The top 5 consequences of botching Open Payments

In Spend management by Heather Lohmann

Do you work for a group purchasing organization (GPO) or a company that manufactures prescription drugs, medical devices, or medical supplies covered under Medicaid, Medicare, or SCHIP? If so, the Open Payments issues you’re going to read about here might be a thing of the past. But if your company is like most, it’s still reacting to the National Physician Payment Transparency Program that came about with the passing of the Sunshine Act.

Fortunately, more Life Sciences companies are learning how to proactively manage Open Payments. And by doing so, they are turning the following five consequences of Open Payments mismanagement into ancient history.

Consequence #1: The sales team sells less.

If sales pros liked dealing with all the minor details, they wouldn’t be in sales. So when Open Payments requirements hit, thousands of sales pros saw their selling time reduced in favor of poppycock. Suddenly, they were drowning in a sea of paperwork that was not only foreign, but also needed to be 100% accurate. One screw up could cost their company big time (more on that later).

When a sales reps are inundated with stacks of receipts and transaction records — and they are deathly afraid of misplacing a single record — it becomes nearly impossible for them to make the same contributions toward the company’s bottom line.

Consequence #2: Everyone is stuck dealing with minutia.

An antiquated approach to Open Payments affects the entire company, not just the sales team. Whether office administrators use multiple applications to record and submit expenses, or team members go back and forth between the reporting function and the National Provider Index (NPI), or an internal auditor populates Excel docs from scratch, Open Payments reporting is destined to become one giant time suck if it is not simplified.

Can Life Sciences companies get by with manual reporting processes? Sure, and some still do. But none are close to efficient. There are too many moving parts and too many people involved.

Consequence #3: Hefty fines.

We touched on this earlier. A single failure in this area could cost your company up to $1M. If your company relies heavily on humans to get compliance right, you are leaving yourself open to human error.

Even the smartest of us are not infallible. Fortunately, we are smart enough to program technology that protects us from ourselves.

Consequence #4: Cutting the hand that feeds you.

Have you ever found an error on your grocery receipt after you were already home? Multiply that frustration by 100 and you have the Open Payments dispute process.

In 2014, physicians and teaching hospitals disputed over 1,700 records totaling roughly $5M (, 2015). These disputes often enter the ethical realm, meaning they can quickly become contentious. The same physicians who do the disputing sign sales contracts and maintain tight-knit networks with other physicians, who are also potential customers. Suffice it to say, mistakes in transfer of value (TOV) records, no matter how minor, are hardly good for business.

Consequence #5: Losing your best employees.

All things equal, why would someone choose to work at a company where rigorous paperwork and desktop-tethered workflows are the norm when they could perform any task, from anywhere, in a fraction of the time, without fear of misplacing critical information?

Today’s connected employee makes it a point to learn about potential employers’ culture and tech environment. A recent survey revealed a connection between tech freedom and employee loyalty, and if your employees find the competition’s technology lets them focus more fully on the work they love to do, there’s a good chance they might just jump ship.

Does your company still suffer from these Open Payments consequences? Or are you making progress but still taking on unnecessary risk?  Discover a better way by checking out our blog post How Life Science companies can close the book on Open Payments problems.”


About the Author
Heather Lohmann

Heather Lohmann


Heather Lohmann is a Content Marketing Manager at Deem and has been working in the SF tech industry for over 4 years. She received a bachelor’s degree from CSULB and an MFA in creative writing from the California College of the Arts.