5 things you can do now to prepare for the Sunshine Act


We’re about one month away from CMS providing its final guidance on the Physician Payment Sunshine Act (hopefully). And it’s about time! It’s been more than a year since CMS announced it would collect feedback on the rule before issuing final guidance.

But even though we’re still waiting for the final ruling, now is the time to start preparing (if you haven’t already). While there’s no way to determine exactly what the future holds, there are plenty of ways to get ready in the meantime and lots of sage advice to be gleaned from industry experts. The reality is that the companies that comprehensively prepare will more likely be ready for whatever CMS has to say. Here are five things you can do today to get ready for the Sunshine Act:

  1. Map all upstream aggregate spend activity.

    Start by mapping upstream activities along the aggregate spend continuum. While a complex and time-consuming exercise, this process takes advantage of this interim, waiting period to fill in the gaps — before you have to scramble. Don’t forget about things like “natures and purposes,” HCP/O qualification, needs assessment, or fair market value. Identify who owns these areas and which departments touch them along the way. Also, don’t forget about all the areas that feed aggregate spend that you will be required to report on. This includes everything from royalties and loaners to consulting fees and research.

  2. Get your contracts in order.
    Once everything is mapped, make sure everything can be managed in a central, automated contract repository. This will serve as the single source of truth for your aggregate spend data and will ensure accuracy. CBI recently reported that more than one-third of manufacturers don’t validate their aggregate spend data or are unsure if they do. This is an auditing time bomb and a sure indicator that contract management and the vital upstream activities that feed it are being mishandled.
  3. Communicate with your HCP/Os.
    It’s amazing how much misunderstanding still exists among those who will be directly impacted by the Sunshine Act. In December 2011, MMIS, Inc. and the American Medical Association collaborated on a survey distributed to 50,000 physicians. The results were astonishing. Even with the expected data collection deadline a mere month away (of course, it was later delayed by CMS), 67 percent of the respondents did not know that aggregate spend data would be made public on a website. While some companies have spent a great deal of time and money preparing for the Sunshine Act, many have neglected to adequately communicate with the counter-parties in these transactions.
  4. To maintain strong relationships with healthcare providers, manufacturers need to think through and execute sensible communication plans. It’s also important to make sure that communication is a two-way street. Physicians will need a way to review aggregate spend data and report any issues if the data is inaccurate.

  5. Get a flexible solution in place.
    If history has taught us anything about how the government regulates the pharmaceutical industry, it’s that the rule today is bound to change tomorrow. The most judicious pharmaceutical manufacturers will select a Sunshine Act solution that integrates well with existing technology investments and has a highly flexible architecture to adapt to the evolving regulatory environment that has lately defined life sciences. The last thing you want to do is spend a lot of money locking yourself into a system that will be costly and cumbersome to modify in the coming years.
  6. Prepare for the worst.
    I cannot emphasize this enough: over prepare. Since no one has a real indication of how the final rule from CMS will shape up, it’s better to assume the strictest and most comprehensive application of the Act. The number of settlements between manufacturers and the government has only increased in frequency and fine amounts. In a down economy this is an abundant source of revenue for the government and is largely limited only by the available manpower to pursue the cases. I think it is quite likely that there will be a high profile Sunshine Act case brought against a manufacturer in the coming years. Don’t be that company.

The bottom line? Don’t hesitate to act. If you haven’t done so already, you should create a reporting strategy immediately while you have the time. Gather a cross-functional committee within your company, representing all departments that might be affected by the Sunshine Act. Once your team is assembled, you can begin mapping the areas of aggregate spend within your organization, investigating an appropriate solution, and then implementing as soon as we get the final word from CMS. It’s an ambitious task, so start now!

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Becky Holloway

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