CMS Finalizes Changes to Open Payments Reporting Requirements

By Ashlie Heald, Esq., Athena Compliance Partners, LLC., Lexington, KY

On November 15, 2019, the Centers for Medicare & Medicaid Services (CMS) published the calendar year (CY) 2020 Revisions to Payment Policies under the Physician Fee Schedule and Other Changes to Part B Payment Policies Final Rule (Final Rule).1  The Final Rule revised the CMS regulations implementing the Physician Payments Sunshine Act (Section 1128G of the Social Security Act) requirements effective for data to be collected in CY 2021 and reported in CY 2022.  The Final Rule aligns CMS regulations with and codifies provisions of the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (SUPPORT Act).2  CMS believes that the changes are in line with its efforts to promote and enable transparency in the financial relationships between manufacturers and healthcare providers.

The Physician Payments Sunshine Act (Sunshine Act) established the minimum thresholds for reporting exchanges of value from a pharmaceutical or medical device manufacturer to physicians and teaching hospitals.3  In February 2013, CMS issued regulations implementing the Sunshine Act requirements by creating the Open Payments program (Open Payments).4  CMS created Open Payments to give patients access to information about their healthcare providers’ financial relationship with manufacturers.  Manufacturers must report certain financial data to CMS.  CMS publicizes these disclosures on its online search tool.5  The search tool allows patients to obtain information that could affect their decisions about healthcare and, more specifically, particular drugs, devices or providers. 

The Final Rule implements changes to Open Payments, including revisions to the definition of a covered recipient, expanded payment categories, and standardization of data on covered drugs, devices, biologicals or medical supplies.  Despite some concern from commenters, CMS believes that the changes align its regulations with the SUPPORT Act requirements, further its efforts to increase transparency, and do not impose an unreasonable burden on reporting manufacturers.  Therefore, the Final Rule implements the changes from the CY 2020 Revisions to Payment Policies under the Physician Fee Schedule and Other Changes to Part B Payment Policies (Proposed Rule) as written.6

Expanding the Definition of “Covered Recipients”

Open Payments requires covered drug, device, biologics, and medical supplies manufacturers to report annually any payments or other transfers of value to “covered recipients.”7  Section 6111 (“Fighting the Opioid Epidemic with Sunshine”) of the SUPPORT Act amended the definition of covered recipient in Section 1128G.8  The amendment requires manufacturers to report payments or other transfers of value to certain additional providers as they do for physicians and teaching hospitals, effective for information required to be reported on or after January 1, 2022.

The Final Rule codifies the expansion of the “covered recipients” definition to include physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, and certified nurse midwives as covered recipients.  Consistent with the SUPPORT Act, CMS regulations would continue to recognize the exception for those providers employed by the manufacturer.  Manufacturers are not required to report payments to employees; therefore, physicians, physician assistants, nurse practitioners, clinical nurse specialists, certified registered anesthetists, and certified nurse midwives employed by the reporting manufacturer are excepted from the reporting requirement.9    In response to commenters’ concerns about consistency across jurisdictions, CMS points to the definitions of service providers within Section 1861 of the Social Security Act. The SUPPORT Act directly references the definitions, and CMS added the definitions verbatim from the statute.  In response to other comments, CMS confirmed that updated submission templates should be available for CY 2021 data collection but declined to extend Open Payments deadlines.  The effective dates provided in the Final Rule are based on provisions of the SUPPORT Act, and CMS stated it lacks the authority to delay the reporting requirement.      

Changes to “Nature of Payments” Categories

The Final Rule also revises the nature of payment categories for which manufacturers must report payments or other transfers of value to a covered recipient.  Manufacturers are required to describe the type of payment made to a covered recipient using one of the nature of payment categories specified in Open Payments and mirrored in current CMS regulations (§ 403.904(e)(2)).  Under current CMS regulations, reportable payments or other transfers of value include, but are not limited to, consulting or speaker fees, honoraria, research, gifts, entertainment, travel expenses, royalties, grants, and ownership or investment interests.  Additions to the nature of payments categories are intended to increase transparency and understanding of the types of payments or transfers of value from applicable manufacturers to covered recipients.  The Final Rule adds debt forgiveness, long-term medical supply or device loans, and acquisitions to the reportable nature of payment categories.

  • Debt Forgiveness applies to transfers of value “related to” debt forgiveness of a covered recipient, a physician owner or immediate family member of a physician with an ownership or investment interest in the manufacturer.
  • Long-term medical supply or device loan applies to loans of covered devices or medical supplies with a loan period longer than 90 days.  The Final Rule adds a definition for “long-term medical supply or device loan,” specifying a term of 91 days or longer.  CMS regulations exclude reporting for short term loans of 90 days or less. 
  • Acquisitions would apply to buyout payments to a covered recipient with an ownership interest in the acquired company.

The new categories operate prospectively and do not require retrospective reporting for payments or other transfers of value that would have fallen into those categories prior to CY 2021.  Additionally, the Final Rule consolidates two continuing education program categories, accredited/certified and unaccredited/uncertified continuing education programs, into a single “medical education programs” category.  CMS believes that the distinction between the two program categories is unnecessary and consolidating the categories will streamline reporting without diminishing the value or quality of the data.     

Standardization of Data Reporting on Covered Medical Devices

The third and final change relates to standardizing data on reported covered drugs, devices, biologicals, or medical supplies.  Current CMS regulations require inclusion of the drug name and national drug code when disclosures are made related to specific drugs or biologicals but has no equivalent requirement for medical devices.  The absence of a requirement was due to a lack of federally-recognized medical device identifiers at the time Open Payments began.  The Food and Drug Administration (FDA) has since established and issued regulations for a standard unique device identifier (UDI) system.  The UDI includes a device identifier (DI) component, which is a mandatory fixed portion of the UDI that is required to be on the label of most devices distributed in the United States. The Final Rule establishes the requirement to include the DI in Open Payments reporting by applicable manufacturers, effective for data collected beginning in CY 2021 to be reported in CY 2022.  Disclosure of the DI will allow patients to identify their device(s) and access information about any financial relationships between their provider and the manufacturer.

CMS acknowledged concerns expressed by commenters about potential difficulties in disclosing information for scenarios where multiple DIs are associated with a single transaction or a single device is associated with multiple identifiers.  However, CMS pointed to the importance of providing meaningful data to the public and encouraged stakeholders to continue participating in the process.  CMS committed to providing guidance on reporting and technical support, but also stated its belief that manufacturers have adequate time to prepare for the reporting requirements. 

Conclusion

The changes to Open Payments are intended to align CMS requirements with the requirements of the SUPPORT Act and increase the depth and breadth in the transparency of financial relationships between providers and manufacturers.  The SUPPORT Act was intended to bring increased awareness to the opioid crisis and the role of drug companies in the crisis.  Expansion of “covered recipients” in the SUPPORT Act appears to be an acknowledgment that not only are healthcare providers other than physicians prescribing opioids and other drugs, but also that patient access to information about those providers is paramount.10  Expanding the universe of covered recipients and the nature of payments categories, as well as increasing reporting requirements for medical devices, will provide the general public with more information.  Patients will have access to more information that may affect decision-making with respect to a provider, drug or device.11  CMS acknowledged the increased reporting responsibilities, especially with respect to DI disclosure, but believes the changes are necessary to provide meaningful data to the public and do not impose an unreasonable burden on the manufacturers. 

  1. 84 Fed. Reg. 62568, 62914-62918 (Nov. 15, 2019).
  2. Pub. L. 115-271 § 6111(a)(1)(A).
  3. Pub. L. 111-148 § 6002.
  4. 78 Fed. Reg. 9458, 9458-9460 (Feb. 8, 2013).
  5. https://openpaymentsdata.cms.gov/search/physicians/by-name-and-location.
  6. For more information about the Proposed Rule, see “CMS Proposes Changes to Open Payments Reporting Requirements” by Ashlie Heald, ABA Health eSource, Vol. 16 No. 2  (Oct. 2019).
  7. 42 U.S.C. § 1320a-7h(a).
  8. Section 6111 (“Fighting the Opioid Epidemic with Sunshine”) of the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (SUPPORT Act) (Pub. L. 115-271 § 6111(a)(1)(A)).
  9. 42 U.S.C. § 1320a-7h(e)(6)(B).
  10. Section 6111 carried the short title “Providing Reliable Options for Patients and Educational Resources” before being renamed “Fighting the Opioid Crisis with Sunshine.” (https://www.congress.gov/bill/115th-congress/house-bill/6/titles).
  11. While CMS relies heavily on patient access to information as justification for expanding reporting requirements, it is worth noting that increased transparency may provide other benefits, specifically in government fraud prevention and detection efforts.

About the Author

Ashlie Heald is a Partner and co-founder of Athena Compliance Partners, LLC, a healthcare compliance consulting firm, based in Lexington, KY.  She provides assistance in the development and maintenance of effective compliance programs and guidance on matters relating to healthcare and medical research compliance.  Prior to establishing Athena, Ms. Heald was a Compliance Specialist in the compliance consulting division of a healthcare law firm and managed a medical Institutional Review Board at the University of Kentucky.  She has a JD from the University of Kentucky College of Law and her MBA from Colorado State University.  Ms. Heald is also Certified in Healthcare Compliance by the Health Care Compliance Institute.  She may be reached at aheald@athenacompliance.org.