Invoice errors happen. It’s a part of the business we are in. However, in healthcare, vendor invoice errors may be overlooked during payment processing. In fact, many health systems may not have a procedure in place for documenting and tracking these errors or the credits issued to correct them. The Audit Group works with healthcare clients nationwide to develop processes to avoid errors like these.
We recently worked with a client to discover that McKesson had issued two invoices for the same software and maintenance charges. Both invoices were subsequently paid – all against the same capital purchase order. McKesson recognized the duplicate billing of $8,104. This canceled one payment but left the second payment unapplied to the account.
When vendor invoice mistakes go unrecognized, it can cause trouble for everyone. If invoice payment processing is done using service, capital, and blanket purchase orders, these errors can be easy to miss.
In a recent Discovery Review, The Audit Group discovered a vendor invoice error by Standard Textiles Company for “Safety Stock.” This was paid against a service purchase order. To correct the mistake, the vendor issued a credit to the health system, but the $101,832 credit was never entered to be deducted.
A TAG client received an invoice issued by National Hospital Specialties with an incorrect lot number. This invoice was paid against a blanket purchase order. The vendor realized the error, and issued credit and a second invoice, with the lot number corrected. However, only the invoice was paid against the same blanket purchase order, leaving the $4,757 credit unapplied to the account.
Continue reading for more TAG Tips on Healthcare Processes.