As part of the final 2015 Medicare physician fee schedule rule, CMS is adopting – with certain refinements – its proposed changes to the regulations implementing the Physician Payment Sunshine Act. By way of background, the Sunshine Act requires pharmaceutical and medical device manufacturers and group purchasing organizations to submit to CMS certain information on payments and transfers of value to physicians and teaching hospitals, as well as physician ownership information. This data is being made publicly available on the CMS “Open Payments” website, http://go.cms.gov/openpayments.

Specifically, In the final rule, published on November 13, 2014, CMS adopted the following provisions pertaining to the Sunshine Act regulations:

  • CMS deleted the reporting exclusion for payments made to speakers at accredited continuing medical education events. Importantly, CMS points out that such payments may still be excluded from reporting, since “payments or other transfers of value, including payments made to physician covered recipients for purposes of attending or speaking at continuing education events, which do not meet the definition of an indirect payment, as defined at §403.902, are not reportable.” Under §403.902, indirect payments refer to payments or other transfers of value made by an applicable manufacturer to a covered recipient through a third party, where the applicable manufacturer requires, instructs, directs, or otherwise causes the third party to provide the payment or transfer of value, in whole or in part, to a covered recipient(s).
  • The Final Rule requires the reporting of the marketed name and therapeutic area or product category of the related covered drug, device, biological, or medical supply, unless the payment or other transfer of value is notrelated to a particular covered or non-covered drug, device, biological or medical supply. Previously, for devices or medical supplies manufacturers had the option of reporting the therapeutic area or product category instead of the marketed name. In the Final Rule, CMS also removed language allowing manufacturers the option to report “up to five” related covered products. It is not clear from the Final Rule whether such an option will still be available in practice, or if manufacturers will only be able to report a single, related covered product. Reporting marketed names for non-covered drugs, devices, biologicals, or medical supplies will continue to be optional. CMS also acknowledges that a payment or other transfer of value associated with a research payment regarding a device or medical supply may not have a marketed name. Therefore, CMS is specifying that manufacturers will continue to have an option to report either a device or medical supply marketed name, therapeutic area or product category when reporting research payments.
  • CMS is requiring applicable manufacturers to report stocks, stock options, or any other ownership interest as distinct categories.
  • CMS is deleting the definition of “covered device” as duplicative of the definition of “covered drug, device, biological or medical supply.”

CMS is implementing data collection requirements for these provisions beginning January 1, 2016, for reporting to CMS in 2017.