The Centers for Medicare and Medicaid Services (“CMS”) has finalized its proposal to remove the exemption for continuing education effective for reporting year 2016 from the Sunshine Act regulations. The change appeared in CMS’ annual publication of its Physician Fee Schedule final rule (“PFS Final Rule”), this year displayed on October 31, 2014.
Since the passage of the Sunshine Act final rule in 2013 (78 Fed. Reg. 9458 (Feb. 8, 2013)), the Agency has been criticized by numerous continuing education providers for implementing an overly narrow exemption to reporting for continuing education. The providers complained that CMS was effectively endorsing the five continuing education providers enumerated in the final rule, while arbitrarily requiring manufacturers to report payments to all other continuing education providers. Thus, in July 2014, CMS proposed to remove the exemption and solicited comments from stakeholders.
In the PFS Final Rule, CMS finalized its proposal to remove the exemption, concluding that it was redundant of CMS’ rules on reporting indirect payments under the Sunshine Act. In doing so, CMS rejected the comments of stakeholders who advocated to expand the list of continuing education providers listed in the exemption or articulate accreditation or certification standards for which a provider could qualify.
CMS also explained the application of the Sunshine Act knowledge standard to such payments. Under the existing rules for indirect payments, an applicable manufacturer is deemed to be aware of the identity of a covered recipient who has received an indirect payment if the manufacturer learns the identity of the recipient by the end of the reporting year or the end of the second quarter of the following reporting year. Some commenters objected to the application of this rule to continuing education payments, stating that it would be impractical for a manufacturer to remain unaware of the identity of a physician receiving compensation for speaking at a continuing education event because such information is also published in brochures and other program advertisements or publications.
CMS disagreed with the commenters, citing the greater importance of consistent reporting requirements for all indirect payments. CMS clarified that, as with other indirect payments, manufacturers are required to report otherwise reportable indirect payments if the manufacturer learns of the identities of the physician speakers by year-end or the end of the second quarter of the following reporting year.
Importantly, CMS reiterated that unrestricted payments to continuing education providers (meaning those which have not been directed or earmarked for payments to covered recipients) are not subject to reporting under the Sunshine Act. Thus, the elimination of the exemption may have reduced impact on those manufacturers that abide by ACCME or similar accreditation standards that require that the CME provider maintain independence in the selection of speakers, and do not direct or influence the selection of
Lastly, CMS promised forthcoming guidance applying the indirect payment rules to physician tuition fees which have been subsidized by manufacturers.
The elimination of the continuing education exemption underscores CMS’ openness to modifications to the Sunshine Act regulations in response to industry feedback. Stakeholders who identify other areas of clarification may consider strategies to engage CMS or Congress on the need for amendments on other aspects of reporting (e.g., tracking and reporting de minimis payments).