CMS Proposes Elimination of CME Exemption From Sunshine Act

Teaching hospitals and physicians who speak at continuing medical education (CME) programs should be interested in a July 11, 2014, announcement by the Centers for Medicare & Medicaid Services (CMS). The announcement proposes the repeal of the provision that currently exempts drug and device manufacturers from reporting payments to physicians who speak at CME events.

The Sunshine Act (also called the Open Payments Act) generally requires manufacturers of drugs, devices, biologicals and medical supplies to report payments to teaching hospitals and physicians. The Act was included as part of the 2010 Affordable Care Act. The theory is that patients should be able to find out if a teaching hospital or physician might be financially beholden to the maker of such products.

But there has always been a specific exemption for payments that go to CME program speakers, provided that the manufacturer did not pay the speaker directly or require the program to use a certain speaker or one chosen from a specific list, and provided also that the program be accredited by one of five specific, main-stream accrediting bodies. 42 CFR § 403.904(g)

Under the July 11, 2014, proposal, this exemption would disappear. But that doesn't necessarily mean that such payments would need to be reported. The explanation? There is a more general exemption — § 403.904(i)(1) — for "indirect" payments when the manufacturer is "unaware of" the recipient's identity and "does not know" the identity by the end of the second quarter of the year following the reporting year.

So presumably a payment that would have been exempt under § 403.904(g) would also be exempt under §403904(i)(1). Arguably, in fact, the latter exemption is broader than the former, because it doesn't require accreditation by one of the five specified bodies. 

A literal reading of the latter provision suggests that the manufacturer would lose its protection once the speakers list was published, because it would then "know" the speaker's identity. But the July 11, 2014, announcement includes explicit assurance that the exemption would still be available, provided the manufacturer had granted the program sponsor "full discretion" in choosing the speakers.