The Sunshine Act

The relationship between physicians and medical industry has been the subject of research and scrutiny, with more than 80% of physicians reporting that they have received gifts of some type from the medical industry. 60% of these physicians were involved in medical education. Over one third of all CME offerings are funded by industry. The outcome of this scrutiny was federal legislation sponsored by Senators Charles Grassley and Herb Kohl and incorporated into the Patient Protection and Affordable Care Act as The Physician Payments Sunshine Act.  This was enacted in 2010, but it took until February 2013 for the Final Rule to be published delineating the implementation of this law.  The objective of this legislation was to increase public disclosure of industry-physician financial relationships in hopes of limiting the conflicts of interest without negatively impacting the constructive collaborations.

The direct impact of the Sunshine Act on physicians is variable; however, the indirect impact is already being felt.

Drug and device manufacturers who manufacture at least one product covered by Medicare, Medicaid, or CHIP and Group purchasing organizations (GPO) and physician-owned distributors must report transfers of value to any licensed physician or teaching hospital. Transfers of value include gifts, honoraria, consulting fees, research  funding, speaking fees, royalties or license, charitable contributions, current or prospective ownership or investment, grants,   meals, entertainment, and travel . Manufacturers and certain GPO’s must report ownership and investment interests held by physicians or the immediate family of physicians. This is an administrative burden that is poorly understood by most physicians. It will be their responsibility to track any transfer made on their behalf so as to verify the information released to the public.

The Sunshine Act also limits the direct and indirect corporate financial support of CME, even if the CME is unbiased and meets the criteria for reporting exemption. (See box on CME)

Payments of less than $10 do not need to be reported unless they exceed $100 in aggregate for a calendar year. Product samples, educational materials that directly benefit patients or are intended to be used by or with the patients, trail loan of covered devices, discounts or rebates, in-kind items for charitable purposes, warranty services, and dividends from publicly traded mutual funds are also exempt from reporting.

The data collection (industry reporting) began August 1, 2013. On March 31, 2014 the data collected from August – December 2013 will be submitted to CMS. From April – September the CMS will aggregate the data and make available to affected parties to review and correct if needed. On September 30, 2014 the CMS will release the data publicly. Going forward, it is important that each physician be aware of what is reportable and what is actually reported. This information will be made public on an annual basis.

 

Summary of The Sunshine Act as it pertains to CME (prepared by Hart Health Strategies for ASPS)

Speaking at CME Events

CMS finalized that applicable manufacturers will not be required to report payments to speakers at accredited CME events so long as the applicable manufacturers do not select the speakers or pay them directly. Specifically, the CMS states the following

“We have finalized at §403.904(g)(1) that an indirect payment made to a speaker at a continuing education program is not an indirect payment or other transfer of value for the purposes of this rule and, therefore, does not need to be reported, when all of the following conditions are met: (1) the program meets the accreditation or certification requirements and standards of the ACCME, AOA, AMA, AAFP or ADA CERP; (2) the applicable manufacturer does not select the covered recipient speaker nor does it provide the third party vendor with a distinct, identifiable set of individuals to be considered as speakers for the accredited or certified continuing education program; and (3) the applicable manufacturer does not directly pay the covered recipient speaker. We believe that when applicable manufacturers suggest speakers, they are directing or targeting their funding to the speakers, so these payments will be considered indirect payments for purposes of this rule. Conversely, when they do not suggest speakers, they are allowing the continuing education provider full discretion over the CME programming, so the payment or other transfer of value will not be considered an indirect payment for purposes of these reporting requirements. We believe that this approach will greatly reduce the number of payments to speakers at accredited or certified continuing education programs that must be reported.”

CMS did not believe that all payments to physicians for serving as speakers at an accredited or certified continuing education program should be granted a blanket exclusion. Therefore, all accredited or certified continuing education payments that are not excluded by the conditions described above must be reported.

In the case of unaccredited and non-certified CME, the final rule states that, if the payment or other transfer of value is made indirectly, it will be subject to the same reporting requirements for all indirect payments. This is because unaccredited and non-certified CME programs do not require the same safeguards as an accredited and certified program.

Regardless of whether the CME event is accredited or unaccredited, direct payments or transfers of value must be reported

Meals and Snacks at CME Events

As discussed in the final rule, for meals in a group setting (other than buffet meals provided at conferences or other similar large-scale settings), CMS will require applicable manufacturers to report the per person cost (not the per covered recipient cost) of the food or beverage for each covered recipient who actually partakes in the meals (that is, actually ate or drank a portion of the offerings). If the per person cost exceeds the minimum threshold amount of $10, then the applicable manufacturer must report the food or beverage as a payment or other transfer of value for each covered recipient who actually participated in the group meal by eating or drinking a food or beverage item.

CMS finalized that food and beverage provided at conferences in settings where it would be difficult to establish the identities of people partaking in the food do not need to be reported. Examples of this might be coffee and other beverages served in the “exhibit hall” to all attendees of a medical society annual conference. However, CMS does not intend this to apply to meals provided to select individual attendees at a conference where the sponsoring applicable manufacturer can establish identity of the attendees. Examples of this might be an industry-sponsored dinner where individual physician are invited to participate in the event and the applicable manufacturer is able to establish the identities of people partaking in the meal.

Physicians who do not want to receive meals should make clear to manufacturers that they do not accept them. In other words, CMS “will no longer attribute meals to physicians who do not attend the meal, so a physician who does not want to receive meals should not attend or accept them.”

Small Incidental Items Collected at CME Events

According to the final rule, small payments or other transfers of value (less than $10) do not need to be reported, except when the total annual value of payments or other transfers of value provided to a covered recipient exceeds $100. This applies to conferences and similar events, as well as events open to the public. For example, small incidental items (such as pens and note pads) that are provided at large-scale conferences and similar large-scale events will be exempted from the reporting requirements, including the need to track them for aggregation purposes. However, if an applicable manufacturer hands out an item above the $10 threshold, they should be able to track who received the payment since it is a more significant transfer. Prepared by Hart Health Strategies, www.hhs.com,