By Jim Fedele, CBET
Recently I was surprised by an email I received from our accounting department. It seems that one of our OEM “partners” sent them $31,000 worth of invoices to be paid without any purchase orders or authorization. I immediately picked up the phone and called my hospital accounting representative for the details of the situation. After many hours of investigation, I am finding out that our OEM “partners” are charging us for every minute past our contract coverage time. It seems that due to the use of technology they have found a way to automatically bill for labor indiscriminately based on when the field service rep clocks in and out of our facility. To me, this feels a little dishonest, although “technically legal.” It certainly is not the way to help health care facilities reduce costs.
This situation did catch me by surprise. I feel my team keeps my well informed of situations that costs us additional money. So, imagine how I felt when I received an email from accounting asking me to approve 10 invoices for a total of $31,000. The person from accounting was very nice in her request, she said “Hey Jim, I have been trying to get these invoices paid and have not had any luck, since you seem to know everyone can you help?” Of course, I said yes. I have always tried to maintain a good rapport with our accounting and finance people. Having them as allies helps solve a lot of potential problems. As I started my investigation, I found out early that most of the invoices did not involve my people at all. That fact made me feel a lot better about the situation, which meant I did not have a system problem or a breakdown in communication.
I needed to completely understand the reasons for the invoicing. I reached out to the service manager and asked for the associated service reports for the invoices. After receiving the information, I was even more confused. The dollar amounts did not match invoices. Also, the start and stop times did not makes sense. Eventually, after repeated requests and continued confusion, I built a spreadsheet and asked the service manager to populate the missing and confusing information. Finally, at this point, I was able to analyze what was going on.
I found that the majority of the invoicing occurred days after the equipment had been installed. After a discussion with the radiology supervisor, I found out that the equipment had ongoing problems after the install. Apparently, the installation company had serious issues installing the equipment but felt they “had all the bugs worked out.” However, that was not accurate. The unit continued to have problems that resulted in several days of repairs by the field service team. The charges were for labor after our 9-5 coverage time.
With this new information in hand, I requested clarification about these issues from the service manager. Given that we spend about $1.5 million in service coverage with this company, I truly felt we were being nickeled and dimed to death. My requests had seemingly been ignored. It was at this point that I informed the CFO of the situation and he quickly escalated the request for me. When I spoke to the service manager, he really did not have any good answers about why we were being charged for the issues that occurred after the new equipment was installed. I waited weeks waiting for them to “look into it” for the invoices that contained after hours labor, he explained that their “system” automatically bills for every 30 minutes passed the contractual coverage time.
At this point, I quizzed the service manager about how the process should work moving forward. He agreed that in most situations we should not be billed for work that ended past coverage hours unless they are requested to continue. I told him it feels like the automatic billing occurs intentionally so we will just pay it without question. He denied that that was the intent, but did admit that all credit requests had to go through him before being issued. I continued to explain to him that the process seems disjointed and that we would need to fill in the gaps so we are not continually billed for work given the amount we were already spending with them. He eventually did agree with me and promised to rectify the situation and has since written off the charges.
I have spent a significant amount of time trying to resolve this. I feel like I got the run around. My advice to readers is this – make sure that you are reviewing invoices for repairs on equipment under contract and warranty. Many field service reps are now using electronic devices to open and close work orders in real time. This creates an opportunity for the OEM to bill for every minute past a contracted coverage time. You also should be aware that most warranties only provide coverage from 9 a.m. to 5 p.m. unless negotiated otherwise.
Jim Fedele, CBET, is the senior director of clinical engineering for UPMC. He manages six Susquehanna Health hospitals. He has 30 years of HTM experience and has worked for multiple service organizations. The views expressed here are those of the author and do not necessarily represent or reflect the views of TechNation or MD Publishing.
