These acts and regulations aim to increase transparency in the financial relationships that exist between healthcare providers and manufacturers of drugs, medical devices, and biological and medical supplies.
Companies subject to Sunshine regulations must carefully record all payments or transfers of value (ToV) between themselves and registered health care providers (HCP).
What payments or ToVs need to be reported under Open Payment or Sunshine Acts?
In the US, the Centers for Medicare and Medicaid Services (CMS) identify three categories that payments or ToVs fall into:
- Research payments (made in connection with a research agreement)
- General payments
- Ownership or investment.
“Payments” don’t always refer to cash payments in the context of Sunshine Act reporting. They can include but are not limited to food and drink, entertainment, gifts, travel and accommodation, consulting fees, charitable contributions and more.
Companies subject to Open Payment or Sunshine Act Reporting must collect the data, verify it and attest to its accuracy before reporting it to the relevant authorities.
In the US, the penalty for “knowing failure to report” ranges from $10,000 to $100,000 per payment, up to a maximum of $1,000,000.
Expense challenges in the healthcare industry - and overcoming them
Regulatory complexity
Healthcare organisations, particularly cross-border or multinational companies, are subject to compliance rules and regulations and closely scrutinised due to the potential impact of misconduct on the population at large. These regulations can change annually, and more countries are increasingly instituting them.
Non-compliance with Sunshine regulations can prove both expensive and legally damaging. Yet manually tracking expenses, and the additional data required by Sunshine Acts, is a time-consuming and error-prone task. Travel and expense spend, in particular, is difficult to track manually in the best of times, and the added burden of attendee tracking and regulatory reporting just makes it more so.
Automating expense management and Sunshine Act reporting enables organisations to easily track, verify and report relevant spending. No more manual expenses, no more forgotten attendees, and no more ambiguous HCP cost reporting.
Automated solutions allow users to enter expenses the moment they are incurred with a simple picture and add relevant data such as the HCP's contact details, the event, cost centre, etc. These tools will usually allow for manual HCP creation or will fetch the data from a company-approved or national database, making it even easier to ensure Sunshine Act reporting compliance.
Rapidly growing markets
Pharmaceutical and medical industry companies are constantly gaining access to more international markets, each with their own peculiarities and regulations. Growth can happen very quickly, as highlighted by the response to the COVID-19 pandemic and ensuing vaccine development.
Because of this, transparency requirements can be difficult to manage over a wide-spread operating base, both within Europe and outside. Doing so requires integrations at group level and excellent knowledge of global compliance, two success factors which can be elusive when using spreadsheets to manage expenses.
Expense tools aren’t all built the same: some work better in certain markets or geographies than others. It’s important to identify the entire breadth of your compliance needs to find the best tool to meet them.
Knowing which rules will apply to your employees and which regulations your Finance team will have to be aware of will save you time and headaches, but also a lot of money. And having a tool that helps your teams proactively gather data will make it easier on both them and you come tax season.
Data availability
Big Data is shaping organisations worldwide, and companies not using their data correctly are missing out on savings opportunities and putting themselves at risk for non-compliance.
By consolidating the available data across the group, you can use your real-time in-house figures to shape your policies and corporate strategy.
Combining information from different departments will allow you to paint a big picture of your organisation’s spending and compliance habits, understand them, and correct them if and as necessary.
You will also be aware of any wrongdoing much faster, meaning this behaviour can be shut down immediately, before it has a chance to damage your organisation’s finances or reputation.
Today, most automated expense tools include powerful business analytics to help you easily sift through your data, identify anomalies, and make smart decisions.
They also provide you with a digital audit trail for every expense, allowing you to easily recall the data and see what changes were made and by whom. In the case of an official audit, this can prove crucial in determining the source of any issues or ascertaining that correct procedure was followed.
Conclusion
Managing HCP expenses with an automated tool such as MXP means data collection and Sunshine Act reporting are both straightforward. The data is all on one platform, manual reconciliation is a thing of the past and reports are all preconfigured to be produced in a few clicks for easy regulatory review.
The tool helps improve Sunshine Act reporting compliance by catching non-compliant items before they are submitted or reimbursed. It also helps detect fraud faster and at a lower cost than manual audits, reducing total expense management spend by 2-5%. And finally, it improves compliance, reducing related risks.
If your organisation is ready to implement an expense management solution that will simplify travel and expenses for everyone from traveling employees to financial controllers, Mobilexpense can help you.
