Contracts Administration Process Overview And - … Administration Process Overview And Best...

Contracts Administration

Process Overview

And

Best PracticesMarch 24, 2016

Dina Barton, Director of Contracts Administration

Agenda

• Industry C&CB Process Flow

• Contract Administration

Structure

Customer Onboarding

Contract Maintenance

Customer Inquiries

• Best Practices

INDUSTRY

C&CB PROCESS FLOW

4

Participants

Group Purchasing Organization

(GPO – Buying Group)

Customer/Provider(Eligible Entity to receive

pricing)

Supplier (Manufacturer of

product)

Distributor (Wholesaler)

Confidential – Property of AmerisourceBergen

C&CB Administration Process Flow

GPO &

Supplier

Supplier

Distributor

Customer

Negotiates

Product and

Pricing Terms

Executes

Contract

Sends

Contract and

Membership

Details

Processes Chargeback

Reimbursement

According to Mfg

System Information

Sends

Credits &

Variance

Reports

Loads

Contract

Details Into

System

Sends

Product &

Invoice

Submits Sales

Transactions for

Chargeback

Reimbursement

Receives &

Posts

Supplier

Credits

Reviews Variances

& Determines if

Credit & Rebill is

Required

Issues

Customer

Credit &

Rebill

Places

Order

Receives

Product &

Invoice

Remits

Payment to

ABC

Receives

Credit &

Rebill


EDI

844

EDI

845 EDI

849

Contracts Administration

Topics

• Contracts Administration Structure

• Customer Onboarding

• Contract Maintenance

• Customer Inquiries

Contract Administration

Confidential – Property of AmerisourceBergenConfidential – Property of AmerisourceBergen

Contract Administration &

Operations Support

• Membership Administration

• Pricing Management

• Problem Resolution

• Root Cause Analysis

• Supplier Business Reviews

• Mail Room

• Indexing

• Purchase History

• Credit / Rebill

• BPM System Admin

Strategic Customer Account Support

• Customer Relations

• Formulary Pricing Management

• Customer Reports

• Contract Inquiry Resolution

• Special Projects

• Customer Business Reviews

Contract Auditing & Compliance

• Customer Audits

• GPO Audits

• Supplier Audits

• SOX Compliance

Systems Support and Solutions

• Supplier EDI Technology

• Exception Processing

• System Support Analysis

• SAP System Testing

• Policies and Procedures

• Training

Contracts Administration Structure

Customer Onboarding Process

• New Customer Agreement is executed

• Customer will provide biographical data and additional information as

required

• Customer Master Team will establish Account number

Biographical Data

Agreement details

Identifier (DEA, HIN, 340B ID)

• Credit Application provided and Credit Check performed

• Compliance review



• ABC’s Sales/Customer Master Team notifies ABC Contracts Team of a

New Customer

• Documents required by Legal for new Customers to access contract

pricing:

1. GPO Declaration Form

– Customer indicates their primary GPO

– Contains “Own Use” statement

– The form must be signed by the Customer

2. Onsite Visit Form

– ABC sales rep will perform an on-site visit to confirm customer’s

site is consistent with the Class of Trade declared

– The form is signed by the ABC Account Manager


• Contracts Team confirms class of trade and effective date with the

GPO

• Customer’s account number is attached to the appropriate GPO base

contract

• Suppliers are contacted for new customer’s Tier and Committed

contracts and attached accordingly

• Contract restrictions are applied as directed by the Supplier

• ABC requests 30 – 45 days lead time to obtain the appropriate

eligibility from the Supplier

This timeframe begins once the Customer is loaded to a GPO

specific base contract





New Customer Onboarding Process


340B Customer Onboarding Process

• Contracts Team confirms 340B eligibility and effective date utilizing

the HRSA website

Contracts Team will validate 340B ID, Address, Naming

Convention and Entity Type

• Contracts team will validate the HIN for account and coordinate with

Customer Master for loading

If a HIN is not currently available, a request is submitted to HIBCC

• Customer’s account number is attached to a specific 340B Base

Contract based upon Entity Type


New Customer Onboarding Process


340B Customer Onboarding Process

• Contracts Team confirms Apexus Prime Vendor eligibility and

effective date utilizing the Apexus website and roster information

• Customer’s account number is attached to specific Apexus Base

Contract if applicable

• Suppliers are contacted for new customer’s 340B Tier and

Committed contracts and attached accordingly

• ABC requests 30 – 45 days lead time to obtain the appropriate

eligibility from the Supplier

• 340B Account Change and Termination review performed weekly

Contract Administration Process

• ABC maintains the SAP contract price system utilizing supplier

notifications

Exceptions

– Internal Generic Contracts

– VA/DOD/Government

• Supplier contract changes are received by ABC via:

▲ EDI (Electronic Data Interchange)

– 80% of changes are received electronically

– Updates are immediately processed into SAP

– Changes occur throughout the day

▲ E-mail

– 10% of changes are uploaded via excel file received from suppliers

– 10% of changes are processed manually


Contract Administration 340B Process

• Quarterly price changes are requested from suppliers 45 days prior to the

start of the new quarter

• Contracts Monitored and tracked until receipt

• Credit and rebills are requested for any changes received and loaded

after the effective date


Contract Administration EDI Process

• Suppliers send price and membership changes to ABC via an EDI 845

transmission

• Changes are systematically applied to the SAP Contract System upon

receipt

• EDI exceptions are reviewed and addressed accordingly

▲ Contract Not Associated

▲ EDI IDOC Failures


Contract Administration Non-EDI Process

Suppliers send price and membership changes to ABC via email

E-mail documents are received directly into BPM system

Documents are indexed into the Contract repository

The BPM system routes documents to the assigned Contract Analyst

Contract Analyst updates the contract system or uploads the excel file



ABC Customer ABC Customer Care Team

Contracts Department

Research Stage

Response to ABC Customer

Care Team

Purchase History StageCR/RB StageCPRR

Completed Stage

Closed Stage ABC Customer

Care Team

Customer InquiriesContract Price Research Request Process

(CPRR)

Dedicated Contract

Staff members review

and address the

inquiry within 4 hours

of receipt!

Customer contacts ABC

Customer Care Team to report

a contract price issue

ABC contacts Supplier

to confirm correct

contract price

Identification of

invoice lines

requiring credit &

rebill

Credit & Rebill issued to

the customer

Problem resolution actions

completed within Contracts

Administration

Customer Care Team

and/or sales associate

notifies customer of

the resolution

Marks the CPRR

closed

Best Practices

Contract Price Administration Challenges

Why do customers receive incorrect contract pricing?

• ABC does not receive change notification from the Supplier

• ABC does not receive change notification from the Supplier timely

(rec’d on effective date or later)

• Data Entry errors by ABC Contract staff

• Unit of measure conversion

• Expire or restrict item pricing

• Changes not entered by effective date

• Other Challenges

• Eligibility criteria per Supplier

• Supplier system conversions


Best Practices

1. Effective Communication

Establish points of contact

Engage partners in new contract strategies, system changes,

and process improvement initiatives

Respond timely to inquiries

Hold meetings as needed


Best Practices

2. Contract notification provided to Distributor prior to

effective date

3. Utilize C&CB EDI transaction sets

Contracts Transaction EDI 845

Chargeback Transaction EDI 844 and EDI 849

4. Utilize Excel files to communicate contract changes if

EDI is not available


Best Practices

5. Implementation of websites and portals

6. Daily Chargeback Submissions


A Strategic Approach with Suppliers

Improve Processes

Eliminate Unnecessary

Cost

AccountabilityImplement Technology

Driven Solutions

Improve Communications


Supplier Scorecard


SUPPLIER REPORT CARD

Supplier: Sample Q4 - 2015 (October 2015 - December 2015)

Supplier #: 3 73

CB Freq.: Daily

Measurement Frequency:

Ranking Performance

Count o f Lines Count o f Lines Contract Price M embership CB CB Recon EBA Daily CB CB

with "J" HDM A Without Notifications Notifications 844's or Excel 849's or Excel 845's or Excel Processing Collection Collection

Score Code HDM A Code (days from effect.) (days from effect.) (Yes / No) (Yes / No) (Yes / No) (Yes / No) (Daily CB) (Weekly CB)

10 Best In Class 0 0 -2 -2 YES YES YES YES 1

9 Less than 5 Less than 5 -1 -1 2

8 6 to 10 6 to 10 0 0 3

7 11 to 25 11 to 25 1 1 4

6 26 to 50 26 to 50 2 2 5

5 51 to 75 51 to 75 3 3 6

4 76 to 100 76 to 100 4 4 7

3 101 to 125 101 to 125 5 5 8

2 126 to 150 126 to 150 6 6 9

1 Area For 151 to 175 151 to 175 7 7 10

0 Opportunity 176 & over 176 & over 8 & over 8 & over NO NO NO NO 11 & over

0 N/A 0 0 YES YES YES YES 3 N/A

10 8 8 10 10 10 10 8

175 175 175 50 100 125 100 100

1750 1400 1400 500 1000 1250 1000 800

0 N/A 1 1 YES YES YES YES 3 N/A

Overall Vendor Score 9100

Vendor A Vendor B Vendor C Total Possible 10000

9100 7250 6525 Prior Quarter's Total Score 8750

Comments: CB Variance:

Contracts:

Membership:

E-File:

Other Comments:

Weight

Weighted Score

Prior Quarter's Score

Peer Scores

Quality Business Process EDI Financial

Actuals

Score

CB Dollar ($) Rank: CB Line Rank:

Quarterly Quarterly Average Quarterly Quarterly

Contracts Administration Process Overview And - … Administration Process Overview And Best...

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