COVID-19 has cost us all so much emotionally, physically, and financially. We cannot all be doctors, nurses, or other providers and give immediate care, but everyone who is part of a hospital or healthcare system affects patient care. This educational pathway will help you understand all the ways COVID effects hospital and healthcare systems cost cycle.
Breaking News: COVID-19 Relief Credits May Be Disappearing Without Your Knowledge
Written by: Rob Heminger, President
SpendMend partners with more than 100 healthcare systems spanning over 2700 hospitals across the U.S. In a given quarter, we receive several terabytes of client spend data comprising billions of dollars in transactions while at the same time we are also supporting over 60,000 vendor interactions and touchpoints.
By normalizing, organizing, and analyzing these massive sets of information, we are able to provide our clients an enriched viewpoint specifically related to their position in the healthcare industry. Much of the value we deliver is uncovered from “data pockets” or “themes” that are not easily visible from a client’s perspective. We take pride in shining a light on this “Dark Data.”
In recent months we’ve started to see a new trend arise within the data we are reviewing. A growing subset of vendors are working as best they can with health system procurement departments to make available a wave of COVID-related credits, helping to offset some of the economic pressures being experienced in the market. The credits can be material in nature and the growing trend speaks to the sound partnership established with each health system and its vendors.
The cause of these credits varies widely from the reversal of pre-payments based on under-utilizations, to the re-instatement of suppressed rebates/discounts, to the discovery of hastily-made COVID-related duplicate/overpayments and much, much more. In our observations, there is not one single, predictable process in place to report the diverse set of COVID-related credits. The process is proving inconsistent (and, at times, rushed) across vendors and as such, much of the detail associated with these transactions remains “dark” to our clients. Through our reviews, we have observed that our clients are not always receiving the notification of these credits (into the appropriate departments) and as a result they are frequently not receiving the economic benefit.
The dollar volumes associated with these COVID-19 credits can be significant. In our communication with just one single vendor, we identified over $90 million of credits (all aged over 90 days) which had not yet been realized by the appropriate health systems. In only a few months of monitoring vendor communications across our client base, we estimate that there are, conservatively, hundreds of millions of dollars going unaccounted for between vendors and health systems related to COVID-19.
Outwardly this is a good development for health systems. There seems to be a large correction of credits coming back from vendors related to the COVID-19 challenges. But, due to a lack of communication and standardization (and resources) across the vendor population we are observing that too many health systems are simply not receiving the benefit of these credits and they are either continuing to age on the vendors’ books or they are being used unilaterally by the vendor against open invoices of their choosing. Unfortunately, these invoices may be disputed or the offsetting credit may go unseen until the health system dutifully pays their invoice anyway, thus creating a new credit which is as invisible to the health system as the original COVID-19 Relief credit.
In the month of November, through our investigations and in coordination with vendors, we were able to return over $2 million in unrealized COVID-19 credits – with significantly more returns still under review. Though we have observed that many of these credits exist only in the vendors’ records and are difficult to uncover, we have worked to bring our clients data together with the appropriate vendor to resolve these issues. The vendors are cooperating and are committed to helping the health systems through this crisis. However, the return of these credits remains a difficult task being administered by a group of professionals that are already short staffed and working overtime to keep up with the day to day challenges of payment application. And let’s face it – like many of us, vendors were simply not ready for a project of this magnitude. How could they have been?
Watch
What you will learn from this session
How COVID-19 is affecting your vendors and what that means to you
The increased threat of fraud in your vendor population and how to reduce it
The impact that working from home is having on your ability to manage transactions
The real cost of layoffs and furloughs on your ability to efficiently manage transactions
The most common and costly errors your AP department has made as you’ve rushed to keep up with the demands of COVID-19
What you will get from this webinar:
How to determine exactly what construction contracts to audit
The potential impact of COVID-19 on construction project costs
The five key questions to ask your contractor
The top three techniques for avoiding unnecessary costs in your construction projects
Cases of Vendor Fraud are skyrocketing because of the COVID-19 pandemic.
Is your company protecting itself?
Accounts Payable expert Debra R Richardson, joins Tom Flynn in a discussion about the disturbing trends that companies are facing with regard to vendor fraud and accounts payable fraud.
Debra has over 20 years of experience in AP, AR, GL, financial reporting and more – across multiple F500 companies.
Mary Anne Jones, SVP and CFO of Priority Health joins us for a discussion about the healthcare industry’s ongoing response to COVID-19.
She talks about Priority Health’s preparation for and reaction to the pandemic as well as the importance of her group’s involvement with other community members to make sure all entities can “weather through the storm.”
Mary Anne also discusses her group’s decision to announce giving premium credits back to individual members and small groups who were hit the hardest.
Do you know any children that are dealing with stress and anxiety during the COVID-19 crisis?
Are you worried that your children may be dealing with stress and anxiety, but you’re unsure?
Licensed Clinical Social Worker, Michelle Drago joins us for a discussion about the concerns and questions that young people may be having during the COVID-19 crisis.
Michelle lends her expert opinion but adds that parents and caregivers should seek help from professionals when talking about trauma symptoms and/or if current symptoms feel overwhelming.
Read More From Thought Leaders
.jpg)
An Open Thank You To A Different Kind Of Healthcare Hero
We have heard the brave stories of the doctors, nurses, spiritual advisors, and janitorial staff members standing face-to-face with COVID-19 and its direct impact and we thank them for their courage and efforts, but we also want to thank the unsung and forgotten about members of healthcare.
Thank you to the AP departments for managing the hospital payments and helping keep the vendor relations strong.
Thank you to the finance department for rearranging budgets, managing cash flow and navigating through new complex regulations.
Thank you, Supply Chain, Materials Management, and Procurement for working every avenue to find PPE supplies as well as supplying the hospitals with the normal everyday supplies.
Thank you to the GPO reps for connecting hospitals with suppliers while helping balance required supplies throughout the members.
Many Americans may not know that what you do but we recognize you and appreciate all of your efforts at this time.
We are here to support you and thank you for supporting patient care,
SpendMend
If You Would Like More Information About COVID-19’s Effect On Your Hospital’s Finance Let’s Chat