Alerts and Updates

CMS Issues Proposed Regulations to Expand Open Payments System Reporting

August 26, 2019

Under the proposed regulations, CMS is expanding the covered recipient definition to include those categories of individuals as identified in the SUPPORT for Patients and Communities Act.

In the Federal Register posted on August 14, 2019, the Centers for Medicare and Medicaid Services (CMS) published proposed regulations that, if finalized, would expand the Open Payments reporting requirements initially introduced under the Physician Payments Sunshine Act.[1] The Open Payments program sheds light on some of the payments (and other transfers of value) made from certain drug, device, biologicals and medical supply manufacturers to covered recipient physicians and teaching hospitals. Under the Physician Payments Sunshine Act, the applicable manufacturers must report certain payments made to the covered recipients through the Open Payments program on an annual basis.[2] Such disclosures are available to the public. The categories of payments or transfers of value that must be disclosed include: research, honoraria, gifts, grants, travel expenses, and marketing, education or research for a specific covered drug or device.

As one of the measures to fight the opioid crisis, the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (SUPPORT for Patients and Communities Act) expanded the definition of covered recipient to include physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists and certified nurse midwives.[3] The additional reporting requirements are set to begin with Open Payment submissions made on or after January 1, 2022. The purpose of the recently proposed CMS regulations is to align the regulations with the revisions to the statute and to make other modifications to the Open Payments program.

Under the proposed regulations, CMS is expanding the covered recipient definition to include those categories of individuals as identified in the SUPPORT for Patients and Communities Act, expanding the payment categories and standardizing data on covered drugs and devices. If finalized, these changes will be effective for data collected beginning January 1, 2021, and reported on or after January 1, 2022. Additionally, CMS is proposing a correction to the national drug codes (NDCs) reporting requirements that would be effective 60 days following publication, if finalized.

As for the change regarding the definition of covered recipient, the CMS proposed rule mimics the additional provider categories as required by the SUPPORT for Patients and Communities Act and supplements the definition section to include a definition for each additional category of professional. The effect of this change would require applicable manufacturers to report transfers of value to these additional provider types.

Next, the proposed change to the payment categories consolidates and adds to the available categorizations in the “nature of payment” selection that is required when reporting payments in the Open Payments program. CMS is proposing to consolidate two separate categories for continuing education programs (one for accredited/certified programs and the other for unaccredited/noncertified programs) into one “medical education programs.” It also proposes to add: “debt forgiveness” for forgiving a debt of a covered recipient; “long-term medical supply or device loan” for loans exceeding 90 days; and “acquisitions” for characterizing buyout payments made to covered recipients. Definitions for these new categories are proposed as well.

Further, CMS proposes standardizing the use of identifiers for reporting payments made related to medical devices. The proposal requires applicable manufacturers and group purchasing organizations to provide the device identifiers component, if any, when identifying reported devices in the Open Payment program. CMS explicitly states that it is not proposing the inclusion of the full unique device identifiers.

Finally, the references to nonresearch NDCs were erroneously removed in a previous amendment to the rule text and CMS is correcting the error in this proposed rule. CMS reiterated that reporting NDCs are required for both research and nonresearch payments.

For Further Information

If you have any questions about this Alert or would like more information, please contact Frederick R. Ball, Erin M. Duffy, Lauren G. Perry, any of the attorneys in our Life Sciences, Biotech, Medical Devices, Pharmaceuticals and Biologics Group or the attorney in the firm with whom you are regularly in contact.

Notes

[1] 84 Fed. Reg. 40482, 40713-16 (Aug. 14, 2019). See our previous alert about the subject here.

[2] Section 1128G of the Social Security Act (42 U.S.C. § 1320a-7g).

[3] Section 6111 of the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (SUPPORT Act) (Pub. L. 115-270).

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