Aggregate Spend Reporting and Sunshine Act Compliance

The Physician Payments Sunshine Act is a U.S. law requiring healthcare manufacturers to report aggregate spend—the total amount of all payments and “transfers of value” to physicians and teaching hospitals. After much debate and delay, the law finally went into effect in February, 2013, prompting manufacturers to begin data capture on August 1, 2013 followed by their first federal reports due to the Centers for Medicare and Medicaid Services (CMS) by March 31, 2014.

According to Christine Meyers, Associate Director, Corporate Compliance at Alere, Inc., many companies are just waking up to the realities of aggregate spend reporting. She says the process is too burdensome and time-consuming for large companies to manage manually.

We caught up with Christine to learn more about the challenges created by the Sunshine Act, as well as the portal Alere developed with the Mendix low-code development platform to streamline aggregate spend reporting.

How is the Physician Payments Sunshine Act impacting companies like Alere?

The Sunshine Act has had a significant impact on Alere because we are a large company with many entities in the U.S. We must request monthly reports from each of our entities and then aggregate, standardize, and check all of this data before it is submitted to the CMS. This process creates considerable effort for our compliance and finance teams.

There are other factors too, such as multiple reporting templates for research and non-research payments. Some of our entities make both types of payments, so they must run two separate reports. It generates additional administrative work.

We simply did not have the internal bandwidth to manually manage aggregate spend reporting.

Why did you decide to build an application with Mendix to manage this process?

We evaluated several platforms for developing an application to support this business process and decided that a Mendix application was the best fit for our needs. Mendix was upfront and responsive throughout the process.

While CMS had not yet announced the final rule, we knew we had to move quickly and remain nimble to support the ever-evolving requirements.

And since we could deploy in the Mendix Cloud, we did not have to worry about any hardware or infrastructure.

Walk us through your app and how it’s supporting your aggregate spend reporting.

Using Mendix, we custom built a single application to manage our aggregate spend reporting. We now have one central location to capture and standardize data so that we can generate timely and accurate reports in order to prepare for Sunshine Act requirements.

Each month, various entities run reports and upload them to our aggregate spend portal, using Mendix. They are notified whether the data is accepted or rejected based on our reporting template criteria.

If the data is not reported properly, a report is generated to include line item validation errors so that necessary corrections can be made. Once reports are accepted, I receive instant notification and may then review the reported data. I have the ability to run reports by entity or collectively by payments.

The whole process is much more automated, thereby reducing administrative work. It is much easier to request monthly reports and to track when reports are uploaded to our aggregate spend portal.

What advice would you offer to peers who may be struggling to comply with the Sunshine Act?

Aggregate spend reporting may be too burdensome to do manually, especially for large, complex companies with multiple accounts payable and/or expense management systems. The ability to have one location to accept and store data from many different systems will greatly ease the administrative burden of the reporting requirements.

It’s also important to get buy-in from senior management. Understanding the requirements and penalties of the Sunshine Act and how they apply to Alere as a medical device manufacturer, senior management supported our need to build an aggregate spend portal to facilitate meeting the requirements.

Our finance and compliance teams are all very busy, but everyone understands the importance of this compliance requirement. We have worked together with Mendix to build an aggregate spend solution that will assist us in complying with the Sunshine Act requirements in an efficient and effective manner.

Many companies are just waking up to the reality of the Sunshine Act and need to act now to get the right systems and processes in place.