Bill-only and rebate terms, in everyday words
Definitions of 31 words that come up when implants are billed after the case and when supplier rebates are calculated, checked and collected. Each links to the page on this site that covers it in more depth.
Bill-only and implants
Words from the operating room and the purchasing that follows it, where the implant is used first and bought afterward.
- Bill-only
A way of buying an implant after it has been used. The product reaches the operating room with the supplier’s rep or from supplier-owned stock, the surgeon uses it, and only then does the hospital raise the order the supplier bills against. Item, price and quantity are all settled after the patient has left the room.
- Consignment
Supplier-owned stock kept on the hospital’s shelves. The hospital pays only for what is used, and the supplier then replaces it. Items used from consignment are ordered after the case, much like bill-only.
- Loaner trayAlso called loaner set
A set of instruments, often with implants, that a supplier lends for a particular case or type of procedure. It arrives before surgery, the hospital processes and sterilizes it, and it goes back afterward. Implants used from it are billed after the case.
- Trunk stockAlso called rep-carried stock
Product a vendor rep carries and brings to a case, rather than stock the hospital holds; the name comes from the rep’s car. What is used is billed afterward, usually as bill-only, and nothing is restocked.
- Physician preference itemAlso called PPI
A product chosen largely by the individual surgeon or physician, such as an orthopedic implant, a cardiac device or spinal hardware. These items are costly, clinically sensitive and hard to standardize, which is why their contracts often ask for a share of the category rather than a volume.
- Construct or capitated pricingAlso called capitation or bundled implant pricing
One agreed price for a defined set of implants used together in a procedure, instead of a price for each part. The flat price holds whatever mix of covered parts is used, so a request has to show which lines the construct covers and which fall outside it.
- Wasted, or opened but not implantedAlso called waste-only or open-not-used
An implant that was opened for a case but never went into the patient: dropped, contaminated, the wrong size or no longer needed. It is recorded apart from what was implanted, with a reason, and the contract should say who pays for it.
- Explant
A device removed from a patient, for example because it failed, was recalled or reached the end of its life. When the replacement comes with a manufacturer credit, Medicare rules can require the hospital to report that credit on its claim, so an explant needs following from the case to the credit memo.
- Requisition and purchase orderAlso called PO
A requisition is the internal request to buy something. A purchase order is the hospital’s commitment to the supplier, created from an approved requisition, usually in the ERP. For bill-only items both are written after the case, and the supplier invoices against the purchase order.
- Lot number and serial number
A lot number identifies a batch of products made together; a serial number identifies one individual device. Recording them for each implant is what lets a recall, a warranty claim or an explant be traced to the right patient and invoice.
- Unique device identifierAlso called UDI
The code the FDA requires on most medical device labels, usually printed as a barcode. A fixed part names the maker and the model; a variable part can carry the lot, serial number and expiry date.
Implant Control records the lot and serial number on each request line as they are entered. It does not scan barcodes or read UDIs.
- Surgical case recordAlso called case record or implant log
What the operating room documented about a surgery in the electronic medical record: the surgeon, the procedure, the date and the implants and supplies used. It is the independent account a bill-only request can be checked against.
- Duplicate case
Two or more bill-only requests that point at the same surgery. Some are legitimate, because several suppliers served the same case; others bill the same implant twice. Counting quantity across every request on the case tells the two apart.
Supplier rebates
Words from supplier agreements and the work of calculating, checking and collecting what they promise.
- Retrospective tierAlso called retroactive tier or first-dollar tier
A ladder where reaching a higher tier pays that tier’s rate on every eligible dollar in the period, back to the first. Crossing a threshold lifts the rebate on everything already bought, so the last purchases before it can be worth far more than their own value.
- Stepped tierAlso called incremental tier or marginal tier
A ladder where each rate applies only to the dollars inside its own band, the way income tax brackets work. Crossing a threshold raises the rate on the next dollars, not on the ones already bought.
- Growth rebate
A rebate that pays for buying more than a baseline, such as last year’s purchases or a figure written into the contract. How the baseline is set, and how it moves when a facility joins or leaves, decides most of the outcome.
- Market scope
The written definition of which products make up the market for a share commitment: a product class, a spend category or a named product list. The same definition has to apply to both halves of the fraction. Too narrow and the share reads 100% for ever; too wide and it can never pass.
- CommitmentAlso called compliance requirement
A promise the hospital makes in a supplier agreement, such as a minimum spend, a volume or a share of the category, that a rebate or a price depends on. Missing it can cost the rebate on every purchase it governs, not just the shortfall.
- Attestation
A recorded statement, with who made it and when, that a condition in the agreement was met where no data can prove it, such as good credit standing or a milestone reached. Until one exists, the safe reading is that the condition was not met.
- Earned
The rebate the contract terms produce when they are applied to your own purchase data for a period. It is what the supplier owes on paper, whether or not anything has been paid.
- Received
What the supplier has actually paid against a rebate, by check, electronic payment or credit memo. It only counts toward a period once it is allocated to the right contract and period.
- Pending
Earned but not yet received. Some pending money is simply not due yet, and some is past its payment date. Keeping the two apart is the difference between waiting and chasing.
- Forfeiture
Losing an earned rebate because a condition in the agreement was not met on time, most often a compliance form or report filed after its deadline. Many agreements leave forfeiture to the supplier’s discretion, so a late filing is still worth making.
- Administrative feeAlso called admin fee
A fee a supplier pays a group purchasing organization, usually a percentage of what members buy on the GPO’s contracts. Many GPOs share part of it back with members, and because it is worked out from your purchases, you can check the statement against your own data.
- True-upAlso called year-end settlement
An adjustment that settles an estimate against the final figure. In accounting it is the entry that corrects a rebate accrual when the payment arrives; in a contract it can be a year-end settlement that pays the difference between what the periods paid and what the annual terms support.
- Prompt-pay discountAlso called early-payment discount
A discount a supplier gives for paying an invoice within a number of days the agreement sets. It is earned invoice by invoice, on each one’s payment date, rather than on the period’s total purchases.
- Sales tracingAlso called distributor sales data
Data a distributor reports on a supplier’s products it sold to you. Your own invoices for those purchases name the distributor, not the maker, so this file is often the only record that ties them to the supplier whose rebate they count toward.
- GPO contractAlso called group purchasing organization contract
An agreement a group purchasing organization negotiates with a supplier on behalf of its member hospitals. Members get access to the pricing, and any rebate or fee share-back follows the GPO’s terms and reports.
- Local contractAlso called local agreement or direct contract
An agreement a health system negotiates directly with a supplier, often on top of a GPO agreement for a better price or an extra rebate. No GPO report covers it, so the hospital usually has to calculate and track these rebates itself.
See the terms applied to your own contracts
Put one supplier agreement, or a handful of bill-only requests, in front of us and we will walk through how each line and each clause is checked.