The Open Payments—formerly known as the Sunshine Act—section of the U.S. healthcare reform law requires certain manufacturers of covered drugs, devices, biologicals, and medical supplies to report payments or other transfers of value they make to physicians and teaching hospitals to the Centers of Medicare and Medicaid, or CMS.
This is easier said than done, as companies continue to struggle with interpreting the rules and making changes to internal business processes to accommodate the requirements. Here are some best practices that Melissa LaFrain, senior manager, corporate compliance, Wright Medical Technology, shared with the audience at the 2014 Pharma Forum, held in March in Orlando and co-organized by MeetingsNet and CBI.
The assumptions document explains the reasonable assumptions made and methodologies used as part of a company’s good-faith effort to interpret and implement its tracking and reporting obligations under Open Payments. The document should explain your interpretations of the law and how the information will be derived from the different business areas. “While CMS does not require companies to submit an assumptions document, it will help support your methodology if someone comes knocking on your door. Be sure to have the document reviewed by outside counsel,” said LaFrain.
2. Determine How You Will Value Meals
Because meals are among the “transfers of value” that companies now have to track, it’s important to decide how you will calculate the amount spent per person. According to the regulations, when food or beverage is provided in a group setting, the value of the meal must be reported “only for the covered recipients who actually partook in the food or beverage.” When a company provides multiple meals to participants, LaFrain said she makes the assumption that all participants in the activity partook of all meals provided and will be reported as such unless a participant notifies the company that he or she did not partake in a meal.
The regulations state that when food or beverage is provided in a group setting and the cost of each individual’s meal is not separately identifiable, “the manufacturer must calculate the value per person by dividing the entire cost of the food and beverage by the total number of individuals who partook in the meal” and report the value per person for each covered recipient who partook in the meal, according to 42 CFR § 403.904(h).
When company-sponsored activities include a meal for which the company pays the vendor a guaranteed minimum amount, LaFrain said she takes the position that any amount that the company must compensate the vendor is attributable solely to the guaranteed minimum and is not part of the “cost for food” that must be allocated to the participants in the meal. For example, if the company enters into a contract with a restaurant guaranteeing 50 participants at $50 per plate of food but only 45 participants attend, only 45 participants would be reported at $50 per plate (i.e., the cost of the no-shows’ meals are not allocated across the total attendees). However, if there were 55 participants, each would be fully attributed $50 for food (55 x $50 per plate). Whatever approach you take, the most important thing, LaFrain stressed, is to be consistent. Make sure that your methodology for both meal attribution and allocation is outlined in your assumptions document.
3. Tracking Transportation
You should trace a specific transportation expense to an individual to the extent you can. For example, most limo or town-car services are assigned to a specific person. In this case, the cost should be allocated to the specific physician who took the limo or town car. If there is a shuttle, however, and there are multiple transports throughout the day, it may not be reasonably feasible to track the attendees getting off and on a bus. In this case, she said, “we take a position similar to the food and beverage guarantee scenario—the transfer of value is calculated based on guaranteed seat availability, so the eight who take the shuttle aren’t being held accountable for the 20 who didn’t.”
4. Tell Docs What to Expect
Docs are worried about their financial information being publicly posted. What can you do to put their minds at rest? Developing a communication plan that will manage their expectations will help. For example, you may want to explain on meeting invitations and agendas what information you will be disclosing and reporting—F&B, transportation, lodging, etc. You also can include it on your sign-in sheets. LaFrain pointed to a Sunshine Act brochure that medical device manufacturer association AdvaMed provides that you can download and brand with your organization’s logo and colors. You can give the brochure to your sales reps to hand out to docs, and make it available on your sign-in tables.
Another good resource for docs and planners is the CMS Open Payment FAQ resource.
5. Have a Dispute Resolution Plan
CMS gives physicians 45 days to dispute a transfer of value; manufacturers then have 15 days to fix it. But fixing it after the fact is not a best practice, she advised. Current thinking is to disclose the information quarterly to your HCP attendees so you have time to nip any disputes in the bud. While smaller companies likely will log disputes manually on an Excel spreadsheet, if you have the resources to do it, it’s a good idea to set up an automatic system for physicians to log into to register a dispute.
No matter how prepared you are, you likely will still have disputes once the numbers are up on the CMS Web site. It’s also a good idea to set up a customer service hotline or determine who will triage the influx of phone calls and e-mails from disgruntled physicians.
Remember that the data will be publicly available and searchable, and it will be more than just patients who will be looking at it—everyone from the Office of the Inspector General of the U.S. Department of Health and Human Services, to the IRS, to divorce attorneys will have access to the data. It’s in your and your physician attendees’ best interests to make sure the information reported is accurate.