With just a few months until CMS provides its final guidance on the Sunshine Act, CBI’s infographic “Shining Light on the Sunshine Act” has perfect timing. Drawing from a number of sources, the data illuminates the major problems facing those affected by the law, who are largely still ignorant of what’s required of them under the law.

Just a quick glance through the numbers raises a number of red flags. Here are four warning signs that manufacturers still have a lot of work to do:

CBI's infographic:
click to view

1. No one is educating the public about reported gifts and payments.The Physician Payment Sunshine Act requires pharmaceutical and medical device manufacturers to disclose all gifts and payments made to physicians and hospitals that exceed $10. Payments of more than $100 will be published on a web portal open to the public. But no one -- not the government, the healthcare providers, or the manufacturers -- can really anticipate how this data will be received or used by the public. Large payments, that are often necessary and ethical, could easily be misinterpreted as kickbacks. There has been no education process for the public thus far, which could be very dangerous for public perception. Expect lawsuits.

2. Data verification is a low priority. Too many companies have neglected the need to verify their spend data, a stark fact in the infographic that lines up with my own conversations with life sciences organizations. Some 33 percent either don’t validate their data or are unsure whether they do. This staggering percentage means that too few companies are paying attention to vital upstream activities, such as contract management, which feed aggregate spend reporting. Bad, uncorroborated data leaves manufacturers vulnerable.

3. Manufacturers aren't communicating the coming changes. According to the infographic, only 53 percent of physicians and compliance officers know about the Sunshine Act. This high level of ignorance isn't so surprising when you consider that only 20 percent of manufacturers have produced and distributed communication materials to the HCP/Os. Manufacturers should be concerned about a backlash, which could lead to a relationship management nightmare.

4. Manufacturers underestimate the Sunshine Act. An important part of Sunshine Act compliance is establishing procedures for justifying physician payments and accurately tying that to spend reporting. When asked how difficult they would find this, 50 percent reported that it will not be difficult to develop the new procedures, and 41 percent said they are very confident that they’ll be Sunshine Act compliant by 2013. These numbers are absurd given that CMS has not yet provided its final guidance and 44 percent of respondents either aren't validating spend data or don’t know whether they are. This high level of confidence among manufacturers borders on foolhardiness. And this arrogance can lead to carelessness. Watch out for a manufacturer to be made an example in 2014.

Clearly manufacturers need to work on their communication to doctors and the public. For the 37 percent of manufacturers that have no plans to communicate or are unsure how they’ll notify HCPs and HCOs about the Sunshine Act, consider that the potential damage to your HCP/O relationships will cost much more than whatever time you’ll save by not proactively communicating.

Many manufacturers also need to make spend data validation a priority. If your organization is among the one-third of companies that aren't validating or aren't sure if they are, make some noise in your organization while keeping an eye on CMS for the latest guidelines. Fines of $1,000 to $100,000 for each payment not fully reported just aren't worth it, especially if it leads to a Corporate Integrity Agreement. Expensive fines and loss of relationships are high stakes. The time to act is now.