While no one is surprised that HHS missed its October 1, 2011 deadline for publishing reporting guidelines to the healthcare industry for Physician Payments Sunshine Act reporting, the bottom line is a lack of performance on CMS’s part to provide direction to the industry should not be (and likely will not be) considered an excuse for a lack of preparedness for data collection by covered reporting entities (U.S. drug, medical device, biological or medical supply manufacturers).
There has been no end to review of the provisions by lawyers, compliance officers and strategy consultants as well as the numerous symposia, conferences and training sessions spearheaded by CBI and others to prepare the industry for January 1, 2012; yet, as recently as September 27th 2011 in a revealing and informative webinar hosted by HMS, some manufacturers reported that they are still in the “not yet prepared for Sunshine” status as they work to complete spend transparency related initiatives and await CMS guidance. At this point, covered reporting entities will have to rely on their collective knowledge, foresight and intelligence to begin data collection on January 1, 2011.
The question at this point is what should that knowledge, foresight and intelligence suggest in the way of prioritizing capabilities not yet implemented to meet reporting requirements?
The pillars of transparency reporting remain governance, accuracy, completeness and consistency, roughly in that order.
What steps can be taken to address deficiencies in spend transparency governance?
Any decision, issue or requirement that must be addressed to achieve spend transparency objectives demands a central body chartered to implement policy and procedures, monitor corporate spend activities, manage risks and issues and set standards related to how business activities involving covered recipients are conducted. It is likely that at this point in time certain departments or stakeholders have stepped forward to lead the portfolio of initiatives necessary to achieve spend transparency requirements. If it has not already occurred, this body should be formally recognized within the enterprise as the group chartered to lead all initiatives (technical, procedural, legal and regulatory) identified under the Sunshine Provisions and related jurisdictional (state and local) reporting umbrella. If the executive sponsor for this body is not an operating unit president, senior vice president, CEO or equivalent, correct that oversight now. When quick overarching decisions have to be made during 2012 to steer the enterprise in specific directions, this governance body will need the “juice” to get things done quickly without debate, discussion or hesitation.
For example, if the company is currently engaged in reportable spend activities that it cannot report because it does not have the systems in place to capture the spend (maybe vouchers, brochures or coupons) who makes the call (who has the authority within the enterprise to make the call) as to whether the promotional activity should be suspended until such time that proper capture and reporting of spend can take place? (This does not even take into account whether the company has determined the fair market value for these items.)
The governance body should consist of major stakeholders representing all groups in the enterprise involved in reportable spend activities. Prepare, review and approve a charter for this group and schedule regular meetings at least through the first quarter of 2012. At a minimum this group will have to address the absence of CMS guidance to this point and how the company will interpret that guidance once it is available. Top-level stakeholders can be difficult to commit to a schedule so proactive scheduling is a good idea, even if a meeting or two ends up being canceled due to lack of a full agenda.
The next entry will address accuracy and what can be done in the short term to shore up any major deficiencies in this regard.