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PPSA Update: Transfers of Value and Reporting Requirements

September 22, 2016

CMS has provided clarity on the final ruling for transfers of value reporting requirements at accredited CME activities in the Physician Payment Sunshine Act, which has been a consistent source of confusion for CME stakeholders ever since it went into effect in August 2013. CMS informed the CME Coalition of a revised FAQ (#8165) posted yesterday on their website. The FAQ clarifies the reporting requirements for most transfers of value at accredited CME activities. The full text states that:
If an applicable manufacturer or group purchasing organization (GPO) provides a payment or transfer of value to a continuing education provider to support a continuing education program, but did not require, instruct, direct or otherwise cause (including, but not limited to, “encouraging” or “suggesting”) the continuing education provider to provide payments or transfers of value to a specific or particular physician speaker or faculty, would the contribution be considered a reportable payment?
No. A payment or transfer of value as described above would not be subject to reporting under Open Payments for any covered recipient physician speakers or faculty. As explained in the Calendar Year 2015 Physician Fee Schedule Final Rule, when an applicable manufacturer or GPO provides funding to a continuing education provider, but does not: (1) select or pay the covered recipient speaker directly, or (2) provide the continuing education provider with a distinct, identifiable set of covered recipients to be considered as speakers for the continuing education program, CMS will consider those payments to be excluded from reporting under § 403.904(i)(1) [revised as § 403.904(h)(i)]. This approach is consistent with our discussion in the preamble to the final rule, where we explained that if an applicable manufacturer conveys ”full discretion” to the continuing education provider, those payments are outside the scope of the rule (79 Fed. Reg. 67759). We continued by saying “[t]his is the case even if the applicable manufacturer or applicable GPO learns the identity of the covered recipient during the reporting year or by the end of the second quarter of the following reporting year.” (79 Fed. Reg. 67760).
This is a huge win for accredited CME providers and pharmaceutical manufacturers, as it removes transfer of value reporting requirements at accredited CME activities. The newly posted FAQ aligns with guidance and interpretation released by the CME Coalition in 2014, and provides even more clarity to all CME stakeholders. Some pharmaceutical and device companies had begun collecting transfer of value data for physicians, regardless of whether or not it was actually reportable, due to the lack of clarity in the ruling from CMS.

The updated FAQ from CMS should alleviate the reporting burden for the majority of accredited CME events. While some pharmaceutical companies many continue to collect transfer of value data over the next few months as the update from CMS is interpreted fully, we can expect most will remove transfer of value reporting requirements for accredited CME activities in the months ahead. The CME Coalition will be releasing an update to clarify the FAQ ruling above and provide additional guidance for CME stakeholders. In the meantime if you have any questions regarding the PPSA and this newly posted FAQ on transfers of value, please contact us here.