Revenue Enhancement through Rebate Process Improvement: Part 2

Optimal Stage

The most common issue experienced is overbilling with many industry factors being the cause. The most prevalent form of overbilling comes from incorrect invoice data. Performing manual and automated validations are the most effective way to find, reject, and correct these errors.

A typical checklist of validations might proceed as follows:

  • Import into a revenue management system
  • Evaluate detail data to find ineligible plans, incorrect NDCs, ad outdated products.
  • Discard and exclude the above data from rebate payment.
  • Conduct aberrant quantity check.
  • Cross-examine the units against the Rebate Days’ supply.
  • Send request to customer to make the appropriate changes to units not consistent with the correct unit of measure (UOM).
  • Check submitted Prescription ID for validity and run against a list of all valid pharmacies.
  • Evaluate the formularies to determine whether plans are matched to the correct tier.
  • Run a duplicate check to identify data that appears more than once in the current file or any preceding quarters.

Figure 2 below depicts a real example of how a manufacturer appropriately optimized their invoice validation and rebate payments. Although invalid lines can be corrected and resubmitted, the manufacturer has visibility to the rejections and can estimate submissions based on behavior patterns of their customers.  This process allows utilizing dollars for an additional quarter to their advantage rather than prematurely paying an inflated rebate amount.

figure 2

Savings and Continuous Improvement

Quarterly trackers and dashboards, for example, allow data to be collected and measured against performance metrics in real time. Data from submissions and settlements provide useful statistics when properly leveraged. The fuel for continuous process improvement is to properly manage company growth; the insight gained from the available data provides the needed tools.

New contracts, products, and revised payment terms can significantly alter the way a company operates. Successful adaptation to these changes means continuous savings. Failure results in substantial and often unrealized losses.

Figure 3 below presents another real example of validating incoming invoice data excluding a large sum from a quarter of paid rebates. Manufacturers can preserve revenue on a continuous basis each quarter by employing these process techniques.

figure 3

Effective revenue management is about ensuring that optimal controls are in place. Maintaining status quo is easy, but it comes at the expense of ignoring process shortcomings that erode Organizations often miss the opportunities to improve their processes and incur revenue leakage. Therefore, it is critical to determine its place in the rebate processing lifecycle. Exploring the associated optimization strategies initiates growth in a way that is both measured and proactive, augmenting efficiency while yielding significant bottom line results.

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