As the life sciences industry continues to prepare to begin collecting data on payments and transfers of value to physicians and teaching hospitals on August 1, 2013, applicable manufacturers look for clarity and guidance on the scope of information to be reported. The final Sunshine Act regulations and lengthy preamble include numerous revisions to the draft regulation. Here, we focus on a few key special rules for reporting food and beverage in a group setting, payments or transfers of value to accredited continuing education providers, and payments for research.
Allocating Food and Beverage in Group Setting
The final regulations modified how applicable manufacturers are to capture and report food and beverages provided to covered recipients in a group setting. Applicable manufacturers are to report the cost of the group meal by allocating the cost per person, not the cost per covered recipient, to each covered recipient “who partook in the meal,” which is a substantial change from the draft regulations. For example, if an applicable manufacturer brings a platter of sandwiches to a doctor’s office that costs $150 and 5 physicians and 5 office staff members participate in the meal, the applicable manufacturer must report the cost per person ($150/10 = $15) for each of the 5 participating physicians. This is a common sense approach to reporting meals in a group setting.
Exclusion of Speaker Payments for Qualifying CME Programs
In recognition of the unique and important role of industry support for accredited or certified continuing education, CMS excluded payments to speakers participating in qualifying continuing medical education (CME) programs from reporting requirements. For speaker compensation to be excluded from Sunshine Act reporting requirements, all of the following conditions must be met:
- the program meets the accreditation or certification requirements for continuing education of one of five specifically listed organizations (e.g., the Accreditation Council for Continuing Medical Education (ACCME));
- the applicable manufacturer does not select the covered recipient speaker or even provide a distinct list of potential speakers to be considered by the CME provider; and
- the applicable manufacturer does not pay the covered recipient directly.
If all of the above conditions are met, the payment to the covered recipient to serve as a speaker at the qualifying CME program will not be subject to reporting. On the other hand, if the above conditions are not met, such payment must be reported under the either of the appropriate nature of payment categories:
- “Compensation for serving as faculty or as speaker for an accredited or certified continuing education program,” or
- “Compensation for serving as a faculty or as a speaker for a unaccredited non-certified continuing education program.”
Special Rules for Reporting Research
Following the publication of the draft Sunshine Act regulations in December 2011, the lack of clarity surrounding the reporting of research payments caused confusion and concern throughout the life sciences industry. With the release of the final regulations, CMS’ substantial modification of reporting requirements for research-related payments reflected thoughtful revisions aimed at capturing the actual payment stream for research.
In the final regulations, CMS removed the requirement for the applicable manufacturer to indicate whether the payment was direct or indirect, which was a source of much of the confusion in the draft regulations and concern that many payments would be double reported. Instead, the final regulations require that research payments be reported separately from other reportable payments and transfers of value. Further, research payments are to be reported as a single payment including the name of the individual or entity that actually received the payment for the research services and indicating the principal investigator(s) of the applicable research payment. For example, if an applicable manufacturer provides payment to a CRO, and the CRO provides the payment to the academic institution conducting the research that involves Dr. John Smith as the principal investigator, the applicable manufacturer will report the payment as a single payment to the academic institution and include Dr. John Smith as the Principal Investigator in that single reportable interaction. The final regulations require specific information to reported regarding the research payment, such as the name of the research study and the names of the related covered product (and National Drug Code if a drug or a biological), but also provides the option for the applicable manufacturer to provide context for the research payment.
While the regulations set forth the data elements that must be collected and reported for each of the above interactions, we look forward to reviewing the report layout, especially as related to the section for research-related payments.