On July 29, 2019, the Centers for Medicare and Medicaid Services (CMS)
released the Medicare CY 2020 Physician Fee Schedule
(the Proposed Rule), including proposed changes to regulations implementing
the Physician Payments Sunshine Act (also called the Open Payments Law),
which was enacted as part of the Affordable Care Act.
If finalized as drafted, the Proposed Rule will: (i) expand the categories
of professionals who qualify as covered recipients under the Open Payments
Law; (ii) consolidate reporting for continuing medical education (CME)
payments into one category; (iii) create specific categories for reporting
of debt forgiveness, long-term product evaluations/loans and
acquisition-related payments; and (iv) require medical device manufacturers
to include, if applicable, the “device identifier” portion of the “unique
device identifier” in each disclosure for devices relating to payments or
transfers of value.
The Proposed Rule also clarifies that National Drug Codes (NDC) must be
reported for drugs and biologics relating to payments or transfers of
value, regardless of whether such payments or transfers are made in the
context of research.
1. Expanding the Definition of “Covered Recipient” to Align With the
Section 6111 of the Substance Use-Disorder Prevention that Promotes Opioid
Recovery and Treatment for Patients and Communities Act (the SUPPORT Act)
expanded the definition of a “covered recipient” under the Open Payments
Law to include a number of non-physician healthcare professionals for the
purposes of reporting payments or other transfers of value required to be
submitted on or after Jan. 1, 2022 (i.e., for payments and transfers of
value made on or after Jan. 1, 2021). See Pub. L. No. 115-271, §
6111(a)(1), (b); 42 U.S.C. § 1320a–7h(e)(6).
Under the Proposed Rule, manufacturers and group purchasing organizations
must track and report payments or transfers of value to physician
assistants, nurse practitioners, clinical nurse specialists, certified
registered nurse anesthetists and certified nurse midwives in addition to
payments or transfers of value to covered physicians and teaching
2. Combining Existing Continuing Medical Education Reporting Categories
The Open Payments Law requires each report disclosing a payment or transfer
of value to categorize the nature of the payment or transfer of value. See
42 U.S.C. § 1320a-7h(a)(1)(A)(vi); 42 C.F.R. § 403.904(e). In the Proposed
Rule, CMS consolidated the two reporting categories for
“accredited/certified continuing education programs” and
“unaccredited/non-certified continuing education programs” into a single
3. Adopting New Payment Reporting Categories
In the Proposed Rule, CMS adopted the following new reporting categories:
This new category would cover transfers of value related to forgiving a
debt owed by a covered recipient, a physician owner of such a recipient or
the immediate family of such a physician. CMS already requires disclosing
entities to disclose debt forgiveness, but did not previously establish a
specific category for debt forgiveness. See CMS Open Payments
Frequently Asked Questions, FAQ #8962.
Long-Term Medical Supply or Device Loan.
This new category would cover the loan of a covered device or the provision
of a limited quantity of medical supplies for longer than 90 days. Under
the Open Payments Law, applicable manufacturers are not required to report
the loan of a covered device for a short-term trial period, not to exceed
90 days, or the provision of a limited quantity of medical supplies, not to
exceed 90 days of average daily use, to permit evaluation of the device or
supply by the covered recipient. See 42 U.S.C. § 1320a-7h(e)(10)(B)(iv); 42
C.F.R. § 403.904(h)(5).
This new category would cover payments to a covered recipient in exchange
for an ownership interest in a company owned by the covered recipient.
4. Required Reporting of Device Identifiers and Clarification on
Reporting National Drug Codes
If a payment or transfer of value relates to a medical device, the Proposed
Rule requires the related report to include the device identifier portion
of the device’s unique device identifier, if any.
The implementing regulations to the Open Payments Law currently require
reporting entities, when reporting research-related payments, to report the
NDC for drugs or biologics relating to the payment or transfer of value.
See 42 C.F.R. § 403.904(f)(1)(iv). The Proposed Rule clarifies that NDCs
are required for all payments or transfers of value that relate to drugs
and biologics, not just research-related payments, as the CY 2015 Physician
Fee Schedule Final Rule erroneously deleted this requirement.
If CMS finalizes the Proposed Rule as written, it will be effective for
transfers made on or after Jan. 1, 2021. The Proposed Rule also clarifies
that the obligation to include NDCs for both research- and
non-research-related payments and transfers of value will take effect 60
days after publication of the final rule.
Comments on the Proposed Rule must be received by 5 p.m. (ET) on Sept. 27,