With the complex network of pricing structures at hospitals, purchasing departments may have difficulty ensuring all products and services are accurately paid for. A single health system may have hundreds of individual pricing contracts and agreements, both directly with vendors through a GPO. With all of the confusion that can arise, it is important for Accounts Payable to look into items not linked to contracts to ensure accurate pricing and avoid overcharges.
Making sure a hospital pays the correct price on every invoice involves a three-step process:
During a recent health system audit, TAG identified monthly overcharges on ICU medical items purchase through Medline. After the initial payment was made, the vendor established a new, higher price for the item —without notifying the health system.
Due to the discrepancy, the health system paid multiple invoices with pricing nearly $50 above the established pricing terms. The Accounts Payable department did not research the vendor’s pricing, even though it differed from the purchase orders.
The monthly overcharges continued until TAG relinked the item to a contract price. Due to this discovery during the audit, Medline credited a total of $13,800 back to the health system.
With the complexities of a major health system’s vendor and contract management, sometimes a third-party assessment can help uncover opportunities for growth. TAG’s Discovery Review and health system audit can ensure that your organization is on the right track and not leaving money on the table. Contact us to learn more about the problems we solve for Accounts Payable departments.