Started in 2013, the Physician Payments Sunshine Act is a provision of the Affordable Care Act, designed to inform the public about the financial transactions between healthcare companies and physicians, doctors, and hospitals. Over the past seven years, the data collection and data publication system has shown payments of almost $77 billion — highlighting the financial relationships between medical vendors and medical professionals.
With the goal of transparency and the deterrence of conflict of interest, the act has been hailed as a success, albeit with extra steps and compliance issues faced by relevant companies. As part of this act, medical device companies, pharmaceutical manufacturers, and group purchasing organizations (GPOs) — known as reporting entities — are required by law to report payments to physicians, teaching hospitals, and numerous other healthcare-related covered recipients. To record these payments, entities use an open payments program, known as CMS Open Payments.
Like many other government programs, the language of the act and the process can feel somewhat daunting. However, understanding the CMS Open Payments system and how to effectively and efficiently send and report payments can save you time and a headache. Let’s look at how it all works.
CMS Open Payments is a public disclosure program managed by the Centers for Medicare & Medicaid Services (CMS) that implements the Sunshine Act. Each required company submits reports of payments, transfers of value, and ownership interests to the CMS Open Payments system to comply with the law. The duty of CMS Open Payments is to collect data on the flow of money between medical manufacturers and healthcare providers, as well as teaching hospitals.
Once the data is collected for a calendar year, the CMS reports the data on its website — on or before June 30 of each year. The CMS also updates the Open Payments database for the program year each January to ensure maximum transparency for the general public.
As defined in the Sunshine Act, every “reporting entity” is required by law to report payments to any covered recipients. Reporting entities, or those who give money or gifts to covered recipients, refer to several different organizations and individuals, including:
Covered recipients, or those receiving any payments, include:
The nature of payments is reported to CMS Open Payments across three major categories:
More specifically, any transfer of wealth should be reported to the CMS. In this regard, reporting entities should always err on the side of caution. Knowingly failing to report payments can result in a fine of up to $1.176 million, while unknowingly failing to report may result in a fine of $176,000.
Due to the financial harm a lack of reporting can cause, consider these specific situations that require reporting:
A silver lining is that you cannot “over-report” in a general sense. However, reporting unnecessary expenses can result in lengthy dispute periods or hiccups in the dispute process.
For additional information, refer to the CMS Open Payments general resources page.
CMS Open Payments reporting isn’t difficult, provided you keep accurate records throughout the year. Every reporting entity must track payments from the calendar year beginning on January 1 and ending on December 31; this is also known as the data collection period.
The submission period for reporting entities starts February 1 and ends March 31. This gives each reporting entity three months to review its payment records and present accurate data to the CMS Open Payments system.
Once a reporting entity is ready to report its data to the CMS, the process is relatively straightforward:
Once you complete the process, you should receive an electronic receipt in your email. You shouldn’t receive any communication from the CMS, but covered recipients can contact you during the “pre-publication review” period. This 45-day period from April 1 to May 15 allows recipients to review any informational or transactional inaccuracies with reporting entities directly, avoiding the CMS acting as a middleman.
The CMS makes reporting relatively easy, but roadblocks and other issues can hinder an otherwise straightforward reporting system. To avoid fines or issues with covered recipients, companies need to be aware of some of the challenges with Open Payments reporting.
Gathering payment information from multiple departments — or even third parties such as research institutes and foundations — can make CMS Open Payments tracking cumbersome. The context of the payment is also important. Without proper context, the payment can appear like a conflict of interest at worst and non-transparent at best.
Under-reporting is a common problem that entities face, but due to the financial and reputational damage, it’s something that every company should avoid at all costs. Due to the vast reconciliatory and data collection processes, this is often an arduous process.
While not nearly as damaging, over-reporting is a major concern for reporting entities. Over-reporting can impact public perception, damage relationships with teaching hospitals and physicians, and create audit complications.
Poor reporting practices can lead to a variety of problems within an organization, namely, covered recipient disputes. When these disputes happen, several problems arise with respect to reputation, compliance, data inaccuracies, and administrative burdens.
The aforementioned CMS Open Payments challenges highlight why controls, training, and policy are essential for any company affected by the Sunshine Act. If you’ve had problems in the past or you want to enhance your current data collection and reporting, these tips should provide helpful insight.
Writing checks, sending EFTs, or wiring are all sound ways to send gifts or money to covered recipients — in theory, at least. But when you send money this way, someone in your company has to take all the relevant records manually. Even the most reliable administrative worker can miss a payment or enter numbers incorrectly from time to time.
That’s what makes Hoppier an alluring alternative to traditional payment methods and accurate CMS Open Payments reporting. Hoppier uses digital VISA cards to send payments to your recipients, but so much more. As the top Sunshine Act Compliance Software in the healthcare industry, Hoppier allows you to:
Creating a Hoppier account for CMS Open Payments is easy, even for the novice administrator in your office. To start, name your program something that references its purpose, such as “CMS Open Payments” or something similar. After you choose a name, add your company colors and logo to reinforce your brand to any covered recipient.
Afterward, you can select a denomination for each gift card and an expiration date (if you so choose). From there, select from thousands of vendors for complete control over where the money is spent, specifically if you’re paying them for food, entertainment, travel, or another specific purpose. You can also leave it open-ended and allow your recipient to spend the money as they see fit.
Once you’ve completed these steps, upload a CSV or manually enter your recipients’ email addresses, and you’re ready to send the gift card. Plus, any unused balance left on the card at expiration goes straight back into your account, funding any future payments you might make.
Finally — and possibly most importantly concerning CMS Open Payments — Hoppier tracks all your gift card purchases and spending. When the time comes to report (remember, it’s between February 1 and March 31), export the data. Log into your CMS Enterprise account, use the Hoppier file, and you’re done — complete with tracking and an audit trail for compliance.
Though you can automate part of the CMS reporting process, you still need a staff that’s aware and knowledgeable about the process. Train key members of your staff on reporting processes, and make them aware of the penalties for non-compliance — $1 million or more fines.
Companies should also keep long-time staff aware of the more complex issues regarding CMS Open Payments. This might include payment reporting thresholds, types of payments that need to be reported, and reporting exclusions (product samples, discounts, etc.)
Regularly test your staff’s knowledge and occasionally conduct surprise audits to ensure your team follows protocol and procedure.
Payment disputes are one of the most crucial elements of the CMS Open Payments system. When a payment is disputed by the recipient, it can get flagged in the CMS system, leading to question marks from potential clients or the general public.
In most cases, these disputes are the result of a clerical error or a misunderstanding. As such, keep open lines of communication with your recipients, follow up regularly, and timely answer questions and concerns.
The CMS Open Payments Program initiative is dynamic. Reimbursements, rulemaking, reporting, and the physician fee schedule are constantly changing. The only way to ensure you’re compliant with the law is to consistently follow up with any changes to the program.
Thankfully, the CMS Open Payments website — openpaymentsdata.cms.gov — is a proverbial treasure trove of information that’s constantly updated. Ensure your reporting team knows the law, keep your staff informed, and open payments should become an everyday part of your business operations.
Ready to 2x your global engagement at your next event, with Ox stress?
Make Hoppier your unfair advantage today, schedule a demo
Ready to 2x your global engagement at your next event, with Ox stress?
Make Hoppier your unfair advantage today, schedule a demo
Ready to 2x your global engagement at your next event, with Ox stress?
Make Hoppier your unfair advantage today, schedule a demo
Ready to 2x your global engagement at your next event, with Ox stress?
Make Hoppier your unfair advantage today, schedule a demo
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