Integrated Vendor Management
Mayo Clinic
Rochester, Minn.
Mayo Clinic is a nonprofit, worldwide
leader in medical care, research and
education for people from all walks of life.
Every year, more than 1 million people
from all 50 states and nearly 150 countries
come to Mayo Clinic for care. The health
system includes more than 58,000 doctors,
nurses, scientists, students and allied
health staff at locations in the Midwest,
Arizona, Georgia and Florida.
Global Edge, Mayo Clinic’s integrated
vendor management provider, licenses
intellectual property from Mayo Clinic
in regard to the development of holistic
solutions for vendor authentication,
corporate card audit and recall
management processes.
History
Mayo Clinic takes a proactive approach to managing its suppliers within its supply chain
processes. Stephanie Matejka, senior manager, Mayo Clinic Supply Chain Management, said,
“We needed to streamline and better manage our organizational risk, and that required a
unique approach to set a standard for risk mitigation and supplier management.”
Mayo Clinic was in search of a holistic approach to supplier data management. The purpose
for this initiative was multifaceted:
~~Improve compliance with regulatory agencies
~~Help to automate manual processes
~~Reduce risk of duplicate payments and fraud
~~Create a supplier scorecard that would collect data from multiple sources
~~Provide a single view of the supplier relationship/performance
~~Reduce operating costs
The master data management role in health care organizations has historically been a
data entry-type role. This creates limited compliance, risk and tax reporting checks. While
vendors are reviewed at the time of set-up and annually for sanction checks, other change
requests are only as needed and based on a user request. At no time is the entire vendor
set-up reviewed again. In addition, the vast majority of vendor add requests are after a
product or service has been purchased, which is contrary to knowing who you are doing
business with prior to establishing a relationship with the vendor.
Mayo Clinic found that their current process did not contain controls or the right procedures to:
~~Check on routine contracted vendors prior to vendor add
~~Validate tax reporting on vendors
~~Check on former Mayo employees set up as contract vendors or employed with a
contractor without going through the HR review and approval process
~~Validate vendors through the authentication process
©2014 VHA Inc. All rights reserved.
“Increased governmental regulations have placed more ownership on the
buying organization to ensure that those they do business with are licensed
and credentialed, and our Integrated Vendor Management Process helps
to ensure that Mayo Clinic has all relevant information to make informed
business decisions and reduce risk.”
Stephanie Matejka
Senior Manager
Mayo Clinic Supply Chain Management
~~Place controls on being able to prevent new vendor set-up
(if needed) to enforce a vendor formulary
~~Helps to track minority suppliers
~~Creates internal efficiencies
~~Drive the correct process, eliminate duplicate work and identify
the process owners
The solution was to build a tool based on a new business concept
that aggregates previously unseen synergies that add value and
operating efficiencies for health care organizations. It combined
currently disparate processes, practices and technologies to come
up with an integrated solution for risk management, including but
not limited to: vendor credentialing, fraud detection, continuous
monitoring of vendor master file, Office of Inspector General
sanctions, electronic payments, product safety recalls, and
accounts payable audit recoveries.
Solution
The creation of a Web-based vendor registration process is now in
place. It requires that companies be registered and authenticated
in order to do business with Mayo Clinic. The online platform
validates vendors’ information against more than 250 data points,
including third-party databases and public record, and then
delivers a comprehensive risk assessment.
“This process provides Mayo Clinic with the sense that the vendor
is a responsible, legitimate company, with a history of legal and
ethical behavior,” Matejka said. The process also:
~~Helps reduce the risk of fraud
~~Validates the company’s tax ID for Internal Revenue Service
reporting compliance to ensure appropriate 1099 reporting
~~Verifies that the business is sound and that the company is
Today, by having suppliers complete the vendor registration
process, Mayo Clinic is better able to manage segments of its
vendor population that have a higher level of risk. Of the total
population invited to participate in the vendor authentication
process, approximately 38% have completed the process and of
that, 1.6% have been escalated for further review. As a direct result
of this process, Mayo Clinic has suspended business with vendors
that have not met the criteria.
In addition, Mayo Clinic’s vendors are able to receive electronic
payments, along with the associated remittance information.
“Our vendors receive their funds more quickly, and it reduces the
number of checks that we print, thus reducing costs,” Matejka said.
Due to Mayo Clinic’s desire for a holistic approach to vendor
management, it uses the same supplier for accounts payable
audit recovery, contract compliance and e-notices to vendors
containing remittance advice. The approach allows one supplier to
help manage the data that give Mayo Clinic insight into an entire
relationship with a vendor—something that through disparate
systems is difficult to manage.
Mayo Clinic is also actively working with the supplier to bring a
corporate card audit and recall management tool into the suite
of services to enhance the offering. Global Edge, Mayo Clinic’s
integrated vendor management provider, licenses intellectual
property from Mayo Clinic in regard to the development of holistic
solutions for vendor authentication, corporate card audit and
recall management processes.
solvent.Ensures regulatory compliance by verifying that the
vendor is not on any of the 50 federal or state sanction lists
For more information, please contact VHA at
800.842.5146 or vhacustomerservice@vha.com.
©2014 VHA Inc. All rights reserved. Mayo Clinic and inventors have a financial interest in this technology.