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Aggregate Spend and the Federal Sunshine Act: Topic at Seton Hall Law Healthcare Compliance Certification Program
June 13, 2011
“The Federal Sunshine Act: Don’t Get Burned by the Sun” is the title of a presentation by Elizabeth H. Kim at Seton Hall Law Healthcare Compliance Certification Program on June 13. Ms. Kim, Manager, Regulatory and Compliance Services, Porzio Pharmaceutical Services, began her presentation by reminding the audience that they only have 201 days until January 1, 2012, the date that expense tracking for aggregate spend reporting becomes mandatory by the federal government. She added that drug and device companies are increasingly nervous because the implementing regulations have not been released, yet they are expected to have fully operational aggregate spend compliance solutions in place by that date.
The Sunshine Act is the informal title of the sections of the Patient Protection and Affordable Care Act, also known as Obama Care, that deal with the relationship of pharmaceutical, medical device and biologics companies, and healthcare practitioners with regard to controls around “gifts and payments to physicians and teaching hospitals.”
Beginning January 1, 2012, Ms. Kim explains, companies must be in full compliance to track and monitor expenditures, with the first report due to the Secretary of Health and Human Services on March 31, 2013.
Companies are scrambling to identify, contract for and implement aggregate spend compliance systems to capture and combine all relevant expenses. In addition to the federal regulations, Ms. Kim explains, companies are grappling with state laws that in many instances survive the federal law due to the weak preemption language. Because payments can arise from any number of departments within a company and be subject to a barrage of laws and regulations, the burden of tracking expenses can be onerous to the company, Ms. Kim indicates.
She explains, a company needs to determine the source of its data stream, identify where all the relevant data exists within the company, ensure that data is captured in an aggregate spend system and provided to appropriate personnel as requested. Ms. Kim continues, the company must identify any gaps in capture and documentation. What further complicates the capture is that laws are ambiguous and applications often unclear.
Porzio Pharmaceutical Services offers Porzio AggregateSpendID, a proprietary system that enables companies to fully comply with the laws and regulations. It is supported by Porzio Compliance Digest that is a real-time subscription-based compendium of both the federal laws and the laws of all 50 states and the District of Columbia. As the laws and rules are enacted and amended, they are posted on the database. The aggregate spend compliance system is updated accordingly.
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