One of the biggest challenges pharmaceutical manufacturers face in trying to establish compliance with the Affordable Care Act (ACA) is uncertainty. With so many details of the 906-page legislation still undefined and awaiting final guidance, determining the scope, timing, and impact of its contents has been like a high-stakes game of poker — a blend of skill, bluffing, and betting. And just like high-stakes poker, the consequences of a misstep could cost the players dearly.
Manufacturers have received guidance on some elements, like the Sunshine Act, for which data collection began on August 1, 2013 and the reporting deadline is March 31, 2014. But uncertainty still festers in many other areas.
In a recent survey conducted by Revitas, the majority of pharmaceutical manufacturers surveyed reported that their companies have been unable thus far to estimate the cost of implementing the new AMP calculation. The most-cited reason for this was the range of potential changes affecting a number of business functions, including existing policies and methodologies, system design documentation, the unit rebate amount (URA) calculation, and requirements for the drug data repository (DDR) system.
Pharma companies are overwrought with questions, some pertaining to pharma’s already tenuous relationship with the public. How will consumers perceive the “transfers of value” made from manufacturers to physicians? Still other questions investigate a deeper unknown: penalties. How often and to what degree will the Department of Justice pursue manufacturers when they violate new facets of the ACA?
The worst outcome of this deluge of uncertainty is inaction. In one sense, it’s understandable why manufacturers would delay taking action given the challenges of discerning the best way to proceed based on minimal guidance, but this paralysis by analysis is actually one of the biggest threats to ACA compliance. The past has taught us that the government does not accept its own ineptitude or procrastination as an excuse for inaction.
The one guiding principle when facing ACA compliance: Be prepared. Here are four tips on how to ready your company for the ACA unknowns.
- Update existing calculation methodologies and policies.
While we don’t yet know what changes the ACA will bring, you can revisit your current methodologies and calculations to make sure they’re in line with any changes your business has made since the last time they were reviewed. Update them with any new classes of trade or new programs you’ve entered into, and scope out what changes outside of the ACA your company expects over the coming quarter, year, and even couple of years. Make sure your calculations appropriately reflect these coming changes.
- Take stock of all areas that ACA implementation could potentially impact.
Calculations, policies, interfaces, and reports are all likely to feel the brunt of the ACA. With those areas in mind, determine the internal scope of potential changes, from the (relatively) simple changes to policy — such as inclusion and exclusion — to wholesale changes in calculation logic. Knowing the possible worst case scenario will prepare you for whatever changes are eventually handed down.
- Raise internal awareness of potential changes.
Any changes will require the coordination of multiple parties, including compliance, IT, finance, legal, and more. Get each division on board and solicit their input on creating strategies to manage potential changes to each of their areas. As new nuggets of information arise through CMA updates, news, and other sources, disseminate the knowledge to the team to keep everyone apprised. It’s especially important to keep stakeholders informed and on standby so they can more quickly review and approve necessary changes before they’re implemented.
- Get your data in line
Audit your available data and work with internal and external resources to maximize its current value and accuracy. It’s crucial to understand how it functions and who’s responsible for it. That way, if the final rule requires new product transfer information (i.e., EDI 867), you’ll know how to obtain it. Also keep in mind the systems and processes needed in order to leverage this type of data, such as new or changed interfaces or additional logic. By pre-emptively targeting and solving potential data problems, it will be easier to craft viable solutions when faced with changes.
Pharma manufacturers aren’t strangers to uncertain government regulations, and lessons learned in the past should provide additional guidance for ACA preparations. You can also brush up on options by reading a recent Revitas e-book “The Affordable Care Act in 2013: The Top 6 Points Every Pharmaceutical Manufacturer Must Consider.”
Given the upward trajectory of settlements between manufacturers and the federal government, both in terms of volume and monetary amount, the surest course of action seems to be the most cautious one. Over prepare for the worst and you can only be pleasantly surprised.