Pricing Accuracy Initiative Takes Major Step Forward at New Conference

 

Making sure you’re paying the right price for medical products probably is a big headache for your organization. The huge number of contracts and tiers coupled with ongoing changes make it hard to ensure your invoice prices are always what you expect them to be.

Your manufacturer and distributor partners feel the pain too. That’s why the Health Industry Distributors Association (HIDA) launched its Pricing Accuracy Initiative – to improve contracting efficiency and to reduce mistakes and rework throughout the healthcare supply chain.

The initiative, started in 2013, took a big step forward at HIDA’s first ever Contract Administration Conference in Orlando, Fla., in May. The meeting brought together more than 120 suppliers, GPOs, solutions providers, and healthcare providers seeking new ways to improve pricing management processes. Throughout the event, industry experts offered ideas for improving contract administration processes. Speakers emphasized the importance of adopting data standards, improving communications between trading partners, and providing ample notification in advance of contract activations.

HIDA Pricing Accuracy Initiative Imperatives: Automation Push for 100% electronic transactions. Redesign any process that cannot be automated. Standards Standardize processes for information-sharing. Support GS-1 standards adoption for customer and product identification. Timeliness Commit to contract negotiation deadlines that allow timely notice and implementation of contract changes to all parties.

Important points raised at the conference included the following:

• All contract-related communications should be electronic: Ideally, 100 percent of communications and transactions should be transmitted either via EDI (electronic data interchange) or standard Excel/CSV file formats. “In a six-month period, our Medical-Surgical contracts team receives more than 3,000 contract communications via email text, PDF, or Word document,” said Justin Bowers, McKesson. “If we can standardize our processes and formats for receiving this information, it will become much easier to avoid many of the issues we face on a daily basis.”

• Customer identification standards are needed: Manufacturers and distributors have entire teams of people devoted to contract communications, and participants said these teams spend too much time trying to figure out what customer they’re talking about – for instance, determining whether the “St. Mary’s Hospital” in a particular spreadsheet is the same as “St. Mary’s Healthcare” on a different sheet. Many healthcare leaders believe industry-wide adoption of Global Location Numbers (GLNs) would eliminate most of this confusion and allow companies to identify, capture, and share vital information. A joint HIDA/GS1-US Price Accuracy Initiative Workgroup is currently developing a proof of concept to confirm whether GLNs can serve as standard customer identifiers to enhance financial transactions between distributors, manufacturers, and GPOs.

• Timely notification is crucial: Late contract notifications cause price mismatch errors and rework, conference attendees noted. During roundtable sessions, participants agreed providing timely contract change notice allows everyone involved to load accurate pricing and eliminate potential discrepancies. Attendees pointed to timelines laid out in HIDA’s white paper, Improving Pricing Accuracy: Best Practices in Contract Administration, and encouraged consistent adherence to these standards.

Providers play an important role in improving contract and pricing accuracy, said Derek Stewart, Adventist Health System. Stewart described how his organization rolled up its sleeves with trading partners to clean up its pricing data and improve processes for sharing information. Deb Templeton, Geisinger Health System, and Joe Dudas, The Mayo Clinic, both gave keynote addresses on ways to drive healthcare supply chain transformation through a mix of collaboration, adaptation, data standards, and flexibility.

These providers offered their support for HIDA’s overall Pricing Accuracy Initiative and echoed sentiments shared by supplier trading partners. “Now that we have our foot on the pedal,” said Nancy Montemarano, BD, “we need to start pushing.”

To learn more details about the conference, and to access HIDA’s free white paper, visit www.HIDA.org/ContractAdmin.