Your Item Master File provides a critical foundation for your business. It directly impacts many areas of your business including order management, inventory management and billing. If your Item Master File is lean and mean your business operation purrs along. But if it is suffering from old, inaccurate or duplicate information, running your business becomes much harder. You spend too much time trying to figure out which is the right item to enter on an order, you have broken links between the product you are using and the product you think you are using, your system loses the ability to help you manage your inventory and you find yourself having to redo bills because the billing codes are wrong.
Here are three costly results I have seen when people do not manage their Item Master Files.
- Denied claims due to invalid HCPCS codes.
- Impaired cash flow due to resubmission of denied claims and waiting to get paid all over again.
- Slowed and incorrect order processing and prescription filling due to time lost determining which of several duplicate items, was the right one or ultimately giving up and picking the wrong one. (One client’s Item Master File had 96 separate line items representing just four unique inventory items.) If you don’t make inactive items inactive people will use the wrong item.
To keep your Item Master File healthy, your operations running smoothly and your bottom line growing, use the following action plan.
Note: If you don’t remember the last time you did a thorough clean up of your Item Master File make it the first thing you do. (As someone who has had corporate responsibility for the Item Master File for two national infusion firms I can tell you this: Either you control your Item Master File OR it controls you. There is no middle ground.)
Today: Make sure you have a plan in place that governs how any new item will be entered into the Item Master File.
Every Day: Follow the plan. Before adding any new item check twice to be sure it does not already exist.
Every Week: Run a new item report and double check each new entry.
Every Month: Run a report that shows activity for each new item entered that month. No activity means the item did not have to be added or a duplicate exists.
Every Year: Perform a thorough review of your Item Master File. Run reports that show activity for all items. Remove duplicates and research items with no activity. If you have not done this in a while or you have never done this, do it first before implementing the above approach. You will save yourself time and headaches.
Lynn James Everard, C.P.M.
Business Strategist
954-647-3554