Reviewing the Sunshine Act

Last August, the Sunshine Act (also known as Open Payments) took effect, requiring medical professionals to submit detailed owner information and payment data to the U.S. government. This included all physician travel, gifts, meals, honoraria and other costs above $10. On top of the law’s strict guidelines, steep fines ranging from $10,000 up to $1,000,000 were imposed for failure to submit comprehensive reports.

Over the course of several years, we have been reporting about how businesses can prepare for the Sunshine Act, how to gain visibility into physician spend data, how to stay compliant with the law, and more. Most companies and hospitals were working, and continue to work from, a manual reporting system using spreadsheets to manage every aspect of hundreds of physicians’ spend. The margin of error, lack of transparency and risk of non-compliance with this method is extremely high. Ideally, companies would have software that uniquely identifies each physician attendee in a sales process, tracks the spend on each physician attendee, reports costs per physician, and adds it all up per physician at the end of the year. In fact, according to the new law, federal reports must be electronic, easily downloadable, and searchable. Luckily, those organizations that implemented Concur before the data collection deadline last year were able to do all of the above.

Since the Centers for Medicare & Medicaid Services (CMS) intend to release all reported financial payment information from 2013 next week on September 30, 2014, let’s briefly review what the Sunshine Act requires physicians to report and ways to accurately capture and consolidate data to maintain compliance.

From our Open Payments, a.k.a. The Sunshine Act, Is In Effect — Are You Prepared? blog post from August 2013:  


  1. Learn if the reporting requirements apply to your company

    Open Payments (The Sunshine Act) applies to physicians, hospitals and many “applicable manufacturers”. Your company is an “applicable manufacturer” if it is both:

    • A United States company that produces, prepares, reproduces or compounds pharmaceuticals, medical devices, biological or medical supplies
    • A company under common ownership such as a charity, non-profit organization or voluntary association; providing assistance or support, marketing, promotion, sale or distribution on behalf of such a manufacturer as listed above
  2. Know what you need to track

    While you should refer to the Open Payments section of the CMS website for a more complete explanation and list of exclusions, in general you should be looking for:

    • Any payment, including cash, compensation, food, gift, consulting fees, honoraria, research, education, or conference funding, grants, stock, stock options, ownership and investment interest, royalties or licenses, or charitable contributions to a physician or a teaching hospital
    • $10 and over, or if the annual payments are greater than $100, all payments even those less than $10
  3. Evaluate your past spend

    By taking a look at what your company has previously spent, you can strategically think about what practices Open Payments, formerly the Sunshine Act, might change.

  4. Implement an easy, automated system to track and report your spend

    Trying to manually collect, calculate and report on all your spend can be extremely time consuming and can result in potential errors in reporting. Think of all the hours it could take to manually go through a list of names recorded for each expense, clarifying each expenditure and assigning ownership in each report. Now, think of how easy all of that could be if it was automated!

    An automated software solution can streamline the expense reporting processes that your business needs to be compliant with Open Payments, formerly known as the Sunshine Act. With Concur, each physician attendee is uniquely identified through a standardized/consolidated Health Care Providers (HCP) list Automated access to such a list eliminates not only time, but the challenges involved in aggregate spend. Concur’s automated expense solution tracks spend per attendee, reports costs and provides a comprehensive report per physician at the end of each year.

From 6 Tips to Prepare for the Physician Payment Sunshine Act, Now Named Open Payments blog post from February 2013:

To help you ensure that your employees are up-to-speed with the upcoming changes and 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.

And lastly, if you didn’t know, here is how Concur helps you manage your healthcare provider spend:

  • Easy itemization for each expense to the associated health care provider
  • Real-time meeting and event attendee itemization to the associated health care provider
  • Mobile tools for tracking health care provider spend from the road
  • Spend limitations to control cost-per-attendee for specific expenses, and to a set cost
  • Connection to aggregate spend vendors for seamless federal reporting
  • Industry-specific reporting and dashboards for internal business intelligence and auditing

To find out more about The Essential Guide to Open Payments Compliance:

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