting requirements.  However, in the final guidelines the specific CME exemption was removed, ostensibly subjecting CME activities underwritten by commercial interests to the reporting requirements for direct or indirect payments or transfers of value to physicians for travel, honoraria, or meals, etc.  Critics of the CME exemption argued that CMS appeared to be validating commercial sponsorship of CME activities, and the new guidance perhaps may be seen as eliminating the appearance of endorsing corporate support of CME.

Nevertheless, despite exclusion of specific language exempting commercial support of CME activities in the final guidelines, CME activities still have options that may avoid providing physician lists to corporate sponsors.  Most prominent of these options is CMS’ clarification of indirect payments.  The Accreditation Council for Continuing Medical Education (ACCME) requires that all commercial grants be made to the CME Provider or the CME Provider’s Institution which, under the CMS guidelines, constitutes an indirect payment or subsidy.   However, with CMS’s clarification, commercial grants will not be considered indirect payments as long as the grants meet established criteria, including that CME Providers, not the commercial interests, have control over the content of their CME activities and commercial interests do not “require, instruct, direct, or otherwise cause” the CME Providers to direct the payment to a specific physician(s).

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