“It’s like we’re flying a plane at 40,000 feet and just now are opening up the book to see how we’ll land,” said Daniel Garen, senior vice president and chief compliance officer with Wright Medical Technology, who opened the 2013 Pharma Forum at the Marriott World Center in Orlando by detailing what today's life sciences meeting managers need to know about the Sunshine Act. The Forum is co-organized by and The Center for Business Intelligence.
Final rules for the Physician Payment Sunshine Act, a provision of the Patient Protection and Affordable Care Act, require that manufacturers of drugs, devices, biologicals, and medical supplies covered by Medicare, Medicaid, and the Children’s Health Insurance Program report all transfers of value—including payments, gifts, research and consulting fees, speaking fees, meals, and travel—to physicians and teaching hospitals.
To continue Garen’s analogy, the plane pushed back from the gate in 2004, when states first began passing their own transparency laws. Then it got off the ground when the Affordable Care Act got under way in 2009, and reached cruising altitude in 2010 when PPACA was passed into law. We’ve been in a holding pattern since 2011, however: While the Centers for Medicare and Medicaid promised to issue guidance on how to implement Sunshine, that didn’t happen until February of this year.
The Costs of Errors
The ostensible goal of Sunshine, he said, is to enable patients to see their healthcare providers’ financial relationships with industry. “But we’re not there yet,” he said. The government, however, is finding ways to use the data that’s already out there. The feds are mining it to find outliers, such as disproportionate payments, to back up qui tam (whistleblower) lawsuits, and to uncover potential kickbacks and inducements to prescribers. One of the biggest miners of available data? The Internal Revenue Service.
The Sunshine Act also is intended to make the idea of receiving something of value on the physician side, or providing something of value on the manufacturer side, less attractive. “Both physicians and manufacturers are now thinking twice” about their financial relationships, Garen said, though the ultimate responsibility—and penalties—belong to the manufacturers.
If found out of compliance, medical device, biotech, and pharma manufacturers, along with group purchasing organizations, will have to pay $10,000 for each mistake they make in their data reporting, with a cap of $150,000. “If you knowingly make a mistake, it’ll cost up to $100,000 for each incident, with a cap of $1 million. The higher fines only come into play if the error is intentional.
“Manufacturers are ultimately responsible for the accuracy of the data,” Garen said. “We get information from a number of sources, but manufacturers are the ones on the hook. We are the ones who need to make sure we have the right procedures, policies, training, and education for physicians, and our executives have to certify that the information is accurate.”
All this is costly to implement, monitor, and comply with, and it requires a number of departments to work together. And, while it may all start with compliance, implementation is really a financial and IT issue, he added.
Know What Transactions Are Reportable
Companies have to integrate their vendors' data, and identify multiple sources of HCP spend, he said. These include all direct or indirect transfers of value, from cash and marketing materials to non-patient educational materials, in addition to gifts, honoraria, and food and travel expenses.
And the details to be tracked are many, including HCP name/address/specialty, payment dates, the drug or device that the payment or transfer of value (POTV) relates to, and the form of payment rendered. One issue that will be thorny is vendor data integration, especially the form of what physician identification you use to track each healthcare provider. Most, but not all, HCPs have a national provider identification, or NPI, number. The government says you have to make a “good faith effort” to find that number, which means you “have to go through all the John Smiths to make sure you’re reporting for the right person—and by the way, he doesn’t have an NPI.” While he didn’t have a solution for this issue, he did warn that planners should know that it’s in play.
Addressing a persistent rumor that companies are going to start holding their HCP meetings in Canada to get around Sunshine requirements, Garen said it would do no good “because it doesn’t matter where the meeting is held—it’s where [the HCPs] are licensed.”
Incorporate Sunshine Requirements Into Your Event Management Process
To meet Sunshine's requirements, meetings managers must gather data across multiple areas of spend, and often from many third-party suppliers. “Pay attention to the details,” he stressed. “What’s Dr. Smith’s NPI number, what product am I talking to him about?” Companies are counting on you to manage their events, collect and reconcile expenses, report spend into their aggregate spend system, and provide supporting documentation, he said.
For event management, you'll need to manage who is invited, both on theand attendee side, and everything to do with the venue you select, including hotel, meal, and transportation spend. You'll also have to determine how to handle invitations, and manage proof of attendance. “What if we had to have everyone in this room sign in before they came in,” he said, looking out over the crowd of some 600 people. “We would have had to start two hours early.” He added that we’ll likely see more use of badge-swiping technology to streamline the process.
And, while you don’t have to report POTOVs of less than $10 per occurrence, you still need to track even lesser amounts to be able to monitor where individual HCPs are in terms of the $100 annual cap.
Determine How Information Will Flow
The Centers for Medicare and Medicaid require companies to report data for August 1, 2013, through December 2013 by March 31, 2014. The data goes public by September 30, 2014. CMS will give HCPs 45 days to review their data, and dispute any discrepancies. “If you find a mistake, report it right away,” said Garen. “If you make a mistake, it’s $10,000. If you don’t report it [and it’s discovered], it’s $100,000.”
"Everyone needs to have someone who's responsible for the aggregate spend data," he said. And you need to be able to get your hands on the evidence that proves your data's validity quickly as well, since you'll only have 15 calendar days to find evidence to support your data if it's challenged. This means having a systematic way to store receipts, sign-in sheets, lists, and other tracking documentation.
It's vital to understand your company's or your clients’ policies, said Garen, and to have communication channels set up to let everyone involved know when those policies change. Companies will be monitoring to ensure policies are being adhered to, and management will review the aggregate spend reports to certify that everything is correct.
Who Will Use the Data?
The short answer, Garen said, is that we all will. It's important to get all this tracking and reporting data right, and not just to avoid penalties and fines, he added. The data will be used internally by companies to ensure they're compliant with state laws and company policies. And the data can be used beyond even that, as Garen pointed out: “I’ll be looking at it to see what our competitors are doing.”
Then there are the external parties—the media, the HCPs, patients, medical associations, and academic researchers—all of whom will be scouring the data as well to highlight life sciences spend on HCPs on a local, regional, and national level, see where their own physicians rank, and examine how spend patterns do or do not affect HCP behavior.
Leveraging Big Data
But it’s not all about a burden being imposed on manufacturers, Garen said. The up side of Sunshine is that “you now have a treasure trove of data.” You will need to work closely with your compliance and legal departments to ensure your policies and procedures don’t imply that you’ll use the data to better influence docs, but rather to use it in aggregate to improve your programs. You also can use the data to glean good and ideas and best practices from what others are reporting.