Part of health care reform in America, the Physician Payments Sunshine Act (commonly referred to as the Sunshine Act) brought much needed transparency to the general public, but also provided a series of challenges for financial professionals at manufacturers of covered drugs, devices, biologicals and medical supplies and group purchasing organizations.
Starting August 1, 2013, affected organizations were to collect, submit, review, and publish data about their relationships with physicians and teaching hospitals, as highlighted by our Sunshine Act timeline infographic, highlighted by our introduction to the Sunshine Act.
What Gets Reported?In working toward transparency, items to be reported fall into two categories: Payments and Transfers of Value and Ownership Interests. Common data elements, according to Deloitte:
- HCP/O: Name, Specialty, Institution, Address, Local Government ID
- Organization: Reporting Unit or Business Unit
- Event: Venue, Location, HCP Attendees, Non-HCP Attendees, Agenda
- Clinical ID: Protocol, Approval Date
- Transaction Date: Year, Date Month
- Purpose: Consulting, Research, Food
- Payment Method: Cash, Payment in Kind
- Contract: Date, Description
- Product: Name, Approved Date
Payments and Transfers of ValueFor applicable manufacturers and group purchasing organizations, all payments and transfers of items of value are to be reported under the Sunshine Act. In this, there are 14 categories constituting payments or transfers of value:
- Consulting fees
- Compensation for services other than consulting
- Travel (including the specified destinations
- Charitable contribution
- Royalty or license
- Current or prospective ownership or investment interest
- Direct compensation for serving as faculty or as a speaker for a medical education program
In addition to direct payments listed above, manufacturers must report indirect payments and transfers of value made to a third party as requested by or on behalf of a physician.
CMS defines an "indirect payment" as a payment or transfer of value that a manufacturer "requires, instructs or directs to be provided to a covered recipient, regardless of whether the applicable manufacturer specifies the covered recipient.”
Ownership Interests:In terms of ownership interests:
- Manufacturers as well as GPOs are required to report on ownership interests held by physicians and their immediate family members.
- The transparency report must include the dollar amount invested, the value and terms of ownership or investment interest, and any payment provided to physician owner or investor.
- However, there are certain ownership interests, such as securities which may be purchased on terms generally available to the public and which are listed on a stock exchange in which quotations are published on a daily basis, which are not reportable ownership interests.
Non-Compliance PenaltiesIf you are a growing company that has been collecting information manually, or you are using a non-Sunshine Act compliant expense reporting software, know this: Reporting incomplete or inaccurate information has the potential to mislead patients and other stakeholders and damage the reputation of manufacturers, physicians and teaching hospitals.
Depending on the circumstances, non-compliance with the Sunshine Act’s reporting requirements could subject a manufacturer to financial penalties ranging from:
- $1,000 to $10,000 for each payment or transfer of value not reported; and
- $10,000 to $100,000 for “knowingly” failing to report a payment or transfer of value.
Make Transparency Easy: Sunshine Act Compliant Expense Reporting SoftwareEven if you were willing to take the time out of your day to manually fill out payments and transfers of value, how accurate can you guarantee the data would be?
You don’t want to risk your reputation and income for an incorrect expense report.
Nexonia makes Sunshine Act reporting easy, offering expense reporting software that will save your company time and money, provide compliance, and simplify the whole process.
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