Last month, the Centers for Medicare and Medicaid Services (CMS) issued three FAQs and a page of website guidance to supplement their recent decision to remove the continuing medical education (CME) exemption from the Physician Payments Sunshine Act. Unfortunately this guidance adds significant confusion by contradicting CMS’s own rationale for their revision to the Final Rule. On January 15, 2015, the Council of Medical Specialty Societies (CMSS) sent CMS a letter both explaining the Agency’s troublesome interpretation and also urging them to “promptly issue revised guidance.”
CMSS wrote to CMS on behalf of 41 medical specialty society members, with collective membership of over 750,000 healthcare professionals. Their letter points out that the language CMS used to justify removing the CME exemption “clearly stated that industry payments to support accredited CME would not be indirect transfers and thus would not be reportable if the applicable manufacturer later learned the identity of the physician speaker within the allotted timeframe.”
The website example question and answers, however, disregard this preamble language in the Final Rule.
As a background, if an applicable manufacturer “provides funding to support a continuing education event but does not require, instruct, direct, or otherwise cause the continuing education event provider to provide the payment or other transfer of value in whole or in part to a covered recipient,” the manufacturers are not responsible for reporting on values that end up going to CME speakers. This is true “regardless if the applicable manufacturer or applicable GPO learns the identity of the covered recipient during the reporting year.” (view CMS’s document here at p. 67660).
Thus, as long as the applicable manufacturer does not identify specific physician speakers, there is no reportable indirect transfer—the payment falls outside the scope of the Sunshine Act.
CMS’s latest sub-regulatory guidance often misses some essential steps in their analysis of this indirect payment issue. For example, CMS’s Website Guidance states that the following scenario will be reportable in 2017:
An applicable manufacturer provides a payment to an accredited continuing education organization for a continuing education event for physicians. The applicable manufacturer does not pay the physician speaker directly, nor does the manufacturer select the speaker or provide the continuing education organization with a distinct, identifiable set of individuals to be considered as speakers for the continuing education. The applicable manufacturer is able to determine who the physician speaker was by the end of the reporting year or by the second quarter of the following reporting year.
This was a confusing and contradictory interpretation, as CMSS states: “This is precisely the type of scenario that CMS said would not be reportable in the Final Rule preamble because it would not meet the requirements for an indirect transfer of value, since the applicable manufacturer would not have required, instructed, directed, or otherwise caused the continuing education provider to provide the payment or transfer of value, in whole or in part, to a specific covered recipient.”
“By disregarding and contradicting the agency’s rationale for removing the CME Exemption, the Website Guidance will greatly expand the number of payments that will be reported,” CMSS continues. “This will inevitably discourage physicians who have no other financial relationship with an applicable manufacturer from speaking at CME events.”
“To avoid confusion, uncertainty, and disputes over reporting requirements, we strongly urge CMS to immediately revise the Website Guidance to conform to the language of the Final Rule preamble” (emphasis added).
CMSS also urges CMS to issue another round of guidance the agency promised in the Final Rule preamble where the agency stated: “We will provide sub-regulatory guidance specifying tuition fees provided to physician attendees that have been generally subsidized at continuing education events by manufacturers are not expected to be reported.”