A Solution for Managing Stark in CRM

What’s troubling the healthcare industry today? Plenty!
With HIPAA regulations, Obama’s overhaul of healthcare, and Stark compliance for limiting the ability to provide gifts / entertainment to doctors — it’s no wonder healthcare leaders have difficulties balancing priorities and resources. What’s this got to do with CRM? Let’s take one specific challenge with the Federal Stark Law and how it was solved with Salesforce.

Federal Compliance

The law prohibits the giving of non-monetary compensation to a referring physician in excess of $359 (for 2011) which include lunch’s or holiday gifts whether its to a physician directly or their family and staff. The consequences are heavy fines, sometimes in the 7 digits. Doesn’t seem like much? Put yourself in the shoes of a compliance officer, controller’s office, or Director of Sales Operations for an enterprise of 200+ salespeople who generate multiple visits and lunches with physician practices daily. What kind of tools and controls can you put in place for your sales organization to understand and comply with this law that can prevent the company costly penalties, and customers for Stark Law & Regulation offenses?
What have I spent year-to-date with any physician or practice? How do I know if I have exceeded the limit or if I am fast approaching the limit?
What if I invite 10 physicians to a lunch and learn? Can they all attend? Their staff?
It would be best if I knew in advance, before planning any activity with a customer. Certainly it is embarrassing to make a phone call to cancel a sales meeting because I overspent — but better than violating the law which not only financially penalizes me, but prevents me from doing business with that particular customer (physician) for the rest of the year. Double ouch!

The Solution

For organizations that sell to healthcare providers, CRM can offer a very helpful tool for empowering your sales force to plan their activities effectively, comply with the spending limits of your sales calls that Stark imposes, and prevent costly mistakes. One can use a CRM system to track expenses to physicians, manage approvals, and optimize selling activity.
An example of this was built for a national provider of laboratory services. A custom application built on the Salesforce CRM platform utilizing APEX and Visual Force tools provided expense management features such as the following:

  • Stark annual spend limit tracking
  • Manager approval routing for events
  • Stark entertainment event expense split by account (doctors and staff member attendees)
  • Accounting actual expense update
  • Compliance audit tracking and reporting
  • Integrates with standard CRM activity management and Outlook

Functionality on a maximum annual prescriber limitation of in-direct compensation, this expense tracking system maintains a running balance for the prescriber, approval of the expense request by the manager, and tracking of actual spend from accounting.
The below example shows an example of a Stark event expense tracking report with line items for attendees. The Stark expense report is built to mirror & synchronize with a standard Salesforce calendar event (meeting) to permit use of SFDC calendaring and outlook integration features.

Are you a healthcare leader faced with a similar challenge?

We’d love to show how we have helped other companies who sell to healthcare become Stark compliant with their Salesforce CRM system. Call CRM Evangelist to discuss your situation and how Salesforce CRM can be leveraged to keep your organization, as the government would say, clear of violations to Stark Law.
Contact CRM Evangelist or download our whitepaper: The Stark Reality of CRM in Healthcare.