Contracts Administration
Process Overview
And
Best Practices
March 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
Participants
Group Purchasing
Organization
(GPO – Buying Group)
Customer/Provider
Supplier
(Eligible Entity to receive
pricing)
(Manufacturer of
product)
Distributor
(Wholesaler)
4
Confidential – Property of AmerisourceBergen
C&CB Administration Process Flow
GPO &
Supplier
Supplier
Negotiates
Product and
Pricing Terms
Executes
Contract
Sends
Contract and
Membership
Details
Processes Chargeback
Reimbursement
According to Mfg
System Information
EDI
845
Sends
Credits &
Variance
Reports
EDI
849
EDI
844
Distributor
Loads
Contract
Details Into
System
Sends
Product &
Invoice
Customer
Places
Order
Receives
Product &
Invoice
Confidential – Property of AmerisourceBergen
Submits Sales
Transactions for
Chargeback
Reimbursement
Remits
Payment to
ABC
Receives &
Posts
Supplier
Credits
Reviews Variances
& Determines if
Credit & Rebill is
Required
Issues
Customer
Credit &
Rebill
Receives
Credit &
Rebill
Contracts Administration
Topics
• Contracts Administration Structure
• Customer Onboarding
• Contract Maintenance
• Customer Inquiries
Contracts
Administration
Structure
Contract
Administration
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
Confidential – Property of AmerisourceBergen
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
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
Confidential – Property of AmerisourceBergen
Customer Onboarding Process
•
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
Confidential – Property of AmerisourceBergen
Customer Onboarding Process
•
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
Confidential
– Property
of AmerisourceBergen
Confidential
– Property
of AmerisourceBergen
340B Customer Onboarding Process
New Customer Onboarding Process
•
Contracts Team confirms 340B eligibility and effective date utilizing
the HRSA website

•
Contracts team will validate the HIN for account and coordinate with
Customer Master for loading

•
Contracts Team will validate 340B ID, Address, Naming
Convention and Entity Type
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
Confidential
– Property
of AmerisourceBergen
Confidential
– Property
of AmerisourceBergen
340B Customer Onboarding Process
New 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
Confidential
– Property
of AmerisourceBergen
Confidential
– Property
of AmerisourceBergen
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
Confidential – Property of AmerisourceBergen
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
Confidential – Property of AmerisourceBergen
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
Confidential
Confidential––Property
PropertyofofAmerisourceBergen
AmerisourceBergen
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
Confidential – Property of AmerisourceBergen
Customer Inquiries
Contract Price Research Request Process
(CPRR)
Customer contacts ABC
Customer Care Team to report
a contract price issue
ABC Customer
Care Team
ABC Customer
ABC contacts Supplier
to confirm correct
contract price
Contracts
Department
Dedicated Contract
Staff members review
and address the
inquiry within 4 hours
of receipt!
Closed Stage
ABC Customer
Care Team
Customer Care Team
and/or sales associate
notifies customer of
the resolution
CPRR
Completed Stage
Problem resolution actions
completed within Contracts
Administration
Marks the CPRR
closed
Confidential – Property of AmerisourceBergen
Research Stage
Response to
ABC Customer
Care Team
CR/RB Stage
Credit & Rebill issued to
the customer
Purchase History
Stage
Identification of
invoice lines
requiring credit &
rebill
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
Confidential – Property of AmerisourceBergen
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
Confidential – Property of AmerisourceBergen
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
Confidential – Property of AmerisourceBergen
Best Practices
5. Implementation of websites and portals
6. Daily Chargeback Submissions
Confidential – Property of AmerisourceBergen
A Strategic Approach with Suppliers
Improve
Processes
Improve
Communications
Implement
Technology
Driven Solutions
Confidential – Property of AmerisourceBergen
Eliminate
Unnecessary
Cost
Accountability
Supplier Scorecard
SUPPLIER REPORT CARD
Supplier:
Sample
Q4 - 2015 (October 2015 - December 2015)
Supplier #:
CB Freq.:
Daily
Measurement Frequency:
Ranking Performance
CB Dollar ($) Rank: 3
Quarterly
Quality
Score
10
9
8
7
6
5
4
3
2
1
0
Best In Class
Area For
Opportunity
Actuals
Score
Weight
Weighted Score
Prior Quarter's Score
Vendor A
9100
CB Line Rank: 73
Quarterly Average
Business Process
Quarterly
EDI
Co unt o f Lines
Co unt o f Lines
Co ntract P rice
M embership
CB
with " J" HDM A
Witho ut
No tificatio ns
No tificatio ns
844's o r Excel
Co de
HDM A Co de
(days fro m effect.)
(days fro m effect.)
(Yes / No )
(Yes / No )
0
0
-2
-2
YES
YES
Less than 5
Less than 5
-1
-1
2
6 to 10
6 to 10
0
0
3
11to 25
11to 25
1
1
4
26 to 50
26 to 50
2
2
5
51to 75
51to 75
3
3
6
76 to 100
76 to 100
4
4
7
101to 125
101to 125
5
5
8
126 to 150
126 to 150
6
6
9
151to 175
151to 175
7
7
10
176 & o ver
176 & o ver
8 & o ver
8 & o ver
NO
NO
NO
NO
11& o ver
0
N/A
0
0
YES
YES
YES
YES
3
10
50
500
YES
10
100
1000
YES
10
125
1250
YES
10
100
1000
YES
10
175
1750
0
Peer Scores
Vendor B
7250
Comments: CB Variance:
Contracts:
Membership:
E-File:
Other Comments:
Confidential – Property of AmerisourceBergen
8
175
1400
N/A
1
Vendor C
6525
8
175
1400
1
CB Reco n
Quarterly
Financial
EB A
Daily
CB
CB
P ro cessing
Co llectio n
Co llectio n
(Yes / No )
(Yes / No )
(Daily CB )
(Weekly CB )
YES
YES
1
849's o r Excel 845's o r Excel
N/A
8
100
800
3
Overall Vendor Score
Total Possible
Prior Quarter's Total Score
N/A
9100
10000
8750