Alexandria, VA, June 24, 2021 - In a step toward greater pricing alignment throughout the healthcare supply chain, a new toolkit was introduced today that offers a standard format for group purchasing organizations to receive administrative fees from their contracted supplier partners.
This new template is the result of a 2-year pilot project involving distributors, manufacturers, and GPOs. It is designed to communicate GPO administrative fees using a standard spreadsheet offering clearly defined fields.
Distributors and manufacturers may both pay administrative fees to GPOs based on sales for contracted products. Calculating and reporting these fees can be a complex, time-consuming process for the suppliers, because each GPO has traditionally asked for different data in different formats.
“This new toolkit will help improve pricing accuracy by encouraging all GPOs to accept one format for administrative fee reports, rather than each requesting sales information from suppliers using different formats. Adopting a standard will create efficiencies for contracted suppliers to create the reports and for GPOs to process them, thereby removing operational costs for these organizations,” said Melanie Proctor, Sr. Director, Supply Chain Master Data Management, Premier. Proctor is a member of the GPO Administrative Fee Reporting Workgroup and was the lead for the pilot.
The 12 organizations who participated in the pilot say they are currently spending about one full day a month organizing administrative fees. “We have relationships with 18 GPOs and each month we have to generate about up to 12 different formats for reporting,” said participant Jim Burns, Regional Sales Manager with HD Supply. “It will be immensely helpful when we can move to one thanks to this new toolkit.” Burns is also a member of the GPO Administrative Fee Reporting Workgroup.
This new standardization was unveiled at the Health Industry Distributor Association’s Contract Administration Conference, an annual working event driving standardization and best practices in pricing accuracy.
The Health Industry Distributors Association (HIDA) represents the country’s medical product distributors – the nation’s essential link between manufacturers and patient caregivers. HIDA members offer critical services increasing the efficiency of U.S. healthcare providers, including hospitals, nursing homes, laboratories, home care, and physician practices. For more information, visit HIDA.org.