If there’s anything you can take away from our series on managing the Quote-to-Cash cycle in MedTech, it’s that the process is complicated. Medical technology is a massive industry with a lot of unique processes and nuances that are difficult to digitize—and even trickier to digitize correctly. It should be no surprise that the billing and invoicing process can be just as complex. Billing has to integrate complicated pricing mechanisms which often have to adhere to specified contract rates, all while producing an accurate invoice as quickly as possible.
Part of this can be accomplished by integrating and customizing the systems we’ve discussed in earlier posts. Improving one facet of the Quote-to-Cash process can relieve stress on the other parts and ease the minds of employees and customers. But billing has its own obstacles too and it’s important to consider every angle when planning an implementation or system overhaul. With that in mind, let’s look at some billing issues common in medical devices technology and manufacturing.
Varied internal and external billing models
Medical devices and technologies have varied deliverables and that can make billing difficult. We’ve talked about how difficult it can be to price medical technologies, considering their various types and necessary customizations. If an insurance company wants to purchase 1000 identical blood glucose monitors, it’s probably easiest to invoice them immediately and ship once the bill is paid. But what if a hospital wants to order a custom CT scanner with 24-hour maintenance?
Customizing machinery and providing service accrue additional costs, so a MedTech company may want to invoice the hospital for part of the cost upfront, then bill them for the rest once the machine leaves the factory. That covers the cost of the machine, but they may want to bill the maintenance as a monthly subscription, to make renewal easier when the service period ends.
All of this is affected by marketplace pressures. Hospitals are under pressure from governments and patients to reduce costs and control spending. This, combined with increasing hospital consolidation and purchasing power puts pressure on medical devices companies to follow customer guidelines for invoicing and billing, or risk losing valuable connections to the competition.
A flexible billing system can be the key to maintaining and improving relationships with customers, but that flexibility can be difficult to achieve. It’s important to consider all use cases when developing a digital billing system, including cases where the invoice generation depends on customers’ restrictions.
While the majority of MedTech services don’t involve patient data or records, their primary customer bases (hospitals, private practices, insurance companies) deal with patient data on a regular basis. Some medical devices companies also have options for ecommerce and selling directly to consumers. Whether dealing directly with patient information or not, it’s important that MedTech companies consider the role of Electronic Health Records (EHR) in the quoting and invoicing process.
As governments put pressure on the healthcare sector to EHR for patients in lieu of paper records, more and more healthcare billing is performed through EHR platforms . While many MedTech transactions never involve the patient data or information that these EHR tools are made to collect, EHR’s role in medical billing makes it necessary for medical devices companies to make sure their billing system can successfully interact with—or even integrate with—EHR platforms like Epic and Oracle Cerner.
Adding to this is the fact that sometimes MedTech services do directly interact with some patient records, whether its anonymous statistics provided by hospitals for bulk orders or specific patient data used to determine the most appropriate device or product for their needs. In any case, it’s important to remember that any invoice a company sends may need to be processed through an EHR platform and plan an integration accordingly.
Inefficient or inaccurate pricing engines
We have talked about the issues facing MedTech pricing engines in a previous post, but it’s important enough to bring up again. Calculating a line item should happen in seconds, no matter what context—quoting or billing. Bloated or lagging pricing increases stress in-house and client-side: Sales and Accounting want that bill sent out ASAP, while the client wants to make sure it’s taken care of. This is especially important in the medical devices industry, where expedient delivery of a device can have a real impact on a patient’s prognosis or quality of life.
Integrating your digital billing system with a quality pricing system can eliminate human errors that slow down the billing process. These integrations ensure that quotes and invoices match, that contract pricing is applied correctly, and that each document is consistent in data, formatting, and presentation.
If it takes more than a few minutes to generate an invoice, or more than a few seconds to generate a line item, it’s important to take a look at your pricing system, to make sure that it’s running as smoothly and efficiently as possible.
Billing management systems like Salesforce and Conga can be incredibly helpful when it comes to the complex billing situations presented by medical devices manufacturing. They can account for multiple billing models, integrate with other systems, and streamline the invoicing and billing process to make everyone’s lives easier.
That being said, most out-of-the-box solutions aren’t built for the kind of complexity MedTech requires and it’s important to customize them effectively, taking into consideration issues like those raised here. Once you’ve customized your installation, though, they can be lifesavers.
A digital billing system can reduce stress throughout a contract research organization, but it’s important to consider potential obstacles when planning an implementation. To learn more about how CommerceCX helps medical devices manufacturers manage proposal generation, contract management, pricing clinical trials, and more, check out our other articles on the Quote-to-Cash process for MedTech companies.