September 10, 2019

Five Reasons to Perform a Vendor Master Cleanse

On average, health systems work with over 27,500 vendors at a given time with seven percent of those vendors changing their name, affiliation, or standing on an annual basis. With such a large number and variability of vendors, managing vendor data can quickly become cumbersome for an organization’s Accounts Payable (AP) department creating exposure to payment errors, fraudulent charges, and risk of noncompliance. To minimize these risks, AP departments or the parties responsible for the vendor master must keep their master file current and free of errors by performing a vendor master cleanse and maintain the file on a quarterly […]
December 20, 2018

Five Tips for Better Managing Office Supply Contracts

The best way to manage office supply contracts is before they’re signed. Once a contract is approved and signed, trying to protect against fund loss through overcharges and unnecessary price increases is complicated. Recovering losses—which can be hundreds of thousands of dollars in larger hospitals—is a laborious, yet necessary process. A Process for Managing Office Supply Contracts Defending against fund loss should start before the contract is approved. The following process can help ensure your organization does not lose funds on routine contracts, like those for office supplies. Survey the Purchasing department to identify what items departments are buying before […]
November 19, 2018

Challenge Vendors on Invoice Discrepancies to Avoid Lost Funds

Healthcare systems can lose funds when potential invoice discrepancies aren’t investigated in a timely manner. In a recent Accounts Payable recovery audit TAG reviewed invoices spanning three years for a Northeastern U.S. healthcare system. We identified potential overcharges of approximately $71,900 by a large medical products distributor. At the time, some of the potential overcharges were almost four years old. The distributor refused to research invoices and payments prior to that year, which resulted in significantly fewer potential fund recoveries for the healthcare system. However, the vendor offered a partial settlement for the potential overcharges. In total, the distributor proposed […]
September 26, 2018

Effective Payment Optimization Can Add Millions in AP Savings

Over the past decade, we’ve seen a growing trend of accounts payable departments investing in technology and innovative process improvements to increase efficiency and reduce costs. Healthcare leaders are demonstrating they can save significantly on their overall AP spend, thus shifting the perspective that support organizations must be cost (not profit) centers. Unfortunately, many of the traditional investments and improvements in supplier payments fail to realize optimal savings potential. Recently, while analyzing large healthcare organization’s cash flow and payment processes, we discovered an innovative approach to payment optimization that quickly and easily maximizes savings potential without disruptive change to existing […]
August 24, 2018

Ignoring Invoice Discrepancies Can Lead to Financial Loss for Health Systems

Despite having vendor contracts in place, invoice errors happen. Human error is a part of the business we are in. However, many vendor invoice errors are overlooked during payment processing. This is due to the fact that many health systems do not have a procedure in place for documenting and tracking this error. The Audit Group works with healthcare clients nationwide to develop processes to avoid errors like these. When a Breakdown Happens Imagine a Healthcare system started an agreement with a vendor in November of last year. During the course of the vendor relationship, purchase orders were always issued […]
August 15, 2018

Creating the Correct Payment Process for Your Health System

Healthcare systems have hundreds of individual contracts and pricing agreements to manage during any given billing cycle. Despite the best efforts of purchasing and pharmacy departments, difficulties often arise in ensuring accurate prices are paid for on all products and services. Contract overcharges, discrepancies between PO and invoice terms, duplicate vendor payments and other issues are common among health systems without proper payment processes in place. The Correct Payment Process To ensure your health system is paying the correct amount for every order involves following a three-step process: Determine the correct price and most favorable terms before the order is […]
April 10, 2018

Understanding Contract Overpayments

Lately, we’ve been outlining the importance of vendor management for your health system and the risks associated with poor vendor management. In our experience, some of the faulty processes in the procure to pay process come from contract overpayments. This can lead to overpaying for certain items and restricting your system’s cash flow. What are contract overpayments? It’s common for health systems to negotiate contracts with vendors to receive a set price on an item for a set amount of time. A contract overpayment is when, for a number of reasons, an invoice is created and paid for a higher […]
Understanding Contract Overpayments
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