An effective technology solution should follow the seven steps outlined below to ensure a systematic methodology is in place to apply controls throughout the healthcare professional (HCP) engagement process in order to reduce the risk of improper payments.
- Needs Assessment and/or Event Justification: A needs assessment process documents a defined, legitimate business, medical or scientific “need” and how the services rendered by the HCP(s) will fulfill that need. Depending on the nature of the services, the needs assessment may also capture the frequency of the service, the amount of time needed, a specific date for completion, the process for HCP selection as well as the factors that went into determining the number of HCPs necessary and meeting logistics. For some organizations, a needs assessment process is practical to review multiple future engagements at one time. Organizations that may not have the volume of activities or organizational structure to warrant a needs assessment process may use an event justification process to apply similar controls to individual engagements or events.
- HCP Screening: Prior to engaging an HCP, organizations should perform, at a minimum, a basic due diligence review to ensure that the person(s) is/are properly qualified to perform the services. This may consist of a review of their curriculum vitae (CV), publications, affiliations, etc. Companies should also screen for medical license validity and any exclusions, debarments or other restrictions that may hinder the HCP’s ability to provide services or properly represent the organization.
- Established Compensation Rates/Fair Market Value (FMV*): Payments to HCPs for consulting engagements, such as speaker programs or advisory meetings, should never be based on the volume or value of their prescriptions. FMV* rates should be based on the HCP’s qualifications, years and areas of experience, reputation in their field and the value of the services they would be providing.
- Contracting Controls: Written agreements should contain “safe harbors” that may protect certain payment and business practices that could otherwise implicate the Anti-Kickback statute. For example, “personal services” arrangements may be protected if the agreement:
- Is in writing and signed by the parties
- Specifies the services to be provided, including the frequency of said services, based on an exact “schedule of such intervals, their precise length and the exact charge for such intervals”
- Specifies the total amount of compensation, including any allowable reimbursements for travel, meals, etc.
- Is not for less than one year
- Consists of aggregate services that do not exceed what is reasonably necessary to accomplish the services
- Transfer of Value Controls: Internal controls are important in ensuring that approved compensation hours and rates coincide with invoices and actual payments. The engagement process should include a mechanism for communicating approved activities, hours and compensation to any department(s) or third parties issuing payments before payments are rendered.
- Monitoring and Auditing: Routine monitoring and auditing through the use of consistently applied metrics can be a way to proactively identify potential issues. Some variables may include the frequency of an activity, the volume of activities associated with a particular HCP or group of HCPs, the total amount of compensation paid to an individual over a period of time, etc.
- Document Retention: All of the documents and communications related to the preceding steps (1-6) should be stored in a manner that makes them easily accessible for formal auditing and investigative purposes. This is a critical step in demonstrating evidence of the organization’s internal controls.
Staying ahead of the risk curve and complying with global regulations requires appropriate controls and review processes. If you are interested in learning more, click here to download our white paper Managing the Complexities of HCP Engagements.
*Fair market value is often defined as the price at which the items or services would be exchanged between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of the relevant facts, and without consideration of either party’s position to make or influence referrals, to furnish items or services to, or otherwise generate business for the other party as of the date of valuation.