Vendor contract enforcement is a quagmire for hospital management teams, especially in bill-only implant surgeries. Hospitals and supply chains are spending an increasing amount of time negotiating contracts with vendors. These contracts are designed to enhance quality of care, while controlling costs. When this happens, everyone from the hospital to the patient benefits.
The current process, however, impedes vendor contract enforcement. It is heavily dependent on multiple stakeholders, including providers, implant manufacturers and vendors, operating independently to plan, manage, bill and track bill-only implant surgeries. Case preparation, usage recording, reconciliation and billing activities are mostly handled manually and thus highly labor intensive.
This hinders the ability to proactively enforce vendor contracts, which, in turn, is leading to increased costs as reimbursements continue to decline. Issues with product and pricing do not come to light until after the surgery. And then it is too late – especially when a product has not been pre-approved for use and has been implanted in a patient.
To bring visibility and transparency to the process, implant utilization and their cost should strictly follow the provider’s/vendor’s negotiated contract, product code and the case implantation record.
So how do you make this happen?
The Surgery Exchange Solution
Vendor contract enforcement and compliance needs to occur at three key junctures during the case lifecycle and process flow.
- When the case is first scheduled;
- During surgery; and
- After surgery.
Hospitals that have deployed Surgery Exchange, a HIPAA-compliant, cloud-based platform, are able to facilitate compliance by bringing all stakeholders into a collaborative environment to manage and maintain the integrity of vendor contracts. For example:
When a case is first scheduled: Vendors are electronically notified of their cases and must register the products they intend to take to the operating room. Surgery Exchange identifies products that are “not on contract” and it is requested by the hospital that the vendor’s sales representative not bring the product(s) to the operating room.
However, if a product is needed for the surgery but identified as “not on contract,” it is forwarded to the contract administrator for review and action. Because Surgery Exchange captures clinical notes, documentation and images, the contract administrator or implant coordinator has the information needed to:
- Approve for this case (only);
- Approve and add to the hospital vendor contract;
- Approve and add to the hospital system vendor contract; or
- Reject the item.
These actions are clearly documented and readily available for review.
Vendors are also informed of case changes and can adjust the list of products being brought to the operating room before the surgery.
During surgery: In the operating room, it is sometimes discovered that there needs to be a product change to ensure the best outcome possible for the patient. Through Surgery Exchange, those items are accurately documented, identified and shared with the contract administrator. The operating room staff and/or the vendor may also check a product through the software platform to determine if it is on contract before implantation.
After surgery: Pricing and usage compliance is easily identifiable. The billing coordinator can determine if a product that is “on contract” has been priced according to the terms of the provider contract – or if an item “not on contract” has been utilized in a surgery.
Once the billing coordinator approves the billing details, Surgery Exchange automatically converts the manufacturer item numbers to their equivalent hospital financial codes and provides the priced transaction to the hospital’s financial system to obtain a purchase order number. The purchase order is then electronically delivered by Surgery Exchange to the vendor. This ensures usage is priced in accordance with the vendor’s contract and remains consistent throughout the process.
Data Normalization: Maintaining Integrity in Vendor Pricing
Manufacturers often use many different forms for identifying an item. For example, in some cases the manufacturer may include or ignore leading zeroes and/or include or exclude symbols, such as dashes and dots. On the surface, it can appear that the different identification forms refer to different products, when in reality, they correspond to the same product.
Surgery Exchange normalizes the item numbers to match the way they are recorded in the vendor’s contract. This helps maintain integrity in vendor pricing.
By normalizing captured usage to the vendor’s contract regardless of how it is being used, data is homogeneous such that it can be analyzed and reported consistently without the need for manual intervention and clean up.