Policy handbook
Copy, edit and adopt. Adjust the limits to your own spend history before rollout.
1.0Purpose and scope
This policy governs travel, meals, vehicle use and other expenses for field sales representatives, key account managers, medical science liaisons and their managers. It reimburses employees under IRS accountable plan rules and captures every payment or transfer of value to covered recipients for CMS Open Payments reporting. It works alongside the compliance code on interactions with healthcare professionals, and the stricter rule always applies.
2.0Roles and approvals
District managers approve representatives' expenses and check HCP meals against call notes. Compliance pre-approves speaker programs, reviews HCP spend monthly and owns the Open Payments data set. Accounts Payable reviews every report, and regional directors approve reports above $3,000. Medical science liaisons are approved by the medical affairs director, not by sales, to keep scientific exchange separate from promotion.
3.0Meals with healthcare professionals
Meals with prescribers and their staff must be modest, occasional and accompany an educational presentation, such as an in-office lunch with product information. Representatives must record each attendee's name, credentials and NPI and keep the sign-in sheet. Spouses and guests are never paid for, and take-out meals for staff who did not attend the presentation are not permitted.
4.0Sunshine Act transfers of value
Every meal, speaker fee, travel cost or educational item provided to a covered recipient is a transfer of value that must be captured, even when it falls below the CMS annual reporting threshold, because small amounts aggregate per recipient over the year. Representatives must never split a meal across reports, cards or colleagues. Compliance reconciles captured data to the general ledger before each annual submission.
5.0Speaker programs
Speaker programs must be approved by Compliance before the venue is booked, at a setting suitable for an educational presentation and not at an entertainment or recreational venue. Meals are capped at $118 per attendee, and alcohol is not served. Attendees who are covered recipients are recorded with name and NPI. Speaker fees and travel are paid through Compliance, never through a representative's expense report.
6.0Sample handling
Representatives must store drug samples only in approved locations, keep inventory records current and obtain a written or electronic request and signed receipt for every sample delivered, as the Prescription Drug Marketing Act requires. Costs of approved storage, temperature control and courier shipments are reimbursable at actual cost. Lost, stolen or damaged samples must be reported to the sample accountability team within 24 hours.
7.0Territory mileage and vehicles
Representatives use a company fleet car or receive a FAVR allowance, depending on their region. Fleet car users log business and personal miles, and the value of personal use is reported as taxable wages. Representatives without either arrangement are reimbursed at the IRS standard mileage rate, logged by date, account and destination. Miles from home to the first call count beyond the normal commute.
8.0Lodging and employee meals
Overnight territory stays are reimbursable when the day's route ends more than 150 miles from home. The company will reimburse a standard room up to the nightly cap, including taxes, with the itemized folio attached. Employees may spend up to the daily meal allowance on their own meals while traveling overnight. Meals in the home territory are personal unless they are HCP or business meals.
9.0Alcohol, entertainment and gifts
Alcohol is never reimbursable at any meal or program with a covered recipient. Entertainment and recreation for healthcare professionals, including sporting events, golf and concerts, is prohibited. Gifts to prescribers and their staff are prohibited, apart from approved educational items. Several states impose stricter meal limits, gift bans or their own reporting, and those rules apply in addition to this policy.
10.0Receipts and substantiation
Expenses must be submitted within 60 days after they are paid or incurred, and HCP meals within 10 days so Compliance can capture them in the right month. Each line needs amount, date, place, business purpose and, for meals, every attendee's details. Itemized receipts are required for all lodging, any expense of $75 or more and every HCP meal regardless of amount.
11.0Corporate card and returning excess
Corporate cards are for business expenses only, and personal charges must be flagged within 10 days and repaid. Advances for national meetings are issued no more than 30 days before travel, and unspent amounts must be returned within 120 days after the expense was paid or incurred. Personal fuel bought on a fleet fuel card must be reported on the monthly mileage log.
12.0Audit, pushback and consequences
Accounts Payable and Compliance review every report, and a person reviews every flag raised by audit software, such as an HCP meal with no NPI, a meal split across two cards or alcohol on a speaker program bill. The software may draft clarification requests, but finance and Compliance approve each message before it is sent. Violations involving covered recipients may lead to discipline up to termination.
Recommended limits
| Category | Limit | Note |
|---|---|---|
| Domestic hotel (per night) | $219 in territory; $279 for national meetings in major metros | Overnight territory stays need a route over 150 miles from home. |
| Daily meals (traveling) | $74 per full travel day | Employee only. Any meal with a prescriber follows the HCP meal row. |
| HCP meal (per attendee) | $42 in-office lunch; $118 for an approved speaker program dinner | Modest and occasional, with an educational purpose. Name and NPI of every covered recipient recorded. |
| Client meal (per attendee) | $86 for payer, distributor and non-HCP business contacts | If a prescriber joins, the HCP meal row applies to everyone. |
| Domestic airfare | Economy; book 14 days out for national and regional meetings | Territory travel is by car unless the round trip exceeds 500 miles. |
| Personal vehicle mileage | Company fleet car or FAVR allowance; IRS standard mileage rate for others | Personal miles in fleet cars are tracked and reported as taxable wages. |
| Ground transport | Standard ride-share or taxi; parking at clinics and hospitals | Parking tickets and towing are never reimbursable. |
| Alcohol | Never with HCPs; never at in-office meals | Speaker programs may not include alcohol under this policy. |
| Business gifts | None to HCPs or their staff; $25 per recipient per year to others (IRC § 274(b)) | Approved educational items follow the compliance catalog. |
| Sample storage and shipping | Actual cost of approved storage and courier only | Personal storage units are never used for samples. |
| Receipt required at | $75 (IRS threshold); every HCP meal at any amount | HCP meals need the itemized receipt and the sign-in sheet. |
IRS Accountable Plan clauses
Keep these in the handbook so reimbursements stay excluded from wages under IRC § 62(c) and Treas. Reg. § 1.62-2.
- A1The company reimburses only expenses with a business connection to the employee's work, and each HCP or business meal must identify the attendees and their business relationship, as Treas. Reg. § 1.62-2 and § 1.274-5 require.
- A2Each expense must be substantiated with amount, time, place and business purpose within 60 days after it is paid or incurred, meeting the fixed-date safe harbor in Treas. Reg. § 1.62-2(g)(2).
- A3Itemized documentary evidence is required for every lodging expense and any other expenditure of $75 or more, as Treas. Reg. § 1.274-5(c)(2)(iii) provides, and the company requires it for every HCP meal.
- A4Mileage reimbursements must be supported by a contemporaneous log of date, account, destination and business purpose, which Treas. Reg. § 1.274-5 treats as adequate records.
- A5Advances exceeding substantiated costs must be returned within 120 days after the expense is paid or incurred, and unreturned amounts and personal use of fleet vehicles are included in W-2 wages.
Common pitfalls in biotech & pharma field sales
- Splitting an in-office lunch across two representatives' cards to stay under the per-person cap. Compliance treats this as a serious violation, and it distorts Open Payments data.
- Recording an HCP lunch without each attendee's NPI. Compliance then has to chase the territory months later to report the transfer of value accurately.
- Leaving fleet car personal miles off the log. The value of personal use belongs in W-2 wages, and missing logs make the whole vehicle taxable to the representative.
- Storing samples in a garage or personal storage unit. Unapproved storage breaks sample accountability rules and can damage temperature-sensitive products.
- Ignoring state rules in addition to federal reporting. Several states set stricter meal limits or their own disclosure requirements for representatives working there.
Questions
Divide the total cost, including tax, tip and delivery, by everyone who ate, including the representative. A $286.40 lunch for seven clinic staff and one representative is $35.80 per person. That value is attributed to each covered recipient who ate. Staff who are not covered recipients are still listed but are not reported. Keep the sign-in sheet with the receipt.
No. Meals are reimbursable only when they accompany an educational presentation that the attendees actually receive. Dropping off food for staff who are not present looks like a gift rather than a business meal and is prohibited under this policy. If a clinic declines the presentation, the representative should cancel the lunch rather than leave it.
A fixed and variable rate allowance reimburses vehicle costs in two parts: a fixed amount for insurance, depreciation and registration, and a variable cents-per-mile amount for fuel and maintenance, based on local costs. It can be paid tax-free when the IRS conditions are met and the representative logs business miles. Some regions use it instead of fleet cars to reduce fleet overhead.
Compliance contracts and pays the speaker directly, including honoraria and any travel, and records the full value for Open Payments. Representatives must never pay a speaker's hotel, flight or fee on their own card, even temporarily. The representative's report covers only their own travel and approved program costs, such as the venue and meals within the cap.