INSIDE THE CURRENT ISSUE

October 2010

Standard Practices

Questions can be e-mailed to: editor@hpnonline.com Called in to Jeannie Akridge at: (941) 927-9345 ext.202 Mailed to: HPN Standard Practices 2477 Stickney Point Road, Suite 315B Sarasota, FL 34231 Where will you be when the sun sets December 31? by MJ Wylie As the December 31 sunrise date approaches for adoption and implementation of GS1 Healthcare US’ Global Location Number (GLN) healthcare organizations may either be active, preparing, doubting, in denial or downright defiantly opposed to doing anything. But the GLN, which identifies legal and functional entities and physical locations in place of an organization’s own proprietary numbering, continues to push forward. Whether you’re a hospital, group purchasing organization, manufacturer, distributor or service company, you probably should evaluate where you’re at in the GLN adoption and implementation process with barely 90 days to go. Starting with this edition, Healthcare Purchasing News periodically will devote its "Standard Practices" column to a helpful Q&A designed to answer as many of the lingering and pressing questions surrounding supply data standards adoption and implementation. So send us your questions. Remember that no question is too basic nor is too complicated or even silly to ask. So pose them early and often, before and after the sequence of sunrise dates during the next few years.

Q I’ve heard that hospitals need to begin using data standards in supply chain transactions so what are these standards all about?

As more and more healthcare supply chain transactions are handled electronically (the average is now over 60 percent according to HIMSS Analytics), there is an increasing need for the use of standardized data that can be understood by the information technology systems employed by suppliers, providers and their business partners. In other words, with computers doing more of the work, we cannot rely on humans to interpret the data and make necessary corrections. More importantly, with pressures to become more efficient, we cannot afford the time it takes for human intervention and/or rework required due to inaccurate data. Healthcare providers, suppliers, distributors and group purchasing organizations (GPOs) often use different identifiers for the same organizations, locations and products. This impacts every aspect of the supply chain – from order accuracy to inventory and recall management. The use of global data standards for organization, location and product identification can help address these issues by ensuring that all trading partners are using the same unique identifiers and thereby speaking the same language.

There are two types of data standards primarily used in the healthcare supply chain: those to identify organizations and locations such as legal entities (e.g. hospital, supplier, distributor), functional entities (e.g. purchasing department, nursing station) and physical locations (e.g. warehouse, loading dock, cabinet); and those to identify products at each specific unit of measure.

There are two main standards bodies that operate in the healthcare industry and administer standards for both organization/location and product identification: GS1 Healthcare and the Health Industry Business Communications Council (HIBCC). The GS1 standards include the Global Location Number (GLN) for organization/location identification and the Global Trade Identification Number (GTIN) for product identification. The HIBCC standards include the Health Industry Number (HIN) for organization and location identification and the HIBC-Labeler Identification Code (LIC) for product identification.

Many of the major group purchasing organizations (GPOs) and some large healthcare systems have issued statements indicating they will require healthcare trading partners to begin using GLNs in place of proprietary account numbers by December 31, 2010, and GTINs in place of custom item numbers by December 31, 2012. These are industry proposed sunrise dates for GLN and GTIN implementation, and are not regulatory mandates.

GS1 Healthcare US has prepared a document explaining the 2010 GLN Sunrise, which can be accessed at this url: http://www.gs1us.org/DesktopModules/Bring2mind/DMX/
Download.aspx?EntryId=378&Command=Core_Download&
PortalId=0&TabId=73

Healthcare suppliers currently assign proprietary account numbers to their customers and to each location to which they ship their products. As a result, hospitals and healthcare systems have to manage literally thousands of account numbers. For example, a healthcare system that has 100 ship-to locations and 3,000 suppliers could potentially have to manage 300,000 different account numbers. By assigning a unique GLN to each of these shipping locations that can be used by each of its suppliers, that provider can reduce the amount of numbers it has to manage to just 100. The key paradigm shift is that providers now must be responsible for assigning numbers to their own locations, as opposed to using numbers assigned by suppliers.

The process of assigning GLNs to organizations and locations is called enumeration. If your hospital is part of a GPO, you may already be enumerated in the GS1 US GLN Registry for Healthcare. In that case, you should check first with your GPO to determine if they are already enumerated in the registry. Organizations that are not part of a GPO can check directly with GS1 US (http://www.gs1us.org) to determine their enumeration status. If your organization is not already enumerated, you will need to request a company prefix from GS1 US. Once you have a company prefix, you can add location references to create GLNs for your organization and various locations. More information on the company prefix and how it works with location references is available from GS1 US at this link: http://www.gs1.org/docs/idkeys/
GS1_Global_Location_Numbers.pdf

Even if you are already enumerated in the GLN Registry for Healthcare, providers must still verify that the enumeration is accurate in the context of the various business purposes for which you will use GLNs, such as in transactions, for contract eligibility, etc. In other words, are the GLNs assigned in a manner that is reflective of how you want your trading partners to view your organization and the locations to which products are shipped. GHX has worked with hospitals and suppliers to enable the use of GLNs and in the process discovered a number of instances in which providers were not registered appropriately or to the level required for electronic transactions.

Providers are ultimately responsible for assigning unique GLNs to the appropriate functional, physical and legal locations that they have chosen to enumerate in their organizations. GLNs should generally only be assigned to those locations that will be relevant to external trading partners. Often these are locations that have their own distinct shipping/mailing/delivery addresses to receive products and/or correspondence. These locations are generally tied to a ship-to, deliver-to and/or bill-to address. Once you have enumerated your organization, you are responsible for making sure your GLNs are shared with your suppliers and, if applicable, your GPO(s) and your e-commerce provider. Remember, once your hospital is enumerated with all applicable GLNs, you must take responsibility for updating these numbers so that they continue to reflect how you want your organization to be viewed.

The first step is to educate yourself and your team on the use of GS1 standards and the enumeration process. The GS1 Healthcare Provider Toolkit is a good resource for getting started: http://www.gs1us.org/sectors/healthcare/
healthcare_provider_tool_kit.

GHX has also prepared an educational paper on best practices as it relates to adoption and use of GLNs in transactions. It is available at: http://www.ghx.com/downloads/GLN_Best_Practices_V02.pdf.

GHX has completed numerous pilot engagements with healthcare suppliers, providers and distributors to determine best practices and recommend methods for implementing these global standards. Based on this experience, we’ve learned that one key to successful standards adoption is for providers to assemble a multidisciplinary team that is involved in the process from the start. This should be comprised of representatives from each department that interacts with your supply chain processes, systems, data and products, including materials management, purchasing, finance, accounts payable, receiving, information technology, risk management and contracting. A materials management director that has successfully implemented GLNs and GTINs said that during the process she encountered individuals and positions within her organization that she had never worked with before.