BLOG
July 3, 2018
As we’ve discussed, no purchasing department is immune to human error. During the course of normal operation, a health system is bound to overpay for an item here or there. However, we see all too often cases where these errors add up over time, costing the system thousands in lost revenue. At The Audit Group, we perform detailed pricing reviews to identify areas of overpayment, as well as pricing claims to route those funds back to the hospital. How TAG Conducts A Pricing Review To begin a pricing review, our team will receive a data download from the health system: […]
February 9, 2018
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: Determine the correct price and most favorable terms before an order is placed […]
September 7, 2017
At any large healthcare system, vendor rebates can be difficult to manage. Because they require a multi-step process to track dollars earned, credits issued, and monies paid, rebates cause tracking challenges for Accounts Payable departments. Rebates Versus Lower Contract Pricing Oftentimes, vendors use rebates as a key part of their pricing strategy and structure. This tactic makes their pricing more attractive to potential clients. When tracked through Accounts Payable and issued correctly, rebates can help healthcare organizations save some money. That being said, inconsistent tracking is the primary problem with vendor rebate programs. Some vendors pay rebates via check refunds, […]
August 8, 2016
Issues: Many vendors offer cash discounts for invoices paid within a set number of days Payment terms may not be communicated to AP resulting in invoices being paid in full within the cash discount period Example: A vendor offered a 3% discount for invoices paid within 90 days Several invoices paid within 30 days, but the system did not apply the discount TAG contacted the vendor to request credit for missed discounts Vendor confirmed credit and agreed to deduct 5 months of discounts from the system’s next check run TAG Tips: Give highest priority to invoices offering cash discounts for […]
