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Aggregate Spend Pre-Disclosure, Certification, and Disputes Management Survey Results April 3 , 2014. Introduction. Today’s Speakers. LEANNE DIDOMENICO I Philadelphia, PA Manager with 13 years of experience working with global life sciences companies - PowerPoint PPT PresentationTRANSCRIPT
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Aggregate Spend Pre-Disclosure, Certification, and Disputes Management Survey Results
April 3, 2014
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Introduction
Today’s Speakers
JOSEPH MORRELL I Washington DC
• Manager with 10 years of experience working with global life sciences companies
• Current focus is working with pharmaceutical and medical device clients to identify and address compliance issues related to state and federal aggregate spend
reporting, off-label monitoring, & government-mandated needs assessments
• Recent accomplishments include assisting a top 5 global manufacturer with operational issues related to clinical data transparency; including implementing systems and
processes to create greater efficiencies across the organization
LEANNE DIDOMENICO I Philadelphia, PA
• Manager with 13 years of experience working with global life sciences companies
• Current focus is assisting companies to address behavioral change across their organization and the supporting tactics needed to make a business transformation
successful, including a special focus on transformation required from regulations and compliance driven initiatives
• Recent accomplishments include developing and executing a comprehensive change management strategy for a global pharmaceutical company with several affiliate
businesses; aligned businesses, vendors and employees to a single process for accurate spend data capture; included development of a disciplinary model
Agenda
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SURVEY OVERVIEW & METHODOLOGY
Today, we hope to provide insights into Huron’s 2014 Aggregate Spend Pre-Disclosure, Certification, and HCP Dispute Survey.
Specifically, the agenda is comprised of the following:
INTERNAL CERTIFICATIONS
PRE-DISCLOSURE PRACTICES
PREPARING FOR INQUIRIES & DISPUTES
CLOSING REMARKS: Long Term Strategies To
Mitigate Risk And Improve Operations
REPORTING OPERATIONS
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Why Survey Now?
Benchmarking Drivers:• #1 factor was to respond to client demand; through our own experience
working with clients we were seeing common struggles and themes• Our intent was to provide real insights and data to support our clients
when they make decisions across the industry as they prepare for Open Payments disclosure
• Our goal is to continue to provide “quick” benchmarking as a service
Survey Overview and Methodology
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Survey Overview and Methodology
• Huron Life Sciences surveyed 38 life science companies in the first quarter of 2014.
• We asked respondents to answer questions about their aggregate spend program across five primary areas: – Company Revenue / Industry
– Reporting Operations: Organization, Personnel, Expected Volume
– Internal Certification: Frequency and Methodology
– Pre-Disclosure
– Dispute Readiness: System, Process, and Sales Involvement
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Survey Overview and Methodology
• Responses were received from 38 companies; respondents crossed both pharmaceutical and medical device manufacturers and were of a variety of sizes:
26%
13%
29%
32%
What Size is Your Company (Revenue)?
Small: <$1B Small-Medium: <$2BMedium: $2B - $10B Large: >$10B
68%
32%
Is Your Company a Manufacturer of Branded or Generic Products?
Branded Both
53%
3%
13%
32%
Is Your Company A Pharmaceu-tical, Med. Device Manufacturer
or Both?
Pharmaceutical Other Medical DeviceBoth
Discussion of Detailed Results
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Detailed Results: Reporting Operations
• The number of Covered Recipients (CRs) each company expects to report on increases dramatically with company size.
25%
31%
22%
6%
6%
11%
How many covered recipients (healthcare profes-sionals, teaching hospitals, etc.) do you estimate
reporting spend for annually?
1 - 5,0005,000 - 20,00020,000 - 50,00050,000 - 100,000100,000 - 150,000Over 150,000
Annual Revenue Approximate Average Number of CRs
<$1B 9,000
$1-2B 34,000
$2-10B 22,500
>$10B >100,000
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Detailed Results: Reporting Operations
• The number of employees dedicated to reporting increases with size.• There is a great deal of variation within each size group and no direct
correlation with expected number of covered recipients.
Small Small - Medium Medium Large0
5
10
15
20
25
30
35
40
45Average: 6
Average: 9
Average: 11 Average: 23
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Detailed Results: Reporting Operations
• Responsibility for transparency reporting continues to typically reside with Compliance:
78%
11%
3%8%
Under what department is the collection and reporting of aggregate spend (Open Payments) organized?
ComplianceFinanceSales OperationsOther
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Detailed Results: Internal Certification
• 73% of respondents indicated that business units outside of the core aggregate spend function will review data prior to reporting. Of those conducting an internal review, only 5 (out of 22) were required to do so by CIA obligations.
27%
17%37%
20%
Do business units outside of the core aggregate spend function (e.g. sales, marketing, clinical/R&D, etc.) review aggregate spend information prior to
Compliance review?
No
Yes, Once Per Year
Yes, Once Per Quarter
Yes, On Another Frequency
Yes: 73%
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Considerations: Internal Certification
• When setting up a program for internal certifications, companies need to consider:
If employees from the core reporting functions will be assigned to be “relationship owners” with certain business areas.
Whether or not a live review will be conducted with senior business leadership.
The scope of transactions that will be reviewed (e.g. if T&E transactions have already been reviewed by line management, do they need to be re-reviewed?)
Dashboard-style trend reporting that may be useful for senior leadership.
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Detailed Results: Internal Certification
• Four out of five respondents rely on a manual process to complete their internal certification.
• Typically, only one level of review is completed. Over 40% of respondents complete at least a second level of review beyond that.
81%
4% 15%
How is this review conducted?
ManuallySeparate ToolAggregate spend solution automatically routes transactions for review
59%
38%
3%
How many levels of review are transactions subject to outside of the core aggregate spend team prior to
Compliance review?
One Two Three
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Detailed Results: Pre-Disclosure Practices
• Only 30% of respondents currently have firm plans to pre-disclose transparency data; another third have plans not to pre-disclose, and the remainder are still undecided.
36%
33%
12%
18%
Are you pre-disclosing transactions to covered recipients prior to CMS submission, and, if so, how frequently?
No plans to pre-disclose
Have not decided
Pre-disclose every quarter to all recipients
Pre-disclose twice annually to select recipients
Plan to Pre-disclose: 30%
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Considerations: Pre-Disclosure Practices
• For those companies undecided on their approach to pre-disclosure, consider…
Would business or R&D functions support a limited pre-disclosure to customers with a higher volume of transactions, or total transactions over a certain dollar amount?
Will pre-disclosure potentially reduce the workload on your team during the CMS inquiry and dispute period?
How will the company respond to requests that may be received from teaching hospitals for a comprehensive pre-disclosure report?
• The additional time now available before the line-item report is due to CMS may offer your company an opportunity to “pressure test” its dispute systems and processes prior to the formal CMS dispute window.
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Detailed Results: Preparing for Inquiries & Disputes
• Only 12% of respondents have fully implemented a technological solution for managing HCP inquiries and disputes
• However, around half of all respondents have a documented process in place
Acquired & undergoing implementation
21%
Developed & undergo-ing implementation
35%Acquired & im-
plemented6%
Developed & im-plemented
6%
Not applicable32%
The dispute management system/solution your company uses is:
45%55%
Do you currently have policies and procedures in place to manage disputes and inquiries?
YesNo
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Considerations: Preparing for Inquiries & Disputes
• When preparing for inquiries & disputes, consider… Have all potential sources of inquiries (call centers, adverse event reporting
area, sales representative help desk) been identified? Are they equipped to at least document inquiries or disputes that may come in outside of the CMS framework? Where will incoming calls from the media, lawyers, the public, and other sources be routed to?
Have FAQs or key talking points been developed and approved? Should HCPs that dispute a transaction this year automatically be added to
your company’s pre-disclosure list for next year? How can you track and identify potential “dispute themes” (research related,
regional, etc.)? How will the company manage inquiries for transactions that may not have
detailed documentation (educational items, meals, etc.)?
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Detailed Results: Preparing for Inquiries & Disputes
• Respondents have typically allocated one or two resources to manage HCP inquiries & disputes and typically expect less than 5% of transactions to be disputed.
Small Small - Medium Medium Large0
1
2
3
4
5How many dedicated individuals have you assigned for potential disputes?
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Detailed Results: Preparing for Inquiries & Disputes
• Most respondents have indicated they expect relatively little involvement from the sales force in resolving HCP disputes.
3%
38%
59%
How much sales team interaction do you anticipate in the inquiry and dispute process?
High: sales team manages all research and commu-nication related to dis-putesMedium: sales team assists in difficult situations or those involving key ac-counts
Low: sales team has limited involvement, may occa-sionally provide supporting information related to a dispute
Long Term Strategies To
Mitigate Risk & Improve Operations
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Steps You Can Take Today - Assess High Risk Areas
• Aggregate spend data, combined with other internal data sources, can help identify areas of risk across different parts of
your company’s operations, for example:
Risk Area Metric
Promotional Speaker Programs
Meals Above Per HCP Meal Limit (Per Program)Unapproved Attendees (Per Program)
HCP Payment Cap Violation (Per Speaker)
HCP Consultant Arrangements (Exclusive of Promotional Speaker Programs)
Expense Submission Violation Per HCP (e.g., exceeding contract terms, meal limit, etc.) - Via Third Party Using Purchase Orders or Check RequestHCP Not Contracted Prior to Start of Meeting or Engagement
Failure to Submit Reconciliation/Meeting End Document
Sampling Inventories Reported as IrreconcilableField Audits Reported as IrreconcilableSignature Audit Cases Based on Negative Responses
T&E (All Interactions with HCPs)
Out of Office Meals in Violation of Policy (Exclusive of Meal Limit Violations)Inappropriate Activities with an HCP (e.g., entertainment)
Sampling Reports
Implement Monitoring Tools For Real Time Risk Tracking
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Meals Above per HCP Meal Limit HCP Not Contracted Prior to Services
Irreconcilable Sampling Inventories Inappropriate HCP Spend (e.g., entertainment)
Expense Report Data
Date Services Provided
vs. Contract Signature
Date
Expense Report Data vs.
HCP Meal Limits
δ
HCP Spend ($) Policy Limit ($)
“Rep A reported over
HCP meal limit ($7)”
Signed Before
Signed After
Signed After
Signed After
Signed After
Timeliness
Track Sampling Outliers Company Source
Company Source
Company Source
Company Source
Spending Patterns
Entertainment
Travel Grants
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Leveraging Open Payments Data to Add ValueBuilding Sustainable Compliance Operations
How can your team leverage available data to bring value to the rest of the company?• With Procurement: Identify total company-wide spend per vendor• With Sales Operations: Establish total spending on, for example,
meals compared to competitor spending levels• With Clinical Ops: Compare per-subject spending with per-subject
spending of peer companies (based on Aggregate Spend and ClinicalTrials.gov data)
• With Sales Leadership: In conjunction with other publically available data, identify other key opinion leaders that may not have been considered by your company before
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Challenges Facing Our Industry Today & Future Surveying
SHORT TERM HURDLES:
• Setting up sustainable processes to capture external vendor’s spend
data
• Research Payments
• Data Verification and Proactive Risk Mitigation
LONG TERM HURDLES:
• Alignment of compliance and transparency processes across continents
to meet the demands of a global healthcare and regulatory environment.
• Maintaining valuable KOL relationships to support research and
innovation.
We want to hear
from you!
Submit your benchmarking ideas to [email protected]
by April 30 to be considered for our next benchmarking analysis.
Thank You and Contact Us
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Leanne DiDomenico, Manager
Phone: 267.250.9434
Email: [email protected]
Joseph Morrell, Manager
Phone: 312.731.7469
Email: [email protected]
Thank you to all the organizations who participated in Huron’s Benchmarking Survey. Your input is greatly valued, and provides critical benchmarking data for
establishing best practices in an ever-changing regulatory landscape.
Please feel free to reach out to us if you have questions about the survey or if you have additional items you would like to see in 2014.
Manny Tzavlakis, Managing Director
Phone: 312.532.1504
Email: [email protected]
Speaker Contact Information:
For Consultation Services Contact:
