Accurately Tracking Expenses Under the Physician Payments Sunshine Act (PPSA)
Is your company responsible for complying with the Sunshine Act? When it comes to business expense tracking, certain industries are known for having more rigorous regulations than others–with healthcare, including bio and pharma, being one of the most stringent.
The strict Sunshine Act reporting and documentation requirements in the healthcare industry are in place to ensure patients are put first and monetary gain does not cloud the judgement of physicians.
You may not realize it, but billions of dollars are spent annually on physician-industry relationships. In fact, 2018 data from the Centers for Medicare and Medicaid Services highlights that $9.35B was recorded in payments and ownership and investment interests to physicians and teaching hospitals. These fall under the categories of general payments (transfers of value not related to research), research payments, and physician ownership information.
The money that flows into the healthcare industry is carefully monitored by the federal government, and as you are likely aware, data surrounding physician-industry relationship expenses must be tracked and reported in a very specific way.
Fortunately, with a well-informed finance department and expense management software in place that is user friendly and has reporting policies directly built into the tool, ensuring accuracy and compliance with expense regulations is far easier than ever before. In this post we’ll review how legislation has shaped industry requirements for business expense management and the benefits of modern business expense software.
Physician-Industry Relationships Catalyzes Legislation
In 2009, a national survey published in JAMA Internal Medicine sought to understand conflicts of interest related to physician-industry relationships, or PIRs. The study found that approximately 84% of physicians had some type of monetary interaction with the manufacturers of pharmaceuticals, biologicals, medical devices and supplies. While the majority of the financial benefits were in the form of meals, others received compensation or reimbursement for attending events or for continuing medical education.
Spurred by the concern that PIRs were impacting and creating conflicts of interest and even sacrificing the best interest of patients, the Physician Payments Sunshine Act (PPSA) was enacted as part of the Affordable Care Act of 2010.
The PPSA requires manufacturers of medical products to disclose to the Centers of Medicare and Medicaid Services (CMS) payments or other transfers of value made to doctors or teaching hospitals. As highlighted by Health Affairs, “It also requires certain manufacturers and group purchasing organizations (GPOs) to disclose any physician ownership or investment interests held in those companies.”
The American Medical Association in Medical Economics explains that the Sunshine Act helps to ensure that physicians’ interactions with the pharma industry are transparent and focused on benefits to patients. AMA President, Jeremy Lazarus notes that the goal during the rulemaking process was to provide a clear picture of physician-industry interactions and give doctors an easy way to correct inaccuracies.
Sunshine Act Reporting Accuracy is Essential
Under PPSA, drug and medical device suppliers must track specific expenses related to transfers of value or payments to doctors and hospitals in excess of $100. These expenses must be reported to the federal government in a specific way, and are available publicly.
“You should know when your doctor has a financial relationship with the companies that manufacture or supply the medicines or medical devices you may need,” said Peter Budetti, M.D. CMS deputy administrator for Program Integrity. “Disclosure of these relationships allows patients to have more informed discussions with their doctors.”
The required Sunshine Act reporting must include payment information, investment interests, ownership, and transfers of value made to physicians and teaching hospitals. So what exactly needs to be tracked? Well, in short — just about everything:
- Meals and Food
- Business Gifts
- Consulting Billables
- Travel Expenses
- Speaker Compensation
To complicate matters even more, every employee must accurately report each expense–nothing can be missed without risking severe repercussions. If your organization is not using a modern business expense app that supports on-the-go spend tracking and automated reporting, chances are that your finance team is constantly stressed over the risk of human error.
A Modern Expense App is Crucial for Sunshine Act Compliance
Expense software provides an avenue for both your employees and your accounting department to ensure accuracy and compliance under the Sunshine Act. Be sure to seek a solution that provides a user-friendly experience while also providing a streamlined approach to tracking and reporting expense data for finance teams. Thankfully, business expense apps are available to the healthcare industry to ensure transparency and regulatory certainty.
With TravelBank’s expense management platform, your employees will be able to snap photos of receipts and have them sync directly back into your expense app. You are also able to program PPSA-compliant billing categories directly into your expense management instance. This will be a game-changer for your finance team as it will save time and money.
If your company is ready to implement an expense management solution that provides a user-friendly experience for employees while streamlining processes for the finance team, TravelBank can help. Chat with our team to learn more today.