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July 22 -- Drug and device manufacturers and group purchasing organizations that fail to validate the accuracy of their spending data prior to submitting it to the Centers for Medicare & Medicaid Services' Open Payments program are courting potential fines and reputational risks, according to a speaker at July 22 webinar.
The CMS can audit data submissions to the Open Payments program at any time, Jeff Fisher, a manager with Huron Life Sciences, said during the webinar, and civil monetary penalties (CMPs) for failing to report data in an accurate and timely fashion can range from $1,000 to $10,000 per transaction.
CMPs for knowing failures to report data in an accurate and timely fashion can range from $10,000 to $100,000 per transaction, Fisher said.
The Open Payments program, also known as the Sunshine Act, requires manufacturers of drugs, devices and other medical supplies and group purchasing organizations to report certain payments to physicians or teaching hospitals.
Huron Life Sciences is a unit of Huron Consulting, which is based in Chicago.
In addition to the threat of CMPs, submitted spending data can also be accessed by the Department of Justice, the Department of Health and Human Services Office of Inspector General and the Securities and Exchange Commission, Fisher said, increasing the risk that inaccurate submissions may prompt government investigations.
The lack of validated Open Payments submissions can lead to the appearance of kickbacks, reputational damage and the appearance of inappropriate interactions with health-care providers, Fisher said.
Under the program, payment data for the past five months of 2013 were due to the CMS June 30, and the data will be available to the public no later than Sept. 30.
Fisher said that data submission errors can stem from problems in three related areas: the source system, the customer master file and the Open Payments template itself.
Source systems are used by companies to collect their aggregate spending data, and can occasionally fail to extract full payment data, he said.
For example, a source system might classify a physician as a business guest and not extract any payment data surrounding the transaction.
Additionally, source systems often fail to extract all reportable payment data and sometimes capture data inaccurately, Fisher said.
As for the customer master file, data accuracy is only a good as what's in the file, he said.
Common errors include misidentifying physicians and the absence of key identifiers, such as a National Provider Identifier or a state license number.
Also, the very act of entering spending data into the Open Payments template can introduce error, Fisher said, due to a failure to fill in all required fields.
To eliminate the risk of CMPs and reduce data submission errors, Fisher said companies should engage in a four-step data validation process, beginning by analyzing source system data and validating that the data are accurate.
As a second step, companies should identify the root cause for any spending data errors and create procedures to correct them. Once errors have been identified and new procedures created, a third step should involve implementing the new procedures, Fisher said.
Finally, companies should focus on employee education, ensuring that employees are cognizant of the root causes behind spending data errors and aware of the potential consequences for inaccurate data submissions.
Looking to the future, Fisher said that data analytics surrounding Open Payments submissions is becoming increasingly sought after.
Data analytics can result in internal data certification, validation and monitoring, operational insights and risk analysis, he said.
To facilitate proper data analytics, payment data must be kept in one place and updated frequently, Fisher said.
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More information about Open Payments is at http://www.cms.gov/Regulations-and-Guidance/Legislation/National-Physician-Payment-Transparency-Program/index.html.
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