COVID-19 relief credits may be disappearing without your knowledge.
From the reversal of pre-payments based on under-utilizations, to the reinstatement of suppressed rebates/discounts, to hastily-made COVID-related overpayments - there are several purchasing scenarios that can make procurement and finance teams uneasy. It begs the question: how are you actively managing credit recovery with your suppliers?
Let's dive deeper.
In recent months, SpendMend, an AP Audit and Recovery firm, has developed significant insights into this arising trend in the space of provider-supplier relationships and payments.
By normalizing, organizing, and analyzing massive sets of purchasing information, health systems can get an enriched viewpoint specifically related to their position in the healthcare industry. Shedding light onto dark data can uncover "data pockets" on spend recovery opportunities.
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.
Despite suppliers' well-intentioned outreach to resolve, these credit communications are failing to get to the proper department. As a result, these organizations are frequently missing out on the economic benefit.
“There seems to be a large correction of credits coming back from vendors related to the COVID-19 challenges," says Rob Heminger, President at SpendMend. "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 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.”
The dollar volumes associated with these COVID-19 credits can be significant. For example, more than $90 million in credits have been identified for a large health system with a single vendor.
SpendMend reports an estimate of, conservatively speaking, 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 1. simply not receiving the benefit of these credits and they are either continuing to age on the vendors’ books or, 2. they are being used unilaterally by the vendor against open invoices of their choosing.
While vendors are actively cooperating and are committed to helping the health systems through this crisis, the return of these credits remains a difficult task being administered by a group of professionals that are overwhelmingly too short-staffed to keep up with the day-to-day challenges of payment application.
Written by: Rob Heminger, SpendMend President
At SpendMend, we strive to help hospitals improve patient care through the delivery of innovative cost savings solutions, insightful transaction analysis, and improved visibility across business relationships. In the last month, we have helped return more than $2 Million in COVID-19 credits to their customers.
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.