Edited as of December 2013 to reflex the Sunshine Act's new name, Open Payments.
If you operate a pharmaceutical or medical device business, more than likely you know about the new Physician Payment Sunshine Act, now called Open Payments. What you may not know is that companies out of compliance can be fined anywhere from $10,000 to $1,000,000.
As the Sunshine Act approaches, the need for pharmaceutical and medical supply companies to better understand expense reporting increases. In fact, according to the new law, federal reports must be electronic, easily downloadable, and searchable.
To help you ensure that your employees are up-to-speed with the upcoming changes and to help you stay in compliance, we offer the following six tips on surviving the legal change:
1. Discover spend
Inside those paper expense reports and receipts are important sources of payments that you’ll need to track. To ensure nothing gets missed, consider CRM systems, clinical trials, education services and 3rd party marketing firms as some of the many sources of data that need to be tracked. Expense reports may contain about 80% of the transactions, but they are likely to represent less than 20% of the reportable costs.
2. Standardize a Health Care Providers (HCP) list
Standardizing the source list of HCPs at the outset so that all systems and processes share a single master list, will eliminate most of the challenges in aggregating spend. Otherwise, you must take all of those names recorded for each expenditure and figure out exactly who each one uniquely refers to in order to create your reports. Lots of systems contribute to this data, not just expenses, so give your IT staff a break and consolidate your different systems and reconcile it all together.
3. Capture details
There’s no detail too small. Capturing all travel, gifts, honoraria and other gifts above $10 as well as itemized dates, values and the nature of the benefits, will position you well to meet all state and federal reporting needs. There are five kinds of data that must be tracked: the expense, the HCP it was spent on, the person who spent the money, and where and why it was spent.
Make this task as easy as possible for you staff with shared data via web services. With seamless communication between systems, your employees can stay focused on selling products. If the sales rep has created this information in your CRM system, auto-create that expense for him as you already have most or all of the data. It’s also critical to have a strategy for mobile expense receipt and data capture, as sales teams increasingly access and record expense data on iPads, smart phones, and other mobile devices.
4. Consolidate data in one place
If your company is like most, you don’t have just one source of reportable data. The new law requires one consolidated report from your company, so this means that all of the various systems and sources need to end up in a single, detailed repository for producing state and federal reports. All of the data sources you identified in tip 1 need to feed into this aggregate spend repository, such as the R-Squared SpendTracker Concur Connector Solution.
5. Train your employees
Staff will only take the time to do this correctly if they understand the critical importance of the data to your company’s bottom line. And even more, your sales reps may be the first line of information to your client physicians. To help your company navigate through the Sunshine Act, now called Open Payments, you should plan to offer several briefing sessions to help them understand their role and the impact of transparency laws on the physicians they work with.
6. Stay ahead of the game
Even if you feel prepared, don’t get complacent. Indications are that this same type of legislation will be adopted across other countries in the future. Many of the states that don’t yet have reporting requirements may consider adding new ones – they have been waiting like you for the final rules from the federal level before making their decisions. And those states that do have laws on the books are making changes regularly that will affect you.
Want to learn more about the Sunshine Act and how to make sure your company is compliant? Join Concur’s “Best Practices for Expense Management and Compliance with the Sunshine Act” webinar on February 13th where representatives from RSquared and Acumed will share best practices for compliance.