by Michael J. Shapiro | February 01, 2013
Primed for the New Rules
Debi  Scholar

As stipulated in the federal Physician Payments Sunshine Act, pharmaceutical and medical-device companies were supposed to make their first reports this March 31, based on all expenses related to health-care-professionals in 2012. But numerous delays have occurred, and as of press time the Centers for Medicare & Medicaid Services had yet to issue a final ruling that outlines just what those reporting requirements are.

As a result, companies in the field have had to be proactive in their data collection, anticipating what they will need to report. "I speak to many independent planners who plan for multiple pharma, medical-device and biotech companies," says Pat Schaumann, president of St. Louis-based Meeting IQ and the founder of the International Medical Meeting Professionals Association. "They are the first to admit that each company is doing this differently."

Strategic meetings management consultant Debi Scholar, above, president of Scotch Plains, N.J.-based Scholar Consulting Group, notes the discrepancies in interpretation of the law. "For example," says Scholar, "let's say there is a health-care professional meeting, and a meeting room costs $3,000. Some pharmas might divide the cost of the meeting room among all of the attending health-care professionals, whereas others do not consider the meeting room cost as part of the amount that must be calculated for health-care professional expenses. Without documented standards in place, each pharma can interpret their compliance to regulatory guidelines slightly differently." -- M.J.S.

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Strategic meetings management programs have been a best practice among major medical and pharmaceutical companies for nearly 20 years. But in the past year or so there's been a renewed emphasis on SMM, thanks to passage of the Physician Payment Sunshine Act, a key part of the federal Affordable Care Act.

"It's something that's getting a lot of attention," explains Steve O'Malley, senior vice president of St. Louis-based Maritz Travel. "That's because there's a great deal of liability attached to it, it's complex, and it affects everyone in the pharma and health-care sectors," adds O'Malley, who also serves as general manager of Maxvantage, the Maritz strategic alliance with American Express that offers SMM expertise.

In short, the Sunshine Act requires any companies that manufacture drugs or medical devices to report to the federal government any and all payments to health-care professionals and hospitals. These "transfers of value," as the act calls them, include travel expenses, consulting and speaking fees, grants, samples, royalties, food and possibly other forms of payment, depending on how the law is interpreted. The government plans to post the reported payment information on a public website, readily accessible by anyone who wants to see how much any given doctor is receiving from medical manufacturers.

Companies in the pharmaceutical and medical-device sectors have long been subject to guidelines, as well as a slew of state regulations, regarding such payments and interactions. Still, the Sunshine Act has major ramifications for medical meeting professionals, holding them to still more stringent levels of data collection and reporting, and making it absolutely essential to report information on a per-attendee basis.

"There is more reason now than ever before to look at strategic meetings management solutions," notes Pat Schaumann, president of meeting-services providers Meeting IQ and Present China, as well as the founder of the International Medical Meeting Professionals Association.

A strategic meetings management program is typically a company-wide initiative that involves many stakeholders -- the meetings team as well as travel, procurement, risk management, legal, technology and others -- to standardize various aspects of the meeting approval, sourcing and contracting process. The goal is to capture as much meetings data as possible and increase the efficiency of planning processes as well as leverage with suppliers, while also mitigating company risk. Particularly crucial to health-care companies is the ability to produce detailed reports as a result of the effort. "They incorporate so many components that we're now required to track anyway. And now there are penalties, fines and even, in some cases, jail for a violation. So it really becomes a companywide issue with respect to meetings," says Schaumann.