Written by: Rob Heminger, President

SpendMend partners with more than 100 healthcare systems spanning over 2700 hospitals across the U.S.  In a given quarter, we receive several terabytes of client spend data comprising billions of dollars in transactions while at the same time we are also supporting over 60,000 vendor interactions and touchpoints.

By normalizing, organizing, and analyzing these massive sets of information, we are able to provide our clients an enriched viewpoint specifically related to their position in the healthcare industry.  Much of the value we deliver is uncovered from “data pockets” or “themes” that are not easily visible from a client’s perspective.  We take pride in shining a light on this “Dark Data.”

In recent months we’ve started to see a new trend arise within the data we are reviewing.  A growing subset of vendors are working as best they can with health system procurement departments to make available a wave of COVID-related credits, helping to offset some of the economic pressures being experienced in the market.  The credits can be material in nature and the growing trend speaks to the sound partnership established with each health system and its vendors.

The cause of these credits varies widely from the reversal of pre-payments based on under-utilizations, to the re-instatement of suppressed rebates/discounts, to the discovery of hastily-made COVID-related duplicate/overpayments and much, much more.  In our observations, there is not one single, predictable process in place to report the diverse set of COVID-related credits.  The process is proving inconsistent (and, at times, rushed) across vendors and as such, much of the detail associated with these transactions remains “dark” to our clients. Through our reviews, we have observed that our clients are not always receiving the notification of these credits (into the appropriate departments) and as a result they are frequently not receiving the economic benefit.

The dollar volumes associated with these COVID-19 relief credits can be significant.  In our communication with just one single vendor, we identified over $90 million of credits (all aged over 90 days) which had not yet been realized by the appropriate health systems.  In only a few months of monitoring vendor communications across our client base, we estimate that there are, conservatively, hundreds of millions of dollars going unaccounted for between vendors and health systems related to COVID-19.

Outwardly this is a good development for health systems.  There seems to be a large correction of credits coming back from vendors related to the COVID-19 challenges.  But, due to a lack of communication and standardization (and resources) across the vendor population we are observing that too many health systems are simply not receiving the benefit of these credits and they are either continuing to age on the vendors’ books or they are being used unilaterally by the vendor against open invoices of their choosing.  Unfortunately, these invoices may be disputed or the offsetting credit may go unseen until the health system dutifully pays their invoice anyway, thus creating a new credit which is as invisible to the health system as the original COVID-19 Relief credit.

In the month of November, through our investigations and in coordination with vendors, we were able to return over $2 million in unrealized COVID-19 relief credits – with significantly more returns still under review.  Though we have observed that many of these credits exist only in the vendors’ records and are difficult to uncover, we have worked to bring our clients data together with the appropriate vendor to resolve these issues.  The vendors are cooperating and are committed to helping the health systems through this crisis.  However,  the return of these credits remains a difficult task being administered by a group of professionals that are already short staffed and working overtime to keep up with the day to day challenges of payment application.  And let’s face it – like many of us, vendors were simply not ready for a project of this magnitude.  How could they have been?

For more details on COVID-19 Relief Credits and for help ensuring you are aware of any monies your health system may be owed, please reach out to a SpendMend representative and we can help you to understand which of your vendors are likely candidates for these credits; how much is potentially available; and what steps you need to take to realize the credits.