Data Integrity : Ensuring Data Integrity : Ensuring Compliance from an IT PerspectiveCompliance from an IT Perspective

All programs and calculations which are detailed within this presentation Have been directly derived from OIG guidelines Christopher C. Biddle

OverviewOverview

Today’s talk will focus on:

• OIG Compliance Guidance for manufacturers

• Potential risk areas identified by OIG

• How to reduce risks by using a “compliance-centered” government pricing system

Consumer,

Professional, etc.Risk

Reduction

Profitability

ContractAdministrationPricing

Strategies

Chargebacks

EDI (Electronic Data Interchange)

Rebates

IT Systems

Government:Medicare / Medicaid, FSS, VA, PHS & State Programs

OIG Compliance Guidance: OIG Compliance Guidance: Basic Elements of a Compliance ProgramBasic Elements of a Compliance Program

Begins with a formal commitment to compliance by board of directors/governing body:

Allocation of adequate resources

Timetable for implementation of compliance measures

Appointment of compliance officer

OIG Compliance Guidance: OIG Compliance Guidance: Basic Elements of a Compliance ProgramBasic Elements of a Compliance Program

At a minimum, compliance program should include:

Written policies & procedures Compliance officer/committee Regular education & training Effective lines of communication between

compliance officer & all employees Regular compliance monitoring Enforcement of clear & specific disciplinary

guidelines Clear guidelines for investigating & responding to

alleged offenses

OIG Compliance Guidance: OIG Compliance Guidance: Potential Risk AreasPotential Risk Areas

OIG identifies 3 major potential risk areas for manufacturers:

Integrity of data used by state & federal governments to establish payment

Kickbacks & other illegal remuneration

Drug samples

OIG Compliance Guidance: Integrity of DataOIG Compliance Guidance: Integrity of Data

OIG states that manufacturers’ reported prices should accurately take into account:

price reductions & cash discounts free goods contingent on a purchase agreement rebates, up-front payments & coupons goods in kind free or reduced-price services grants other price-concessions or similar benefits offered to some or all purchasers

OIG Compliance Guidance: Integrity of DataOIG Compliance Guidance: Integrity of Data

OIG makes 4 additional suggestions regarding integrity of data:

Any discounts or similar benefits offered on the purchase of multiple products should be fairly apportioned among them

Assumptions underlying reported prices should be “reasoned, consistent, and appropriately documented”

All records relevant to reported prices and efforts to comply with federal programs should be retained

Particular attention should be paid to AMP and BP calculations

OIG Compliance Guidance: Integrity of DataOIG Compliance Guidance: Integrity of Data

• OIG Guidance devotes only 2 pages to integrity of data – bulk of Guidance focuses on kickbacks and samples

• Bottom line = manufacturer is responsible for ensuring the integrity of data they send to the government

• Integrity of data is largely a technical issue – need a system that can accurately pull in and filter massive amounts of data, perform complicated computations & ensure that they can be accurately replicated for the life of the particular government program!

Ensuring Data Integrity: Potential LiabilityEnsuring Data Integrity: Potential Liability

Government can impose serious penalties if data it receives is not complete and accurate:

Termination of MDRP/FSS Agreement(s) by CMS or DVA

Civil money penalties, such as large fines under the MDRP

Penalties under the False Claims Act for knowingly failing to generate or report information accurately (e.g. TAP)

Penalties resulting from an OIG audit (interest, fines, DoJ referral, CIA)

Ensuring Data Integrity:Ensuring Data Integrity:Building a Compliance-Centered SystemBuilding a Compliance-Centered System

An effective government pricing system must:

Withstand audit scrutiny – reproducible calculations

Be transparent – lack of transparency is behind most investigations

Integrate commercial and government sides of business – do not operate in a vacuum

Handle use by multiple corporate entities separately & distinctly, if applicable

Manage assembly of data elements & produce corresponding transmission files & other forms required by VA and/or CMS

Ensuring Data Integrity: TransparencyEnsuring Data Integrity: Transparency

Question . . . .

What is transparency?

How would you implement TRANPARENCY in your environment?

Ensuring Data Integrity:Ensuring Data Integrity:Reproducible & Auditable CalculationsReproducible & Auditable Calculations

Pricing system must reliably recalculate pricing to the penny at any later date:

Reference same data and policies used during any pricing run

Demonstrate that prices submitted to VA and/or CMS were calculated by the system of record

Ensuring Data Integrity:Ensuring Data Integrity:Reproducible & Auditable CalculationsReproducible & Auditable Calculations

Pricing system must re-generate all supporting sales data for any pricing run:

• Data may be used to externally validate system- generated price during an audit

• System must store all transactional data plus historical & current COT alignments

• System must be able to handle changes in COT: capture & record COT each customer acting under for

each transaction (e.g. if customer changes way does business)

change COT for all affected transactions (e.g. if customer was incorrectly classed)

Ensuring Data Integrity: Ensuring Data Integrity: Source Data ReconciliationSource Data Reconciliation

Pricing system must reconcile local data with all relevant source systems before pricing process begins:

Control totals for each transactional data feed should agree with totals from pricing system

All domain/master tables should be compared & confirmed to be identical

Pricing system must be able to “see” all sales data at transactional level

Pricing system must be able to interface data from multiple sources (direct & indirect sales, rebates, etc.)

Ensuring Data Integrity: Ensuring Data Integrity: Automatic Data Monitoring & ProcessingAutomatic Data Monitoring & Processing

Pricing system must support business events & irregularities in contracts that affect pricing calculations:

Identify significant business events, e.g. product introduction/expiration, new trade classes/codes

Accurately allocate payment in unique situations affecting AMP & BP, such as product bundling

Allow for product blending, in which sales occur across multiple NDC codes

Adjust calculated prices to reflect differing potencies of the same product, if necessary

Ensuring Data Integrity: GAP PricingEnsuring Data Integrity: GAP Pricing

Pricing system must accurately report prices for periods in which no transactional data is identified:

Data either does not exist or sales aggregate to a negative value (preponderance of returns or

negative adjustments)

Prior period’s price is carried forward as reported price for “no data” periods (can extend through an

indefinite number of periods)

Must update all “carried-forward” prices if prior pricing period is recalculated

Ensuring Data Integrity: User FlexibilityEnsuring Data Integrity: User Flexibility

Pricing system must allow users the flexibility to identify questionable calculations & incorporate information that affects pricing process:

Users must be able to - identify all individual transactions for each calculation

quickly & accurately compare calculated values to other price points, e.g. AMP & BP

re-run calculations on command to incorporate new data (for current & prior periods)

manually enter new data & edit existing data

overwrite system-calculated prices with externally- calculated prices, if necessary

Ensuring Data Integrity: Security OverviewEnsuring Data Integrity: Security OverviewPricing system must integrate several key security measures to ensure data integrity:

Lock down & archive all calculations plus supporting data, once completed

Do not allow access to the data base through any other internal tool besides the government pricing system

Change control – do not give one person authority to make changes within system; always require approval from another point of control

Build in varying security levels for users within the application itself

Ensuring Data Integrity: System SecurityEnsuring Data Integrity: System SecurityPricing system must support configurable security roles and levels:

User level security - controlled access to various functionalities:

• authorizations for manual entries & overrides

• limited access to certain fields, windows or dataInterdivisional level security

• no interdivisional access to data, calculations, methodologies or results unless authorized by business users

Audit level security

• calculations locked down once completed

• histories of changes recorded

Ensuring Data Integrity: Ensuring Data Integrity: Reporting, Analysis & ForecastingReporting, Analysis & Forecasting

Data analysis & reporting capabilities assist users when pricing questions arise:

• Ad hoc query tools allow business users to research pricing anomalies & decrease reliance on IT staff

• Preformatted reports aid in identifying & addressing problems with pricing submissions

Operational reporting (sales totals, pricing components, transactional details, product comparisons)

Exception reporting or Alerts Trending & Forecasting

Ensuring Data Integrity: Ensuring Data Integrity: Summary of Data Handling CapabilitiesSummary of Data Handling Capabilities

An effective & compliance-centered government pricing system must:

Reconcile local data with all relevant source systems before the pricing process begins

Accurately report prices for periods in which no transactional data is identified (GAP pricing)

Reliably recalculate pricing to the penny at any later date

Re-generate all supporting sales data for any pricing run

Ensuring Data Integrity: Ensuring Data Integrity: Summary of Systems RequirementsSummary of Systems Requirements

An effective & compliance-centered government pricing system must:

Support business events & irregularities in contracts that affect pricing calculations

Allow users flexibility to identify questionable calculations & incorporate information that affects the pricing process

Incorporate data analysis & reporting capabilities to assist users when pricing questions arise, including transmission or required files & forms to VA or CMS

Support configurable security roles and levels

Ensuring Data Integrity: Ensuring Data Integrity: IdealGPIdealGPTMTM

Ideal Systems has developed a government pricing solution (IdealGPTM) that:

Incorporates all of the requirements for an effective & compliance-centered pricing system discussed in today’s presentation

Ensures compliance

Optimizes government pricing to significantly improve financial performance

Meeting the Needs of Today’s Meeting the Needs of Today’s Pharmaceutical Manufacturers: Pharmaceutical Manufacturers:

IdealGPIdealGPTMTM

Ideal System’s 4th generation (4G) government pricing solution fully addresses the needs of the pharmaceutical industry by incorporating:

Full compliance

Price Optimization

Forecasting Capabilities

Flexible Policy Administration

Full Reporting & Analysis Functionality