Law and Policy

Law and Policy 

Open Payments is Section 6002 of the Patient Protection and Affordable Care Act (Public Law No. 111-148), as amended by the Health Care and Education Reconciliation Act of 2010 (Public Law No. 111-152).

On July 15, 2016, CMS issued the proposed 2017 Physician Fee Schedule.  A solicitation for Open Payments program stakeholder feedback was included. Please see page 81 FR 46395 of the proposed rule.   

CMS Implements Final Rule Changes for Open Payments

Based on public comments and other changes from the Centers for Medicare & Medicaid Services, the following revisions were published as a final rule in the Federal Register on October 31, 2014, as part of the 2015 Medicare Physician Fee Schedule publication.

In addition to the below information, here are some ways you can learn more about the final rule changes:
• Review the official CMS fact sheet for the Medicare Physician Fee Schedule.
• Review the sections of the Final Rule that pertain to Open Payments.
• Read the full final rule.

1. Deleted definition of “covered device.”
   • Overview: This is a merely technical change, as the definition of covered drug, device, biological, or medical supply is already included in the Open Payments rule.
   • Impact: None
   • Effective Date: Implemented for the 2016 program year, with reporting to CMS in 2017.
2. Deleted the exemption from reporting previously allowed for compensation provided to physician speakers at accredited or certified continuing education events.
   • Overview: Eliminating this exemption from reporting for payments to speakers at certain accredited or certified continuing medical education events creates a consistent reporting requirement, and will also give clarity to consumers who will ultimately have access to the reported data. 
     
     The Open Payments final rule previously included a reporting exclusion for indirect payments made to the physicians speaking at continuing education programs that were sponsored by certain accredited organization (several specifically listed organizations at §403.904(g)(1)(i) sponsoring continuing education events).  CMS received feedback from numerous stakeholders that the listing of accepted accredited organizations named in the final rule was incomplete and the listing should either be expanded or the exclusion removed.  As noted above, this exemption was removed.
   • Impact: Starting in 2016, when an applicable manufacturer provides an indirect payment or other transfer of value to a continuing education organization for a continuing education event to physicians, and knows or finds out the identity of the physician attendees/speakers within the reporting year or by the end of the second quarter of the following reporting year, that payment must be reported to CMS in 2017.
     
     An indirect payment is defined at 42 C.F.R. §403.902 as a payment or other transfer of value made by an applicable manufacturer to a covered recipient through a third party, where the applicable manufacturer requires, instructs, directs, or otherwise causes the third party to provide the payment or transfer of value, in whole or in part, to a covered recipient.
     
     Of course, a direct payment (a payment or transfer of value made by an applicable manufacturer directly to a physician or teaching hospital) has always been included in Open Payments reporting requirements.
     The reporting entity must determine if the payment meets the definition of an indirect payment at 42 C.F.R. §403.902.  If it does meet the definition, then the payment must be reported, if the applicable manufacturer knows or has the ability to determine the identity of the covered recipient during the reporting year or by the end of the second quarter of the following reporting year.
   • Effective Date: Implemented for the 2016 program year, with reporting to CMS in 2017.
3. Required reporting of the marketed name and therapeutic area or product category of the related covered drugs, devices, biologicals, or medical supplies, unless the payment or other transfer of value is not related to a particular covered or non-covered drug, device, biological or medical supply.
   • Overview: Aligning the requirements to report marketed name, not only for drugs and biologicals but also for all devices and medical supplies, facilitates consistent reporting for the consumers and researchers using the Open Payments data.
   • Impact: Aligning the requirements to report marketed name, not only for drugs and biologicals but also for all devices and medical supplies, facilitates consistent reporting for the consumers and researchers using the Open Payments data.
   • Effective Date: Implemented for the 2016 program year, with reporting to CMS in 2017.
     Review the summary chart and process flow to learn more about reporting product information in 2017.
4. Required reporting of stocks, stock options, or any other ownership interest as distinct categories.
   • Overview: Reporting these forms of payment as distinct categories enables Open Payments to collect more specific data regarding the forms of payment made by applicable manufacturers.
   • Impact:Applicable manufacturers and GPO will now be required to report the following distinct forms of payment as distinct categories: stock, stock options, or any other ownership interests.
   • Effective Date: Implemented for the 2016 program year, with reporting to CMS in 2017.