Major health systems have many departments that all have to work together seamlessly. A lack of departmental communication is inefficient and can lead to lost funds or overpayments.

Contracts and maintenance agreements are renewed annually, or in some cases even less frequently. Because of all of the complexities of a healthcare organization’s day-to-day, Accounts Payable is not always alerted when changes are made during a contract’s renewal. If these changes are not clearly communicated, agreements may be overpaid or credits may be missed.

When Lack of Departmental Communication Causes Problems

Recently, a major healthcare system entered into a new service agreement with an existing vendor, terminating a portion of their parent contract. However, the Accounts Payable department was not alerted to these changes to the parent contract.

During our Discovery Review, the Audit Group uncovered that the lack of departmental communications caused Accounts Payable to continue paying for the terminated software and maintenance agreements. TAG contacted the vendor, who delivered a total adjustment of $286,900 that was credited back to the system.

TAG’s Departmental Communication Tips

We’ve heard it time and again: communication is key. Follow our tips below to save frustration, time, and money while improving inter-departmental communication.

• Establish open and frequent dialogue between Accounts Payable and other departments
• Hold each department accountable for updating the Purchasing and Accounts Payable departments on any new, modified, or terminated contracts and agreements
• Do not establish service agreements or lease Purchase Orders to run longer than one year

If your organization is feeling the effects of a lack of departmental communication, it’s time to make a change. The Audit Group can help you uncover and recover any lost funds from these inefficiencies, and we can help you grow your team’s leadership and communication. Learn more about The Audit Group’s Leadership Coaching service, and schedule your team’s communication development session.