By Ann Neuer 

 

August 20, 2013 | The life sciences sector has taken a giant step toward transparency with the August 1, 2013 launch of the Physician Payments Sunshine Act.  This piece of legislation, known as the “Sunshine Act”, is a provision of the Affordable Care Act, and requires reporting to the Centers for Medicare & Medicaid Services (CMS) of all payments and transfers of value worth $10 or more made to physicians and teaching hospitals.  The final rule was issued in February 2013, and applies to “applicable manufacturers”, namely drug, medical device, and medical supply companies that sell or distribute at least one covered product. Group purchasing organizations must also comply. 

 

The initial collection period runs from August 1 through December 31, 2013, and reports for this period are due to CMS at the end of the first quarter 2014.  From that point forward, reporting must be submitted on an annual basis.  In addition, this information is slated to go public starting September 2014.  

 

With these quickly approaching deadlines, Kyle Cunningham, Vice President of Product Management for Greenphire, a provider of global clinical payment technologies, sees sponsors at different levels of preparedness.  “What we see varies tremendously, with some more ready than others.  The real issue is the fact that broad amounts of data are spread across multiple systems and they must be brought together.  And with the timelines becoming more pressing for the collection period and—ultimately—the reporting on a publicly available database, we find that more clients are motivated to talk to us,” Cunningham says.  

 

To help applicable manufacturers comply with the Sunshine Act’s complex reporting requirements, CMS recently posted three data field templates.  These include: the Research Payment Template, which is the most extensive with 14 pages of information fields related to research data and demographic information on the principal investigator(s); the Physician Ownership Template, addressing reporting obligations for physician ownership of an applicable manufacturer; and the General Payments Template, a six page document, which covers payments not in connection with research.  Although CMS has created a Frequently Asked Questions webpage to provide guidance to applicable manufacturers, many companies lack the technological resources and manpower to track the information and comply in a timely and accurate manner.

 

This is where Greenphire’s web-based eClinicalGPS can step in.  This solution centralizes all transactions for comprehensive tracking of clinical payments, and facilitates accurate payment calculations from sponsors and contract research organizations (CRO) to all investigators, sites, and vendors involved in a clinical trial.  As Cunningham explains, “Payment information that is input into eClinicalGPS is drawn from clinical trial agreements with sites.  Once the data are entered in accordance with various rules, the technology can systematically generate payment transactions and these streams of data are available at a granular level to help our clients comply with the legislation.”

 

Moreover, Cunningham points out that this solution, designed largely to automate payments to sites, also reduces the substantial costs of administrative overhead tied to tracking financial information that is frequently scattered across many systems, departments, and third parties. As a result, Sunshine Act payment aggregation and disclosure using manual methods can be particularly difficult, if not impossible, and error prone.  

 

This is serious business with stiff penalties for failure to comply.  Specifically, CMS can levy fines of up to $10,000 on manufacturers failing to report gifts, and up to $100,000 if they knowingly omitted such information.  The maximum civil monetary penalty for each annual submission for a knowing failure to report is $1,000,000.

 

To expand its compliance efforts with the Sunshine Act and with other global regulations, Greenphire has recently announced a strategic partnership with consultant Ernst & Young.  Together, the two companies plan to develop a first-of-its-kind, web-based SAAS solution to manage and track all transactional interactions between pharmaceutical companies and healthcare practitioners. This will include cash transactions and transfers of value, on a global basis across all aspects of pharmaceutical operations.  This capability has implications for Sunshine Act compliance as capturing various categories of transfers of value can be challenging.  These refer to non-cash transactions such as lunch-and-learns, pens, and loaned equipment.

 

According to Cunningham, “Spend is not easily quantified when it’s not a cash transaction, but in our initiative with Ernst & Young, we’ll be able to capture various categories of spend.  We’ll be adding value to the equation by expanding the confidence we will give to sponsors in the data reporting and the output they’ll be sending to CMS and to other regulatory agencies around the world.”