Friends, it is that time of the year. No, I am not talking about shopping for gifts! It’s time to get all your HCP aggregate spend expenses together. Open Payments (Sunshine Act) report submission for the year 2017 starts on Feb 1st, 2018. There are less than 40 working days left. That is if you don’t take any time off.
As you probably know from reporting previous years that generating these compliance reports are not easy. Here are a few things to watch out for as you prepare.
The transition from gross to net sales is marked by several deductions including rebates, chargebacks, discounts, allowances, and returns. Rebates, given to pharmacy benefit managers (PBMs), insurers, or directly to patients, are a substantial part of this. Their complexity, owing to varied conditions and tiers, makes accurate prediction and calculation difficult. Chargebacks given to entities like wholesalers or group purchasing organizations add further complexity. Managing data from various intermediaries and ensuring accuracy amid high transaction volumes is a significant challenge. Specialized rebate and chargeback management software like IntegriChain, Model N, and Vista, integrated with SAP, can handle these complex calculations, ensuring accuracy and compliance.
Did You Collect Them All?
Make sure you are pulling expenses from all channels. Companies may have HCP or aggregate spend eligible expenses in multiple places. Expenses could be coming to the accounting department from any of the following channels:
- Companies run CRM systems such as Salesforce, NetSuite, Veeva
- 3rd party expense tools such as Concur, Expensify, ExpenseWire and more
- Vendor Bills generated from or outside of their ERP system
- Hard to believe but some companies may even have paper or email submission of expenses
How expenses are managed is very specific to a given organization. Some companies might have excellent processes in place based on best practices. Such companies will have little problems but others may not be as organized and can easily spend weeks on this activity. Ensuring data accuracy is the most time-consuming activity in the reporting process. This is why a good solution accounts for auto error detection and correction in the software.
Are They Correct?
Once the expenses are together, ensure that these expenses are complete and approved. Many systems allow employees to keep an expense report open for days to which they are adding expenses on an ongoing basis. A given expense report may have multiple lines on it, not all of which might be eligible for reporting. Pulling such expenses will induce information inaccuracies in your report. If you haven’t been compiling these expenses on a monthly basis then the best option would be to wait until all HCP spend expense reports and vendor bills are complete and approved (but don’t wait too long). Depending on your processes, these expenses would be marked as paid for the most part. However, this is not necessary as far as they can be identified as complete and correct. Hopefully, you have a good filtering and analysis process in place within your systems and not have to “spreadsheet” your way through it.
“Civil monetary penalties (CMPs) of up to $1,000,000 may be imposed on your organization if it fails to report information in a timely, accurate, or complete manner” source: cms.gov
What Happens During Submission?
CMS has a well structured and automated validation process in place that analyzes every report as it is submitted. The open payments system validates your report in a four-step process. The short of it is, in only step 1&2, there are at least 24 validations the open payment system will run on your submission and kick your file back if it misses the mark.
Some inaccuracies related to the payment amount can make its way into the report and to the CMS undetected. If you report spending $1,000 on a physician instead of $100, it will make it through the submission process. However, it will be caught when the CMS releases data to the Physicians and Teaching Hospitals during the Review and Dispute Data phase of the reporting. You want to avoid this. Why? Simple, you don’t want to get unnecessary attention from the CMS and expose yourself to audits. Not to mention the distrust it spreads with the physician and hospital community.
“Applicable GPOs may be audited to ensure the submission of timely, accurate, and complete reports on ownership or investment interests held by physicians and their immediate family members at any time” source: cms.gov
There are tactics that can be employed to detect and resolve disputes throughout the year well before submitting to the CMS which will be a topic for another day. Hope you found helpful tidbits in this post. The most important take away would be that it is a time-consuming process so start putting your report together now if you have not already.