Commercial Contracts & Chargeback Management

Transcription

1 Commercial Contracts & Chargeback Management Optimize Data Sets for EDI Procedure Improvements - Maximize EDI for Chargeback Processing June 22, 2015

2 Legal Disclaimer The information contained in this presentation and during the course of this work shop is for the general education and knowledge of the attendees. The opinions expressed herein are personal to the panelists and do not necessarily represent the opinions and/or policies of Fresenius Kabi USA LLC or Indivior.

3 Workshop Agenda EDI History & Overview EDI Datasets Networking Break (30 minutes) EDI Metrics & Monitoring EDI Set Up EDI use in Chargeback Processing Interactive Polling Questions

4 EDI Overview EDI : Electronic Data Interchange communication method defined by standard layouts for exchanging data via electronic means Over 300 EDI transactions typically grouped together in the following categories All EDI transactions must conform to the American Standard Code Information Interchange {ASCII} format

5 EDI History Origins date back to 1960 s Ed Guilbert, aka Father of EDI initiates first transmissions to send cargo information first EDI messages are send from Holland-America steamship to trans-atlantic steamship 1968 Transportation Data Coordination Committee {TDCC} is formed to oversee standardization of EDI transmissions 1975 TDCC releases the first EDI standards 1978 TDCC is renamed to Electronic Data Interchange Association and charter taken over by the American National Standards Institute {ANSI} 1981 ANSI releases EDI standards for transportation, food, drug, warehouse and banking industries 1985 UN creates the EDIFACT EDI standards to assist with global transmissions 1991 Estimated 12,000 US companies using EDI Source:

6 EDI Overview EDI Manufacture- Customer Benefits : Competitive advantage during contract negotiations Reduction of data entry error Decrease of inventory on-hand levels Shorten ordering cycles Faster payment processing

7 EDI Overview Other Common Data Sets

8 EDI Overview Data Sets 844: Product Transfer Account Adjustment sales transactions reported by wholesalers/distributors for manufacturer product end sales. 845: Price Authorization Acknowledgment/Status WAC and indirect contract pricing updates between manufacturer and wholesalers/distributors. Data set includes contract ID, product pricing, effective and end date, along with reason code. 849: Response to Product Transfer Account Adjustment manufacturer response to wholesaler/distributor for rebate request. Data set includes contract ID, credit/debit memo number submitted, credit/debit memo number issues, rebate amount, adjustments issued and reason code for non-payment and/or adjustments

9 EDI Overview Chargeback Cycle 845 Contract Pricing Manufacturer to Customer 30 Days Prior to Effective Date 849 Credit/Debit Memo Response to 844 Manufacturer to Customer Daily/Weekly delivery 844 Sales for Rebate/CBK Customer to Manufacturer Weekly/Bi-weekly delivery

10 Break Time

11 EDI Metrics EDI Utilization standard wholesaler/distributor manufacturer set-up includes 844,845,849. Automation of these transactions increases accuracy for processing, financial reconciliations and supports resolution of customer disputes EDI Cycle Time potential to reduce rebate processing by up to 50% EDI Line Rejections reduction of line rejections by up to 75%

12 EDI Monitoring EDI Data Quality can be evaluated by the number of line rejections and value of credit/debit memos processed when compared to the 844 requested values EDI Validation of Claims 844, 852 and 867 transactional data can be linked to internal contract administration systems and/or ERP systems to verify internal records versus customer data.

13 EDI Metrics EDI 867 vs. EDI 844 comparative analysis can be derived from the data sets to. Evaluate Sales and Demand Forecasts Estimate potential Product Returns Project Chargeback/Rebate Liabilities

14 Establishing EDI Processes Data Exchange Set Up Testing

15 Data Customer DEA, HIN, 340B Account Hierarchy and linkage (Sold to / Ship to / Bill to) COT Product / Material NDC UOM Contract Internal vs. external reference numbers Membership Validity period Notification requirements

16 Exchange Set Up Mapping Data identification EDI segment identification Translation / Validation Format verification Duplicate checks Communication Direct vs. Indirect

17 Testing Resources / Expertise EDI Source system IT Business 3PL Scenario Identification Documentation Cross-Functional Team Partnership Commitment Resource allocation (people, time, systems)

18 EDI Disconnect Risks Data is not captured (sent or received) as expected Negative pricing Negative EDI849 credit (how is debit defined) UOM Volume Analysis How often, how many files, how many transactions System configurations Communication EDI vs. vs. telephone Defining and establishing service levels

19 EDI Communication Protocols EDI Protocol FTP FTPs sftp AS1 AS2 AS3 Protocol Definition File transfer over TCP based network such as the internet FTP with encryption protocols TLS or SSL FTP with "Secure Shell" security protocols EDI data encapsulated within MME messages EDI over the internet (HTTP) with encryption EDI over the internet (FTP) with encryption

20 EDI Overview Chargeback Cycle 845 Contract Pricing Manufacturer to Customer 30 Days Prior to Effective Date 849 Credit/Debit Memo Response to 844 Manufacturer to Customer Daily/Weekly delivery 844 Sales for Rebate/CBK Customer to Manufacturer Weekly/Bi-weekly delivery

21 Primary Chargeback EDI Files EDI845 Bid Award Notification Contract products, pricing and customers Manufacturer to Wholesaler EDI844 Chargeback Credit Request End user details Wholesaler to Manufacturer EDI849 Reconciliation Report Denial/Discrepancy detail Manufacturer to Wholesaler

22 Chargeback Error Codes HDMA Code A2 - Line Item Too Old AA - Contract Number Missing BB - Contract Number Incorrect CC - Contract Expired DD - Contract Not Yet In Force EE - Invoice Date Missing or Invalid FF - Customer Not Covered GG - Customer Expired HH - Customer Not Yet Eligible II - Customer Referenced ID Missing Error Definition Line Too Old External Contract Missing External Contract Invalid External Contract Expired External Contract Not Yet Active Invalid Invoice Date Customer Not Eligible on External Contract Customer No Longer Eligible on External Contract Customer Not Yet Eligible on External Contract Ship To Customer Missing JJ - Customer Referenced ID Invalid Customer Not Found KK - Drug Not Covered Product Not Eligible on External Contract LL - Drug Expired Product No Longer Eligible on External Contract MM - Drug Not Yet Eligible Product Not Yet Eligible on External Contract NN - Drug Number Missing or Invalid Invalid Product OO - Wholesaler Not Covered Trading Partner Not Eligible to Service External Contract RI - Invalid Resubmit Number Original Line Not Found (only applies to EDI resubs) RR - Quantity Invalid or Not Supplied Invalid Quantity SS - Contract Price Missing or Incorrect Customer Price Not Supplied TT - Contract Price Inserted or Corrected Contract Price Corrected VV - Unit Cost Inserted or Corrected Unit Cost Price Corrected XX - Extended Amount Corrected Chargeback Amount Corrected YY - Duplicate Chargeback Request Duplicate Line

23 Confusion / Miscommunication BB contract incorrect Incorrect vs. different Cherry Picking Incorrect vs. Data corrections JJ customer id invalid Invalid vs. Data corrections Invalid vs. Conflicting business practices TT / VV / XX price corrections Many wholesalers do not review these errors if discrepancy value is $0.00

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25 Questions?

26 Contact Information Marijo G. Bustos Manager, Chargebacks, Fresenius Kabi USA, LLC Lenis DeLeon Commercial Contracts Contractor, Indivior