There have been many discussions lately about what to do when a distributor or operator claims an incorrect amount on a billback or request. There are several options, and I wanted to point out what they are and which ones are better than others.
Disciplinarian Approach (a.k.a. “this is going to hurt me more than it does you”)
The first option is the Disciplinarian Approach: don’t pay the wrong amount – only pay the correct, allowed amount. Either the claimants will accept that “correction” or if they can, they will deduct the difference. We then match up the deduction with the claim documentation we have on file here at
Answers Systems, and we notify our clients that this is a re-billable deduction.
There is a lot of work required to re-bill this deduction, and you can only hope to be repaid. This is the reason that the Disciplinarian Approach really does hurt you more than the distributor or operator that you are correcting. The downside to this option is the additional work of recollecting each time the distributor or operator claims the wrong amount. Additionally, if the amount is less than the manufacturer’s automatic write-off amount, then it may never show up.
Did I say automatic write off amount out loud? Oops!
Tolerance Approach (a.k.a. “claimants gone wild”)
The next option is to allow a tolerance threshold without recalculating the claim. If the amount “over claimed” is within the tolerance threshold – this is usually around the automatic deduction write off amount – then allow it and work the Tolerance Report. The Tolerance Report is used to identify agreements that have the most paid out with tolerance or the distributors that have the most paid out with the tolerance. (If you are not familiar with this report, please talk to your account manager.)
Much like MTV’s coverage of Spring Break exposes youth gone wild, this report can identify claimants gone wild. The report exposes those claimants and agreements that need to be addressed, but someone has to be accountable for the report.
Partnership Approach (a.k.a. “slow and steady wins the race”)
The third option is to “pend” the claim, determine the problem, and fix it. If the claimant has the contract entered incorrectly in their system, the only way to stop the repetitive nature of incorrectly billing back each month is to contact the claimant and have them fix the contract on their side.
Although this approach slows down the process while waiting for communication of the issue, you will have the assurance that only paying the amount allowed will not generate a deduction. It also ensures that going forward the next month’s claim will be at the correct amount.
While you may not get the instant claim payment gratification, you do get to savor the benefits that this delay entails:
- lower deduction balances
- correct payments of claims
- correct agreements in your system and the customers
- more accurate reporting
- less frustrated operators
- less frustration in managing deductions