Meeting increased reporting requirements

By Zach Henderson

In the face of existing legislation that varies by state, pharmaceutical, biotech and medical device companies are required to provide aggregate spend reporting of their promotional, grant and consulting spend per practitioner and/or per facility.

The challenges of meeting these requirements certainly are complex, especially now that we have “let the sunshine in” across all 50 states as part of healthcare reform. Not only did this add a layer of complexity to the existing laws from multiple states and the District of Columbia, but it also extended scope with the inclusion of medical device manufacturers. We find many clients are facing several common challenges which are the most difficult to solve and often have broader implications beyond the compliance office.

Lack of a customer master: At the core of many operational and compliance challenges rests the HCP/HCO customer master. Part of the issue is definitional: a customer master for compliance purposes is not simply a list of called-on doctors, nor a list of prescribers’ marketing targets. It refers to all healthcare professionals (even those non-prescribers) and healthcare organizations. Not typically handled in the normal course of the commercial enterprise, this broader requirement forces collection, distributing and reporting of spend on ancillary professionals, such as office managers, front desk staff, etc.

To address this issue, we typically create and maintain auxiliary master files used within our compliance solutions. Also, the creation of an enterprise customer master is not possible given the many touch points and time required to fully implement enterprise MDM. Because of this, we frequently help our clients create a compliance-centric master file that includes the necessary HCPs and HCOs. This approach meets the clients’ compliance requirements, and importantly, provides a starting point for a broader deployment of an MDM solution, quite valuable beyond compliance.

Lack of a secondary process to reconcile unmatched spend records: The best customer master files in the industry do not allow 100 percent match rates for incoming expense records. Therefore, to be fully compliant, clients require a secondary process that enables them or their provider to do more advanced matching than that which typically occurs in aggregate spend software solutions (we would term the function “linking” as the software is able to link identifiers within the data mart of the software to the same identifiers on the incoming record; this is markedly different from “matching”, which is an algorithmic and/or probabalistic exercise whereby multiple data attributes from both the customer master and the incoming expense record are compared and the best HCP/HCO “match” is determined).

This process can simply be sending an exception file at the end of the day to a data matching vendor and receiving the matched results back the next day for import into the aggregate spend system. Regardless of the approach, establishing an automated process for this is critical as the manufacturer cannot rely on the data management capabilities of a vast number of vendors feeding their aggregate spend system. Beyond this automated matching, a manufacturer should also invest in a manual matching process and a resubmission process with their spend vendors should records ultimately be unmatched.

Buyer beware:There are numerous solutions (comprised of components such as aggregate spend software, customer master, HCP/HCO matching, full and partial MDM) available in the marketplace and many possess seemingly the same processes and features. It often becomes overwhelming and we have seen clients choose solutions purporting to have holistic capabilities only to be disappointed during the implementation.

Do more than check the box during the evaluation phase, as our experience suggests clients end up investing significant unplanned dollars and time to truly meet the compliance requirements. This is one reason why we published an ebook on our website that provides clients guidance on evaluating and selecting a solution provider to address the complete aggregate spend challenge (i.e. not just the software). It outlines the myriad areas to investigate and many of the questions that should be asked in an RFI/RFP.

As the laws continue to evolve, as does the interpretation of them, we as an industry can only expect more complexity, not less. To this end, choosing approaches with the highest degree of flexibility is crucial to long-term success.

Biography

Zach Henderson joined Health Market Science (HMS) in 2007, initially as Vice President of Marketing and Product Development, where he successfully expanded the company’s portfolio of offerings, launching 12 products in two years. Today as Vice President, Corporate Strategy and Analytics, he leads the creation of HMS's strategic plan, M&A, strategic alliance building, and leads the company's advanced analytics business unit.