For close to two years, pharmaceutical and medical meeting planners have been gearing up for the start of the Physician Payments Sunshine Act (PPSA, or the “Sunshine Act”), which initially required companies to start tracking payments to physicians and teaching hospitals at the beginning of this year.
But the Centers for Medicare and Medicaid Services (CMS)—which was charged with writing guidelines surrounding the legislation—first released the guidelines in December 2011, two months later than expected.
The delay, coupled with a mandated public comment period, has put pharmaceutical and medical meeting planners in a holding pattern. Adding to their troubles are the guidelines themselves. While they provided some long-awaited clarity, they also brought more uncertainty.
Questions remain about how information should be submitted, which payments by meeting sponsor organizations are to be reported, and more. These issues won’t be clarified until the guidelines are finalized.PageBreak
“Planners were frustrated while waiting for some sort of detailed structure around the Sunshine Act rules, and when they did come out, we were very excited to see something,” says Lisa Keilty, president of The Keilty Group, a healthcare provider (HCP) and compliance consultancy based in New London, Conn. “But it’s the ‘hurry up and wait’ syndrome.”
PPSA requires drug, device, biological and medical supply manufacturing companies to report payments and gifts of $10 or more to the government, and keep track of payments that add up to $100 or more, in a calendar year, for items worth less than $10. These expenses, called transfer-of-value (TOV) payments in the leglistation, include meeting costs such as travel, food and beverage, gifts, entertainment, conference fees and any compensation, such as speakers’ honoraria.
But the delay pushed back when pharmaceutical and medical manufacturers must start collecting data to a date to be announced when final guidelines are released sometime this year, or even later. PageBreak
Planner Implications
Regardless of when the act is finalized, planners need to track all meeting and event expenses made to physicians by—or on behalf of—pharmaceutical and medical manufacturers, and be prepared to report them. Penalties for noncompliance are steep: Each inadvertent failure to report carries a fine up to $10,000; knowing failures could be fined up to $100,000.
Pharmaceutical meeting planners need to be think like auditors. They have to be acutely aware of aggregating small amounts spent on each physician [expenses of $10 or less needn’t be reported, but if such charges add up to $100 over a year, they must be reported.] Also, planners must break down larger costs and allocate them to HCPs.
“Now, you can’t just put three doctors in a car,” says Rosaelena Ledesma-Bernaducci, CMP, congress manager for McVeigh Associates LLC., a company that specializes in strategic meetings management. “You have to divvy it up in a report, and track the cost allocated to each physician.
“Gone are the days when you chose to do business with your friend with the destination management company or kept using one hotel chain because they were always available last-minute,” she continues.
Now, she notes, “you need to show that you received quotes from multiple properties. You can’t do anything that’s perceived as a favor.”
Good and Bad Surprises
While most of the Sunshine Act details were anticipated, one positive surprise was the concession that “applicable manufacturers do not need to report any offerings of buffet meals, snacks or coffee at booths at conferences or other similar events,” because it would be too difficult to accurately track who consumed what.
Other surprises were less welcome.
“The reporting format was more detailed than expected. It’s not just the amount of payment, but also the exact date, how the transfer was made, and the name of the related drug and device associated with it,” says Andy McNeill, CEO of American Meetings Inc., a meetings management company. “You might have several physicians who work on three or four items, and now you need to break it down by product, not just by meeting. That can get hairy, especially when you have two departments splitting costs.”
Whether the payment transparency will cause some HCPs to decline invitations to meetings and events remains to be seen.
“Some doctors will opt out, others won’t,” says Ledesma-Bernaducci. “We’ll wait and see.”PageBreak
Tracking Technology
The data required by the Sunshine Act means an expense-tracking system is key. Most pharmaceutical companies began using strategic meetings management software a decade ago with the launch of the PhRMA Code, the voluntary pharmaceutical industry guidelines aimed at reducing expenditures.
“Our customers need to consolidate meetings data with their other systems to have a total spend picture for each HCP. A major trend we’ve seen is that companies are making sure all types and sizes of meetings are tracked within one system,” says Betty McNulty, senior vice president of account management at Active Network/Star Cite.
Another company, ExpenseAnywhere released a new module on Jan. 1 specifically for pharmaceutical clients. “There’s a lot of pieces to track,” says CEO Ashok Dhar. “The new module also enables companies to forward the data to HCPs before reporting so they can verify the expenditures.”
In late July, Cvent introduced its HCP product, which lets clients get detailed audit history for each participant and all events they’ve attended, says Jeannie Griffin, senior product manager of strategic meetings management. “I tried to allow enough configuration to slice and dice the information as needed, because at the end of the day, it all might change.”
Donna M. Airoldi, a freelance writer, would happily attend pharmaceutical meetings in exchange for more affordable healthcare.
