It’s that time of year again—not for holiday shopping, but for preparing your HCP aggregate spend data. The Open Payments (Sunshine Act) reporting window opens every year in early February, followed by a pre-publication review and dispute period, which typically runs from April 1st to May 15th. During this time, covered recipients—such as physicians and teaching hospitals—have the opportunity to review and, if needed, dispute reported data.
The transition from gross to net sales involves several key deductions—rebates, chargebacks, discounts, allowances, and returns. Among these, rebates—offered to pharmacy benefit managers (PBMs), insurers, or directly to patients—represent a significant portion. Their complexity stems from tiered structures, varying eligibility criteria, and contractual conditions, making accurate forecasting and calculation particularly challenging.
Chargebacks, typically provided to wholesalers or group purchasing organizations (GPOs), introduce additional layers of complexity. Processing high transaction volumes from multiple intermediaries while maintaining accuracy and compliance requires robust data management.
To address these challenges, pharmaceutical companies often rely on specialized rebate and chargeback management software such as IntegriChain, Model N, and Vista. When integrated with systems like SAP, these tools can automate and streamline complex calculations, ensuring both financial accuracy and regulatory compliance.
Did You Collect Them All?
Make sure you are pulling expenses from all channels. Companies may have HCP or aggregate spend eligible expenses in multiple places. Expenses could be coming to the accounting department from any of the following channels:
- Companies run CRM systems such as Salesforce, NetSuite, Veeva
- 3rd party expense tools such as Concur, Expensify, ExpenseWire and more
- Vendor Bills generated from or outside of their ERP system
- Hard to believe but some companies may even have paper or email submission of expenses
How expenses are managed is very specific to a given organization. Some companies might have excellent processes in place based on best practices. Such companies will have little problems but others may not be as organized and can easily spend weeks on this activity. Ensuring data accuracy is the most time-consuming activity in the reporting process. This is why a good solution accounts for auto error detection and correction in the software.
Are They Correct?
Once all expenses are collected, make sure they are both complete and approved. Many systems allow employees to keep expense reports open for several days, adding new items over time. As a result, a single report might contain multiple line items—some of which may not be eligible for reporting. Including these premature or ineligible expenses can lead to inaccuracies in your report.
If you haven’t been compiling expenses regularly (e.g., monthly), it’s best to wait until all HCP spend reports and vendor invoices are finalized and approved—but don’t delay too long. In most cases, these expenses will already be marked as paid, although that’s not essential as long as they are clearly complete and accurate.
Ideally, your system has strong filtering and analysis capabilities so you don’t need to rely heavily on spreadsheets to get clean, reliable data.
Civil monetary penalties (CMPs) of up to $1,000,000 may be imposed on your organization if it fails to report information in a timely, accurate, or complete manner
Centers for Medicare & Medicaid Services
What Happens During Submission?
CMS has a well structured and automated validation process in place that analyzes every report as it is submitted. The open payments system validates your report in a four-step process. The short of it is, in only step 1&2, there are at least 24 validations the open payment system will run on your submission and kick your file back if it misses the mark.
Some inaccuracies related to the payment amount can make its way into the report and to the CMS undetected. If you report spending $1,000 on a physician instead of $100, it will make it through the submission process. However, it will be caught when the CMS releases data to the Physicians and Teaching Hospitals during the Review and Dispute Data phase of the reporting. You want to avoid this.
Why?
Simple, you don’t want to get unnecessary attention from the CMS and expose yourself to audits. Not to mention the distrust it spreads with the physician and hospital community.
Applicable GPOs may be audited to ensure the submission of timely, accurate, and complete reports on ownership or investment interests held by physicians and their immediate family members at any time
Centers for Medicare & Medicaid Services
There are tactics that can be employed to detect and resolve disputes throughout the year well before submitting to the CMS which will be a topic for another day. Hope you found helpful tidbits in this post. The most important take away would be that it is a time-consuming process so start putting your report together now if you have not already.