In your Pharmacy Department, you may use vendor-maintained ordering systems to purchase products. Many major health systems do. However, it’s imperative that your Accounts Payable department does not create purchase orders based on vendor-maintained data. Instead, develop a process and educate your purchasing agents on your ERP system.
When purchase orders are created using vendor-maintained data, the healthcare system is left with little control over pricing and payment. All PO-related pricing data and other terms and conditions of purchase are controlled by the vendor in this instance.
By relying on vendor-maintained data, typical vendor-client checks and balances are lost. Further, errors generated by this process can be missed by Accounts Payable.
In a recent Discovery Review, The Audit Group uncovered major issues for one healthcare system. When placing an order for a pharmacy product, the organization’s purchasing agent would use McKesson’s operating system, McKesson Connect.
McKesson Connect has a feature that would create both the purchase order and an invoice. This made the transaction totally reliant on McKesson – the vendor- for accurate pricing information.
Because typical checks and balances were not in place, TAG’s analytical software was able to identify more than $99,350 in overcharges to the pharmacy. The Audit Group’s analysts were able to successfully recover the lost funds, and the healthcare organization will no longer use the McKesson operating system for order placement.
Are you wary of your vendors’ ordering processes? A simple Discovery Review with the Audit Group can uncover lost funds, and our expert process engineers can help you develop a seamless ordering process for your health system. Contact us to get started.