The Centers for Medicare and Medicaid Services (CMS) recently denied a request from a bipartisan group of 23 members of congress to exempt the distribution of textbooks and scientific peer-reviewed medical journal materials from the reporting requirements under the Physician Payment Sunshine Act (Sunshine Act). The regulatory preamble in the CMS final rule provides that educational materials (including medical textbooks) furnished to physicians for their own education, but that do not directly benefit patients, are subject to reporting under the Sunshine Act. 42 C.F.R. § 403.904(i)(4).
Many in Congress and many medical professional organizations had objected to the reportability of free distributions of textbooks and scientific peer-reviewed medical journal materials. The lawmakers asserted that Congress excluded educational materials that directly benefit patients or are intended for patient use from the Sunshine Act reporting requirements, including educational materials that directly benefit patients or are intended for patient use. SSA 1128G(e)(10)(B)(iii).
In response, CMS stated that it did not believe that the Sunshine Act allowed applicable manufacturers to exclude from Sunshine Act reporting payments or other transfers in the form of educational materials, as these materials do not provide direct patient benefits nor are they intended for patient use. Potential downstream benefits to patients, according to CMS, are not sufficient to justify an exclusion from the reporting requirements. However, wall models and anatomical models which are intended to be used with patients, and therefore directly benefit patients, are excluded from the reporting requirements.
Thus, medical textbooks and peer-reviewed journals in most cases must be reported by manufacturers as payments either under the “education” or “gift” categories.