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January 24, 2019
Purchase Orders are widely used by hospitals and health systems. To follow best practices, Accounts Payable departments should always use POs to prevent duplicate payments, ensure correct pricing on invoices, and, in turn, save your organization money. When purchase orders are not used correctly, it can cost you. Purchase Order Malpractice: Changing POs to Match Invoices We recently worked with a health system that was in need of a process improvement when it came to purchase orders. They did not have a system in place for Accounts Payable to consistently use POs. As a result, during our Discovery Review, we […]
November 19, 2018
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 […]
October 15, 2018
Duplicate payments are a large issue in most hospital and healthcare systems. As a category duplicate payments make up the third-largest area in TAG’s hospital AP recovery audits. Often “dupe” payments occur through data entry mistakes, or human error. In one example, an invoice number was entered incorrectly, causing a $187,607 duplicate payment when a hospital later re-entered the invoice data correctly and made a second payment. It’s inevitable in manual processes: keying errors will occur. However, these types of errors can be reduced or mitigated by establishing and following standard practices. Six Tips for Hospitals to Reduce Duplicate […]
August 24, 2018
Despite having vendor contracts in place, invoice errors happen. Human error is a part of the business we are in. However, many vendor invoice errors are overlooked during payment processing. This is due to the fact that many health systems do not have a procedure in place for documenting and tracking this error. The Audit Group works with healthcare clients nationwide to develop processes to avoid errors like these. When a Breakdown Happens Imagine a Healthcare system started an agreement with a vendor in November of last year. During the course of the vendor relationship, purchase orders were always issued […]
December 19, 2017
Working in Accounts Payable or Finance, you know it is important to keep your vendors and purchase orders well-organized. This means ensuring that each vendor is identified by a single number. Multiple vendor numbers for a single vendor or partner can cause issues, like duplicate payments. How AP Software Handles Multiple Vendor Numbers Many Accounts Payable software systems have control features that exist to prevent the same invoice from being paid twice. However, this software is unable to recognize when a vendor has been added twice under two different vendor numbers. Because these systems identify the vendor based on the […]
December 4, 2017
In any Accounts Payable department, you may run into open-ended purchase orders. Especially in a major healthcare system, open-ended purchase orders are problematic because they prevent ERP systems from identifying overpayments or flagging duplicate invoices for review. Avoid these issues with open-ended purchase orders by putting effective purchasing controls in place and carefully processing each invoice by your system’s standard. Open-Ended Purchase Orders Cause Overpayment for a Health System During a recent audit, TAG worked with a large healthcare system to find overpayments and lost funds. We uncovered that the system had an open-ended purchase order with Johnson & Johnson, and […]
November 2, 2017
At a large health care system, there are many individual contracts and pricing agreements – both directly with vendors and through group purchasing organizations (GPOs). This can be complex, and it takes a team commitment to avoid overcharges by entering contracts quickly and accurately. Three Step Process for Favorable Pricing Making sure that a hospital or health system pays the correct price for every order and contract requires a standard procedure. The Audit Group recommends a three-step process each time a contract is entered: Determine the correct price and most favorable terms before an order is placed Create accurate purchase orders that reflect […]
