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October 15, 2019

CMS Proposes Changes to Open Payments Reporting Requirements

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

On August 14, 2019, the Centers for Medicare & Medicaid Services (CMS) published the CY 2020 Revisions to Payment Policies under the Physician Fee Schedule and Other Changes to Part B Payment Policies (Proposed Rule).  The Proposed Rule would, in part, make changes to the CMS regulations implementing the Physician Payments Sunshine Act (Section 1128G of the Social Security Act) requirements effective for data to be collected in calendar year (CY) 2021 and reported in CY 2022.1  The changes would bring CMS regulations in line with changes made to Open Payments requirements by the SUPPORT Act and would broaden the information available to the public.  CMS accepted comments on the proposed changes through September 27, 2019 and will address those comments in the final rule to be released in November 2019.  

The Physician Payments Sunshine Act (Sunshine Act) was a provision of the Patient Protection and Affordable Care Act that was implemented to improve transparency in the relationships between manufacturers and healthcare providers.2  Now more commonly referred to as the Open Payments program (Open Payments), the Sunshine Act made information about the financial relationships between the pharmaceutical and medical device industry and physicians and teaching hospitals available to the public.3  Since disclosures began in 2013, Open Payments has reported over $43 billion in payments and published more than 64 million records.4   

Manufacturers are responsible for reporting specified financial data to CMS, which then makes that information available to the public.  These disclosures, available online through CMS’s Open Payments Search Tool (Search Tool), provide patients with information about relationships or arrangements that could create conflicts of interest for providers.5 The Search Tool allows individuals to search by individual provider, teaching hospital or manufacturer name.  Search Tool results for an individual provider include the types of payments and total amounts received, as well as comparisons to other providers nationally and by specialty.  A search by teaching hospital provides comprehensive information about individual payments received from manufacturers, including the exact dollar amount and the type of payment.  For manufacturers, the Search Tool results include summary information, as well as detailed, provider-specific information. 

The proposed changes to Open Payments include updating the definition of a covered recipient, expanding payment categories, and standardizing data on covered drugs, devices, biologicals or medical supplies.  These changes, while increasing transparency and expanding public access to information about financial relationships between healthcare providers and certain manufacturers, would greatly increase manufacturers’ reporting requirements.  Although providers are not required to report payments, they are responsible for reviewing reported payments and disputing any inaccuracies.  The expansion of reporting requirements would mean an increase in provider responsibility for verifying the accuracy of published information.    

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.”6  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) amended the definition of covered recipient in Section 1128G.7  The SUPPORT Act is part of the growing effort to address the national opioid crisis.  The expansion of the list of covered recipients in the SUPPORT Act is an acknowledgement of the prescriptive authority of non-physician practitioners.  The amendment requires manufacturers to report payments or other transfers of value to those additional providers as they do for physicians and teaching hospitals, effective for information required to be reported on or after January 1, 2022.8  The Sunshine Act defined a payment or transfer of value as “a transfer of anything of value” but established a minimum threshold for reporting.9  The Proposed Rule seeks to codify the addition of physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, and certified nurse midwives as covered recipients, align CMS regulations with the SUPPORT Act and promote government efforts to increase transparency in healthcare financial transactions. 

Changes to “Nature of Payments” Categories

The Proposed Rule also seeks to revise 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.10  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.  CMS has faced criticism in the past that the nature of payment categories are ill-defined, and requested feedback in the CY 2017 Physician Fee Schedule Proposed Rule on the expansion of the nature of payment categories.  In response to feedback obtained in public comments, CMS is proposing to add debt forgiveness, long-term medical supply or device loans, and acquisitions to the reportable nature of payment categories.11

·         Debt Forgiveness would apply not only to payments related to debt forgiveness of the covered recipient, but also to 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 would apply to loans of covered devices or medical supplies with a loan period longer than 90 days under a newly defined “long-term medical supply or device loan.”12  CMS regulations currently state that limited quantities of medical supplies or device loans for 90 days or less are not required to be reported but do not speak to loans beyond that timeframe.  The proposed change would address those medical supply or device loans that exceed 90 days.

·         Acquisitions would apply to buyout payments to a covered recipient with an ownership interest in the acquired company.

If accepted in the Final Rule, these categories would operate prospectively and would not require retrospective reporting for payments or other transfers of value that would have fallen into those categories prior to CY 2021.13

Additionally, the Proposed Rule would consolidate the current continued education program categories, accredited/certified and unaccredited/uncertified continuing education programs, into a single “medical education programs” category.  CMS notes the distinction between the program categories is no longer needed and that combining those program categories would facilitate reporting without compromising the intent of the disclosures.      

Standardization of Data Reporting on Covered Medical Devices

The third proposed change relates to standardizing data on reported covered drugs, devices, biologicals, or medical supplies. When disclosures are made related to specific drugs or biologicals, current CMS regulations require inclusion of the drug name and national drug code.  There is currently no equivalent CMS requirement related to medical devices.  Therefore, CMS is proposing to require reporting using components of the unique device identification system developed and used by the Food and Drug Administration (FDA).  The unique device identifier (UDI) includes a device identifier (DI) component, which is a mandatory fixed portion of the UDI that identifies not only the individual who affixed the label to the device, but also the version or model of the device.  The Proposed Rule seeks to require disclosure of the DI in Open Payments reporting by applicable manufacturers.  A 2018 report from the Department of Health and Human Services’ Office of Inspector General (OIG) identified inconsistencies and insufficiencies in reporting related to devices.14 The OIG noted that a large number of disclosures did not contain sufficient information to identify the product.  As a result, the OIG recommended requiring more device-specific information in reporting to allow patients to easily identify products for which their provider received payments.  Use of the DI would address the OIG’s recommendation, bring medical device reporting in line with covered drug reporting and  result in more useful information for the public. 


By expanding the types of provider for whom manufacturers must disclose financial relationships and the nature of payments categories, as well as implementing new reporting requirements for medical devices, CMS would provide greater access to information to the public.  The increased reporting responsibilities fall to manufacturers and are likely to be met with some resistance, especially with respect to DI disclosure.  Such resistance is unlikely to deter CMS in finalizing the proposed changes, considering the government’s increased focus on improving transparency. 

  1. 84 Fed. Reg. 40482, 40713-40716 (Aug. 14, 2019).
  2. Section 1128G of the Social Security Act (42 U.S.C. § 1320a-7g).
  3. Although there are potential benefits to these financial relationships, particularly with respect to advancements in medical research and medical knowledge, disclosure of payments is important because they may influence a provider’s decision related to patient care. 
  4. The Centers for Medicare & Medicaid Services, The Facts About Open Payments, accessed October 7, 2019,
  5. The Centers for Medicare & Medicaid Services, Open Payments Search Tool, accessed October 7, 2019,
  6. 42 U.S.C. § 1320a-7h(a).
  7. 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 of 2018 (SUPPORT Act) (Pub. L. 115-271 § 6111(a)(1)(A)).
  8. The current Open Payments transparency requirements provide an exception for physicians, physician assistants, nurse practitioners, clinical nurse specialists, certified registered anesthetists, and certified nurse midwives employed by the reporting manufacturer.  When employed by the manufacturer, those provider types are not considered covered recipients, and manufacturers are not required to report payments to employees. Consistent with the SUPPORT Act changes, CMS regulations would continue to recognize the exception for those providers employed by the manufacturer.
  9. When established, the statutory threshold for individual payments was $10 with an annual aggregate of $100.  For CY 2020, individual transfers of value less than $10.97 are not reportable unless the annual total of those payments is $109.69 or more.  Centers for Medicare & Medicaid Services, Data Collection for Applicable Manufacturers or GPOs, accessed October 7, 2019,
  10. Section 403.904(e)(2)
  11. 81 Fed. Reg. 80170, 80429 (Nov. 16, 2016).
  12. The term “covered device” means any device for which payment is available under subchapter XVIII or a state plan under subchapter XIX or XXI (or a waiver of such a plan).  42 U.S.C. § 1320a-7h(e)(4).
  13. Of note, the Association of American Medical Colleges (AAMC), among others, submitted comments to CMS requesting additional information and guidance on the new nature of payments categories.  In its letter to CMS, AAMC notes that the proposed rule lacks detail and fails to provide context for reporting payments in the new categories.  The Association of American Medical Colleges, PFSQPP PR finalComments92019,
  14. U.S. Department of Health and Human Services Office of Inspector General, Open Payments Data: Review of Accuracy, Precision, and Consistency in Reporting, Report (OEI-03-15-00220), August 3, 2018.

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 [email protected].