Contracts and pricing and compliance, oh my

Contracts stressing you out?
Check out the video below!

This is the latest post from The Revitas Exchange.

For those of you who manage pricing and reimbursement processes for life sciences or manufacturing and technology companies, chances are you feel overwhelmed from time to time (probably an understatement!).

The stress of processing every claim invoice -- they seem to come in droves -- ensuring timely and accurate payments, and maintaining compliance with applicable government programs can be a lot to handle. And the impact of even the smallest mistake can snowball into more serious consequences like long-term revenue leakage or penalties for non-compliance.

So, you know, no pressure.

The good part? There IS a solution. I’d like to tell you about it the best way I know how: in song.

Top ways pharma manufacturers lose money to dirty data

How much dirty script-level
data could be costing you

Managed care rebates are paid out based on data that can hide costly prescription-level inaccuracies and errors. And for most pharmaceutical companies, manual validation systems and processes that cleanse script-level data ultimately fail.

Mismanaged script-level validations can lead to lost revenue due to overpayments, duplicate payments, and ineligible payments. Even standard validations, such as time validations, pharmacy identity, aberrant quantities, duplicates, and coordination of benefits, when routinely missed can cause revenue loss.

The amount of revenue loss can vary greatly, but large pharmaceutical manufacturers have identified upwards of $35 million annually that may be recovered by implementing more robust systems for script-level data validation.

Revitas University Q&A: Why online learning is the backbone of corporate training

The benefits of online training

One of the biggest challenges to employee training is skill and knowledge retention. Just because you've explained a particular function of your contract management solution doesn't mean your employees will be able to draw on that information three months down the road when they actually have to apply it on the job. Truly effective training and educational resources go beyond time in the classroom.

When we launched Revitas University last year, Anneliese McArthur explained how the online learning and resource portal would help Revitas clients more effectively utilize their Enterprise Revenue Dynamics solutions, at a much lower cost than traditional on-site training. This week, we’re providing an update from Anneliese about the program, how we’re evolving our offerings, and how they map to the up-to-the minute needs of Revitas customers.

Lise Neely: Anneliese, as Dean of Revitas University, you’ve developed a training and education system that delivers sessions where and when Revitas clients need them. Why is online, on-demand learning such an important part of corporate training?

Anneliese McArthur: Corporate training has evolved tremendously in the past twenty years and even in the past five years. Over the decades, what employees want and how they learn have changed. As the baby boomers like you and I received training, we only had access to lecture-based, classroom sessions. We took our training for an hour or so a day, and then we went back to our “real” jobs in the hopes of applying what we learned.

ACA in 2013: 340B Integrity Provisions

This blog post is the third post of our ACA Compliance in 2013 series and this week’s Revitas Exchange post.

The mandatory credit or refund process
of 340B: What you need to know

There's no shortage of noise and speculation about how the Affordable Care Act (ACA) will ultimately be felt and managed by life sciences manufacturers. Will CMS actually come through with a final rule in August? What impacts will healthcare exchanges have on the contracting landscape? How will Accountable Care Organizations impact the structure and effectiveness in contracting?

Recognizing all of these and other variables that will (we hope!) be borne out over the coming months, one of the areas that will pose significant challenges and is unlikely to change dramatically from current understanding is the expansion of 340B. In short, the ACA expands the types of entities under the program to include certain children's hospitals, critical access hospitals, freestanding cancer hospitals, rural referral centers, and sole community hospitals (as long as they exceed Disproportional Share Hospital percentages for their type of facility). The net of this is that somewhere in the area of 1,500 new facilities will be eligible to participate in the 340B program.

The power of 3: Study on value of contracts, pricing, and compliance

New report: The power of contract,
revenue, and compliance management

Last week I talked about the upcoming release of a research study by a leading industry analyst firm, showcasing the results of a commissioned survey of manufacturing and technology executives. Now the wait is over. I invite you to download and read “The Power of Three: The Benefits of an Integrated Approach to Contract, Revenue, and Compliance Management.”

The study, conducted by Forrester Consulting on behalf of Revitas, explores how the management of sales contracts, pricing incentives, and promotions impacts the effectiveness of channel partner relationships in the manufacturing and technology industries.

The survey results echo the key insights that Revitas has developed from working with finance, sales, and channel management executives in the manufacturing and technology sectors:

May’s can’t-miss trade shows

Revitas's May events

Right now Revitas is at the NCPDP Annual Technology and Business Conference in Phoenix, connecting with a network of innovators in healthcare. Through May 9, our representatives will be at booth #207 discussing contracts, pricing, and compliance solutions for healthcare systems.

May is another busy month for us! In addition to the NCPDP conference, we’ll be at the following events:

• CBI 15th Annual Medicaid and GP Congress: May 14-16, 2013 (Lake Buena Vista, Fla.)
• SAPPHIRE NOW and ASUG Annual Conference: May 14-16, 2013 (Orlando, Fla.) 
• ISPOR 18th Annual International Meeting: May 18-22, 2013 (New Orleans)
• The Heartland Oracle Applications Users Group: May 31, 2013 (Omaha, Neb.)

The power of ERD: Don’t just take my word for it

Upcoming study: The strength of ERD

At Revitas, we understand that the value of integrating contracts, pricing, and compliance is undeniable. Organizations that incorporate ERD into their core business strategies dramatically reduce revenue leakage, improve channel effectiveness, create impactful incentives, and ensure compliance with commercial, government, and financial regulations. But don’t just take my word for it.

In a few days, a leading industry analyst firm is releasing a study, commissioned by Revitas, showcasing results from manufacturing and technology companies that were surveyed about their contract, revenue, and compliance management strategies.

Financial accruals: Who’s impacted and how

Tips for financial accrual calculations 

Financial accruals can be a big headache for any company. Regardless of industry, many organizations have to pay rebates to their distributors and customers, making financial accrual calculations a necessary evil to corporate finance teams.

I recently had the opportunity to chat with Jim Burke, Senior Vice President of Contracting and Pricing Solutions at Alliance Life Sciences -- a Revitas business partner. Jim and I talked about the challenges facing CFOs and other corporate finance executives as they navigate the complexities of the financial accruals process. You can read his insights on the process, including the challenges and tips for solving them in the Q&A below:

Lise Neely (Revitas): Financial accruals are top of mind for corporate finance teams today. Why are accruals so difficult to manage, and what bad things can happen if you get it wrong?

Jim Burke (Alliance Life Sciences): Well, financial accruals are an important part of compliance with GAAP standards. You’re setting funds aside to cover the financial obligations associated with sales, from things like promotional programs, rebates, and discounts. They’re hard to manage because the data for each kind of program lives in different places within an organization. So you have to gather the data associated with, say, co-pay programs, direct rebates, and chargebacks, and then figure out how much to set aside based on your past history and future projections.

3 reasons why growing companies should focus on contract management

Why contract management is essential
for emerging life sciences companies

The mantra for all emerging growth companies ought to be “an ounce of prevention is worth a pound of cure.” The reality for many small to mid-size companies is that corporate success can come with some pretty significant growing pains. And for life sciences companies where growth can occur more rapidly than in almost any other industry, the accompanying growing pains can be even more intense.

The good news is that there are ways to alleviate some of the pains of rapid growth -- the biggest way being preparation. By creating an infrastructure that can scale to accommodate rapid growth long before it’s fully needed, your company will be well on its way to weathering the storms that may come with expansion.

A great place to start in building infrastructure is contract management. It might seem like a minor area now. After all, you might not even have that many contracts right now, but don’t underestimate its importance to your business. This often overlooked area, relegated to a purely administrative function, is really the linchpin for almost every area of commerce. Contracts govern both the sales and procurement sides of business and manage the formal exchange of assets and services with trading partners, involving thousands or even millions of dollars.