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GPO Contract Management and Validation

Every GPO agreement is a promise Finance has to keep, and report on.

One record for every GPO and payer agreement, invoices and chargebacks validated before they are paid, and member and fee reporting built from the contract itself.

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The problem

Contracts drive the Gross-to-Net number directly.

Commercial GPOs aligned with the PBMs invoice on utilization that is aggregated across plans and often a quarter or more old. Traditional GPOs independent of the PBMs depend on rosters that change constantly, and wholesalers honor their pricing through chargebacks. When Finance cannot see the terms, it cannot accrue against them, and the true-up carries the surprise.

How GPO agreements flowTwo lanes. In the first, the manufacturer pays formulary rebates and administrative fees to a commercial GPO aligned with the PBMs, which passes them through the PBM to plan sponsors, while utilization data and rebate invoices flow back, aggregated across plans and often a quarter or more behind. In the second, the manufacturer provides contract pricing and administrative fees to a traditional GPO independent of the PBMs, with sales reports the GPO passes back to its members, while member rosters, eligibility and tier elections flow back to the manufacturer. In the third, a wholesaler sells to members at the GPO contract price and submits a chargeback claim to the manufacturer, which checks it against contract terms and the member roster before crediting the difference. COMMERCIAL GPO · ALIGNED WITH THE PBMS Formulary rebates and administrative fees ManufacturerCommercial GPOPBMPlan sponsors Utilization data and rebate invoices, aggregated across plans and often a quarter or more behind TRADITIONAL GPO · INDEPENDENT OF THE PBMS Contract pricing and administrative fees, with sales reports the GPO passes back to its members ManufacturerTraditional GPOMembersHospitals, health systems and clinics Member rosters, eligibility and tier electionsCHARGEBACKS · HOW THE CONTRACT PRICE IS HONORED Manufacturer Wholesaler MembersBuying on GPO contract Credit for the difference Chargeback claim Sells at contract price Each claim is checked against contract terms and the member roster before it is credited

Scroll sideways to see the whole diagram.

Three lanes: commercial GPOs aligned with the PBMs, traditional GPOs independent of them, and the chargebacks that honor the contract price.
Contract management is not administration. It is the source record for the accrual.

What we deliver

The contract record, validated and reported from the source.

01Contract repositoryEvery GPO and payer agreement in one catalog: tiers, eligibility, fees, rate history and owner.
02Invoice validationRebate invoices checked line by line against contract terms before they are paid.
03Chargeback validationEach chargeback checked against contract terms and the member roster before it is credited.
04Member and fee reportingAdministrative fee and sales reports built from the contract record, with audit evidence.

Where it applies

The exits it works, and when.

10 Exits of Therapy™

01Diagnosis
02Provider Access
03Prescription Creation
04Enrollment
05Coverage
06Authorization
07Affordability
08Fulfillment
09Patient Engagement
10Therapy Initiation

Product Lifecycle Phases

Phase 1 · Pre-Launch and Launch ReadinessPhase 2 · Launch and Early CommercializationPhase 3 · In-Market OptimizationPhase 4 · Lifecycle and Loss of Exclusivity

From the work

Where this came from.

Advisory engagement

In-Market Revenue Leakage Diagnostic

Volume that was not translating into return, and contracting that was never tested for what it paid for.

Read the use case →Key concept

Government Pricing Is No Longer a Calculation. It Is a Transaction.

The federal discount is moving behind the dispense, and the claim becomes the transaction.

Read on patrickrcoyle.com →