pue 'pa^ er^ar 'pararduol are Aaql se paqsrrqnd aq p/\ slrpne asaqr - - PDF document

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SLIDE 1

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SLIDE 3

December 6th, 2016

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SLIDE 4

Agenda

Open Discussion Introductions Presentation BSI Healthcare Services Q & A Audit Results Spend Analytics Vendor Master Analytics Audit Analytics

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SLIDE 5

Company Information

Spectrum Health System Keck Medical Center of USC Baycare Health System Carolinas Healthcare System Tucson Medical Center NYCHHC MERCY (MO) FMOL Health System Beaumont Health System Trinity Health BJC Health Aurora Health

Preferred Service Provider to:

26 Years in Healthcare Procure-to-Pay Consulting/Recovery Auditing 100% Focused on the Healthcare Industry National Service Provider – Over 150 Recurring Clients Customized Audit Methodology – Augmented to client environment Professional Relationships with Key Suppliers 98% Client Retention & Satisfaction Prior History with UPMC

EXPERIENCE HISTORY PARTIAL CLIENT LIST

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SLIDE 6

Capabilities

STRATEGY/SECURITY

Layered Security Protocol $10M Cyber & Network Insurance Policy Ease of data extraction Secure FTP site HIPAA Compliant

TOOLS/CUSTOMER PORTAL

Proprietary Audit Software:

  • Payment error types
  • Price Variance/Contract Compliance
  • Statement Tracking
  • 24/7 Web Portal
  • Claim Detail
  • Claim Summary
  • Claim Status

ERP EXPERTISE

PeopleSoft Lawson Oracle Financials McKesson SAP Homegrown (experience > 60 platforms)

REPORTING/ANALYTICS

4 4 4 4

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SLIDE 7

Audit Process

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SLIDE 8

Section IV

Audit Results

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SLIDE 9

Audit Statistics

Audit Period

March 1, 2014 through December 31, 2015

Recovery

70 Claims - $96,755

Total Payables Audited

$5.9 Billion

Number of Invoices Audited

871,160

Recovery as a Percentage of Payables

.002% (Benchmark .07 to .1%)

Accuracy Rate

99.92%Accuracy (Goal 97.75% or greater)

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SLIDE 10

Recovery Results

$- $5,000 $10,000 $15,000 $20,000 $25,000

1 Claim 22 Claims 13 Claims 19 Claims 4 Claims 2 Claims 3 Claims 2 Claims 2 Claims 1 Claim Invoiced Twice Return Not Deducted Cash on Account Duplicate Payment Pricing Cancelled Contract Credit Paid to Wrong Vendor Credited Invoice Invoice Adjustment Overpayment

$22,500 $20,350 $19,166 $11,792 $8,606 $5,871 $2,437 $1,933 $621 $315

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SLIDE 11

Benchmark

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SLIDE 12

Section IV

Spend Analytics

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SLIDE 13

PO Analytics

2014 2015 2016

$837,109,731 $862,092,274 $200,566,547 $261,702,803 $487,642,103 $139,714,657

PO Spend vs. Non-PO Spend

2014 2015 2016

146,427 152,918 31,577 236,928 239,163 63,827

PO Invoices vs. Non-PO Invoices

38% 61% 62% 26% 74% 36% 41% 59% 64% 39% 33% 67%

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SLIDE 14

Average Days to Pay

May. 14 Jun- 14 Jul- 14 Aug- 14 Sep- 14 Oct- 14 Nov- 14 Dec- 14 Jan- 15 Feb- 15 Mar- 15 Apr- 15 May- 15 Jun- 15 Jul- 15 Aug- 15 Sep- 15 Oct- 15 Nov- 15 Dec- 15 Jan- 16 Feb- 16 Mar- 16 Apr- 16 Harris County 19 21 19 22 20 23 20 24 28 24 22 22 22 26 23 22 25 21 23 26 29 25 22 23 Benchmark 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 5 10 15 20 25 30 35 Days to Pay

Average Days to Pay

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SLIDE 15

Efficiency Report

May. 14 Jun- 14 Jul- 14 Aug- 14 Sep- 14 Oct- 14 Nov- 14 Dec- 14 Jan- 15 Feb- 15 Mar- 15 Apr- 15 May- 15 Jun- 15 Jul- 15 Aug- 15 Sep- 15 Oct- 15 Nov- 15 Dec- 15 Jan- 16 Feb- 16 Mar- 16 Apr- 16 All Credits 27 30 26 30 39 25 27 22 12 11 27 35 57 40 12 29 21 26 28 6 7 11 16 16 Benchmark 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 10 20 30 40 50 60 Days to Enter

Average Days to Recognize Credits

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SLIDE 16

Section IV

Vendor Master Analytics

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SLIDE 17

Active Vendors

Inactive Vendors (System) - 8,873 Active Vendors - Utilized in 18

  • Mos. - 36,062

Active Vendors - No Spend 18

  • Mos. - Multi Use - 913

Active Vendors - No Spend 18

  • Mos. - Single Use - 5,820

Active Vendors - 44,066

51,668 Total Vendors Vendor Master Review

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SLIDE 18

Vendor Scrub

Total Unique Vendors - 20,948 Name - 17,749 (2,015) Address - 7,852 (657) Tax ID - 182 (26) Phone/Fax - 386 (42) PO Box - 692 (104) Department - 14 (1) Potential Duplicate Vendors - 26,875 (2,845 w $0 Spend in last 18 mths)

Vendor Master Analysis

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SLIDE 19

TIN Match Results

TIN and Name combination matches IRS EIN records - 5,887 TIN and Name combination matches IRS SSN and EIN records - 15 TIN and Name combination matches IRS SSN records - 408 TIN and Name combination does not match IRS records - 814 TIN entered is not currently issued - 35 TIN Not Submitted to IRS (Other) - 14 TIN requiring research - 863

TIN Match Results

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SLIDE 20

Section IV

Audit Analytics

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SLIDE 21

Duplicate Payments

23 Claims ~ $37, 430.43

11 Claims 5 Claims 3 Claims 3 Claims 1 Claim Keypunch Error Multiple Vendor Numbers System Override Paid to Wrong vendor Invoiced Twice $7,928 $3,149 $1,916 $4,363 $22,500

Duplicate Payments by Subtype

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SLIDE 22

Duplicate Payments

$- $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 $160,000 $180,000

Keypunch Error Multiple Vendor Numbers System Override Paid to Wrong vendor Invoiced Twice Other Applications $10,665 $9,695 $7,500 $- $- $3,627 Validating $4,604 $574 $- $- $- $1,856 Harris County $50,965 $20,059 $156,233 $- $- $17,425 Claims $17,142 $3,149 $1,916 $4,363 $22,500 $-

Comparison of Duplicate Payments by Resolution Status

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SLIDE 23

Duplicate Payments Benchmark

$749,942 $1,097,675 $656,205 $37,430

$- $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 Company A Company B Company C Harris County

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SLIDE 24

Vendor Returns

LABATT FOOD SERVICE LP - 2 Totaling $2,623 MOTOROLA SOLUTIONS INC - 6 Totaling $3,945 BWI COMPANIES INC - 1 Totaling $12,867 ENNIS PAINT - 1 Totaling $403 HOSE SPECIALTY AND SUPPLY - 4 Totaling $210 CDW COMPUTER CENTERS INC - 22 Totaling $20,350

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SLIDE 25

Cash On Account

Vendor # Vendor Name Claim # Claim Date Count Claim Amount Problem Subtype V00070099 ENNIS PAINT 2869-30 5/26/2016 1 $5,671.78 Incorrect Invoice Number 20729 THOMAS REPROGRAPHICS 2869-31 6/14/2016 1 $735.00 No Remit Information 70981 GREAT SOUTHWEST PAPER CO 2869-39 -48 7/14/2016 10 $12,099.46 Other- Payment outside of data 20544 JOHNSON SUPPLY 2869-90 10/6/2016 1 $660.00 Other- Payment outside of data 13 $19,166.24

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SLIDE 26

Pricing/Contracts

Price Variance

Insufficient data

Local Contracts

Purchasing not involved in audit

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SLIDE 27

Capital Purchases

24 Capital PO’s ~ $52 Million in spend reviewed 15 exact match throughout the process 5 were paid for less than the original quote 4 Other- Part of Multi PO or active PO

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SLIDE 28

Best in Class Recovery Audit

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SLIDE 29

Thank you

Section IV

Recommendations

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SLIDE 30

Recommendations

  • Keying Guidelines and Invoice Approval Process
  • Eliminate Leading Zeroes
  • Spaces and Other Extraneous Characters Eliminated
  • Whenever Possible Generate Purchase Orders Based on Quotes
  • Match Invoices to Purchase Order at Department Level – Potential

Overages Checked against Quote and PO. Validate all Charges

  • Vendor returns module / spreadsheet tracking
  • No System Returns System
  • Document Returns
  • Follow up On Credits Due With In 30 Days
  • Harris County’s stance on Vendor Applications
  • Vendor Applications Should Not Be Allowed
  • All Invoices Should have Approval and Be Reflected in Paid History
  • Take All Validated Credits and Force Vendor to Provide Proof of

Service or Goods.

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SLIDE 31

Conclusion

Thank you for your support of this project. BSI Healthcare looks forward to continuing this successful partnership in the future.

Dan Hutchins, Audit Manager dhutchins@bsihealthcare.com 616-257-6317 Rob Heminger, COO RHeminger@bsihealthcare.com 616-257-6309

29 29 29 29

Joanne Hunsicker, Dir of Strategic Accts JHunsicker@bsihealthcare.com 616-329-9123 Travis Wheeler, Audit Supervisor TWheeler@bsihealthcare.com 616-257-6333

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SLIDE 32

Thank you