May 17, 2022

Why your Health System Needs a Contract Repository

Thousands of suppliers are actively utilized in every health system often managed by a limited amount of staff. That’s why organizations must create a centralized contract repository in order to properly manage their contracts and set their Supply Chain up for automation and success. What is a contract repository? A contract repository is simply a central location housing all vendor contracts a health system uses. As a core component of a successful contract management system, the repository must collect and consolidate ALL contracts including local and GPO contracts. The system containing the repository must be able to store the data […]
January 14, 2019

Are You Managing Your Purchasing or Allowing Vendors to Manage It?

Hospital purchasing contracts exist to protect an organization’s funds by clearly defining suppliers’ terms. Not having a contract on a regularly purchased item can lead to higher pricing, as one of our hospital clients discovered after a vendor rep left.   The hospital had a verbal agreement with the manufacturer’s representative for textile products, which were purchased through a distributor. After the rep left the company the distributor began charging the hospital the manufacturer’s list prices because it had no vendor agreement for the rep’s discounted pricing. Since the hospital also lacked a contract in its system for the discounted […]
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 […]
December 13, 2018

Excessive Freight Costs Can Be Missed on Capital Equipment

Medical equipment for hospitals and healthcare systems can range from a small needle to an enormous MRI machine. Shipping such heavy equipment incurs large freight costs for hospitals. Without foresight or proper monitoring, excessive freight costs can be mistakenly approved for payment. For example, during a recent Discovery Review, we identified that a health system paid $28,000 for freight on operating room equipment when the actual freight charge was $11,000. Causes for Incorrect Freight Charges In the case of the health system that we worked with recently, it all came down to the payment policy. This health system allowed freight […]
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 12, 2018

Contact Pricing Isn’t Always Guaranteed

We’ve said it time and time again–it pays to review your invoices even when you’re under a contract. Human error and software error often create higher invoices that are passed along to hospitals and paid before any catches the issue. The Audit Group’s Mike Dean recently encountered an error in which our client’s item pricing was tripled halfway through a two-year contract. Take a look at how we caught the error and saved them more than $200,000. Contract pricing almost always benefits the hospitals, but only if they’re receiving the agreed-upon price. Trust The Audit Group’s trained healthcare auditors to […]
August 22, 2018

Keep Tabs on Your Contract Pricing

In theory, contracts should always save your hospital money. However, we often see instances where health systems enter into a multi-year contract with a vendor and simply trust that they will receive the contract price, every time. We recently conducted a pricing review for one of our clients and noticed that one item’s price had incorrectly spiked and cost them nearly $375,000 overtime. Contracts offer convenience and savings for health systems across the country, but they aren’t foolproof. Human error, as well as computer errors, may still disrupt your item pricing and negatively affect your organization’s cash flow. Contact The […]
Keep Tabs on Your Contract Pricing
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