Sunshine Act and Beyond: Improving Policies and Strategies

Transcription

1 Helping companies identify and manage their compliance and commercial risk. C O M P L I A N C E IMPLEMENTATION SERVICES Sunshine Act and Beyond: Improving Policies and Strategies Presented by Vahan Minassian, J.D. June 11, 2014

2 2 Agenda Introduction Open Payments Overview Data Capture, Reporting and Other Compliance Challenges Defining Who Must Report Defining What Must be Reported Physician-Owned Entities Third Party Vendor Quality Physician Data Disputes Key Strategies for Enhancing Compliance Assumptions/Methodology Doc and Pre-Submission Checklist Data Monitoring and Trending Enhanced HCP Interactions Compliance Processes Enhanced Dispute Resolution Process

3 OPEN PAYMENTS OVERVIEW 3

4 4 Introduction Factors Driving Increased Scrutiny on Industry-HCP Relationships Government Payor Funding Curbing Overutilization/Overpayments Concern over Medical Decision-Making Worldwide fight against corruption (OECD, U.N. Convention Against Corruption) Inflammatory Press (e.g., ProPublica) Incentives for Prosecuting Health Care Fraud ( Whistleblowers ) PPACA Dodd-Frank Result: Proliferation of Transparency Laws/Regs

5 5 Open Payments Overview High-Level Requirement Companies ( Applicable Manufacturers ) that make, package, market or sell at least one federally reimbursable healthcare product ( Covered Products ) have to capture and report direct and indirect financial interactions with HCPs and teaching hospitals to CMS ( Covered Recipients ), who will post this information on a public website. Timeline Data Collection Cycle August 31, 2013 December 31, 2014 Phase 1 Submission Deadline ( Aggregate Data ) March 31, 2014 Phase 2 Submission Deadline ( Detailed Data ) June 1 June Public Disclosure Date September 30, 2014 Beyond Data Collection Cycle January 1 to December 31

6 Open Payments Overview - Applicable Manufacturer 6 1. U.S. Operation Located in the U.S. Foreign Companies that do any business within U.S. 2. Produce a Covered Product Engage in the production, preparation, propagation, compounding, or conversion of at least one covered drug, device, biologic, or medical supply Includes distributors, repackagers, relabelers, kit assemblers and wholesalers that hold title to a covered product Common Ownership Entities under common ownership with an Applicable Manufacturer (1 & 2) that provides assistance or support for the above or marketing, promotion, sale, or distribution of a Covered product

7 Open Payments Overview Covered Product 7 1. Reimbursable Directly or as part of a service under Medicare, Medicaid, or CHIP 2. In the case of drugs or biologicals By law, requires a prescription to be dispensed 3. In the case of medical devices Requires premarket approval by or premarket notification to the FDA Includes devices that are subject to investigation device exception (IDE)

8 8 Open Payments Overview Covered Recipient Physicians Follows SSA Definition Doctor of Medicine Doctor of Osteopathy Doctor of Dentistry Doctor of Dental Surgery Does not include bona fide employee Teaching Hospitals Doctor of Podiatry Doctor of Optometry Doctor of Chiropractic Medicine Regs: Any institution receiving Indirect Medical Education payments or Graduate Medical Education payments CMS published comprehensive list Note: Some state analogues cover any individual licensed to prescribe products or services in their respective state (e.g., Massachusetts and Vermont)

9 9 Open Payments Overview Transfers of Value Payments or other transfers of value Generally, anything of value provided to a covered recipient is reportable, unless expressly excluded A broad range of direct and indirect cash and in-kind items/services (natures of payment categories) above $10 per transaction or $100 aggregate Consulting fee Compensation serving as faculty or as a speaker Honoraria Gift Food and beverage Entertainment Travel and lodging Education Research Charitable Contribution Royalty or license; Grant Space rental or facility fees Ownership or investment interest

10 10 Penalties Failure to report timely, accurate, complete reports Up to $10k for each record Not to exceed $150k annually Knowing failure to report timely, accurate, complete reports Up to $100k for each record Not to exceed $1m annually Records Retention 5 years! AM s may be audited at any time for compliance State law enforcement VT: Already begun fining manufacturers for reporting non-compliance

11 CHALLENGES WITH COMPLIANCE 11

12 12 Who Must Report Business Partners Distributors, Repackagers, Relabelers, Kit Assemblers Etc. AM if hold title to Covered Products A distributor holds title to products once it Takes ownership of a particular inventory of products from the seller, and Possesses the right to re-sell the inventory of the products that it has purchased (CMS FAQ 8151) Contract Manufacturers Exempt from AM definition if only manufacturing raw materials/components and not under common ownership with AM AM if contracted to manufactured Covered Products Required to report TOV related to the Covered Product Critical: Covered Product and Hold Title analysis

13 13 Who Must Report Common Ownership AM s Under Common Ownership Common Ownership + Necessary or Integral Assistance Common Ownership defined as 5% or more direct or indirect total ownership interest Definition of Necessary or Integral Assistance? Example 1: Entities that produce active ingredients used to develop Covered Products (CMS FAQ 8990) Example 2: Entities that lease devices to an AM that could not otherwise produce one of its products Challenges Identifying all entities under common ownership Necessary or Integral Assistance analysis in light of new guidance

14 14 What Must Be Reported? Evolving guidance for current exceptions Evaluation and Demonstration Units: 90-day Rule Period begins when device is provided to Covered Recipient For single-use/disposable: quantity of items expected to be used in 90-days Applies on a per-covered Recipient basis Indirect Transfers of Value: Instructs or Directs + Aware AMs must report payments made through distributors, even if from distributors resources. (CMS FAQ 8976) AMs must report payments made through intermediates e.g., fellowships and specialty societies. (CMS FAQ 8372) (CMS FAQ 9004) Miscellaneous Study equipment, implantable devices, instrumentation, or other supplies provided to a covered recipient in connection with a FDA approved clinical trial is considered a transfer of value. (CMS FAQ 8264) Debt forgiveness for Covered Product Free repairs not included in warranty Challenges Develop standardized definitions for exempt activities e.g., unaware activities. Reporting non-exempt transactions: Nature, Value, Supporting Documentation

15 15 Physician-Owned Entities ( POEs ) OIG Special Fraud Alert Definition of POE Longstanding concern with questionable features Concludes that POEs are inherently suspect Challenges POEs as AMs Distributors GPOs Common Ownership Open Payments Potential Enforcement Impact Opportunity to pinpoint POEs Exposure of traditional AM distribution/purchase agreements

16 16 Third-Party Vendor Data Quality Capture and Maintenance of Quality Data is Critical Regulatory penalties Increased HCP disputes Ortho frequently relies on vendors for distribution and development of products Challenges Third Party Vendor data capture and reporting capability Sales, marketing distribution CROs, CMOs etc. Relying on foreign vendors engaging US HCPs Improving process and oversight of Third-Party Vendor data receipt

17 17 Physician Data Disputes HCP Community: Likely gap in conceptual understanding of Open Payments Results in differing expectations of reportable transactions, value etc. Disputed data that is not resolved is still published Appears to be a material issue for ortho Recent study analyzed COI disclosures by HCPs and voluntary manufacturer disclosures from NASS annual meeting Found discrepancies in almost 50% of disclosures provided by HCPs and the manufacturer Challenges Study could predict significant gap in HCP-industry expectations of reportable data and value Short term: may lead to heavy volume of data disputes Long term: HCPs may refuse certain transactions How to reduce or manage disputes?

18 18 KEY STRATEGIES FOR ENHANCING COMPLIANCE

19 19 Assumptions Document & Pre-Submission Checklist Assumptions Document CMS allows AMs to submit an assumptions document Not available to public, but may be used by other agencies as part of investigations Added Value of Assumptions Document Useful exercise for designing and improving reporting Uncover areas for improvement or deeper analysis Requires AMs to record critical standard definitions, value attributed to service fees and items provided (e.g., loaners ) Record activities determined to be reportable (with Nature category) and exempt (e.g., unaware activities ) Pre-Submission Checklist Attestor Methodology Review/Work Instruction Stakeholder Certifications E.g., Related to Covered Products analysis. Indicate responsible department and certify completion

20 20 Data Monitoring & Trending Open Payments data can be leveraged to provide valuable compliance and business insights Examples Monitor transactions limited by AdvaMed and states (e.g., MA and VT) Review KOL relationships Flag off-label specialties Third party vendor payment monitoring compliance with regulatory guidance and contractual terms Data Sources Aggregated Data Data Analytics Monitoring Report

21 21 Compliance Processes Governing Interactions with HCPs Disclosure of data gives government unprecedented insight into Industry- HCP interactions CMS not specific on how data will be used Likely to be several monitored Nature of Payment categories E.g., Gifts, entertainment, high-dollar consulting relationships Ensure compliance controls align with government and industry guidance Adoption of AdvaMed Code policies Meals, and Business Meetings with HCPs Gifts and entertainment Product Training and Education Grants etc. Be able to demonstrate bona fide KOL relationships Business need for KOL services Selected KOL qualifications align with need KOL is paid at FMV KOL has performed service

22 22 Dispute Resolution Process with HCP Customers Disputes may be an on-going issue for some AMs regardless of reporting process sophistication CMS will allow Covered Recipients to review data probably through a portal CMS will publish disputed data that is unresolved within 60 day review, dispute and correction period (marked as disputed ) Enhanced Dispute Resolution Process Customer Education Many AMs are considering allowing Covered Recipients to review data prior to submission or review period Some limit scope of Covered Recipients permitted to review pre-submitted data Roles and responsibilities Track and analyze disputes Who are we getting them from? What activities? Improve dispute process, PR and/or reporting process

23 GLOBAL TRANSPARENCY 23

24 24 Global Transparency Requirements Laws and Regulations France Active reporting requirements! Website launched register and disclose Covered Recipients much broader than Open Payments! Netherlands Coming soon Reporting interactions relevant to the patient Industry Codes Japan (JFMDA) Website disclosure R&D, Academic Support, Authorship Fees, Speaker Fees Australia (MTAA) Website disclosure "Promotions and activities"

25 CONCLUSION AND QUESTIONS 25

26 Additional Information Available in BoneZone 26 BoneZone Article Sunshine Act and Beyond: Improving Compliance This article provides an overview of current challenges and key strategies for enhancing compliance with Open Payments and other implicated regulations governing interactions with HCPs. See Vahan to receive a complimentary copy of the complete article.

27 Questions for Today s Presenter? 27 Vahan Minassian, J.D., Manager, Compliance & Ethics Vahan is a licensed attorney with experience advising pharmaceutical and medical device manufacturers on legal and operational issues related to the Physician Payment Sunshine Act and state aggregate spend laws, lobbying disclosure laws, the Anti-Kickback Statute, the False Claims Act, off-label promotion, the Foreign Corrupt Practices Act and the U.K. Anti-Bribery Act of vahanminassian@cis-partners.com Phone: cis-partners.com info@cis-partners.com PharmaComplianceBlog.com