Non-Employee Management

Business problem
A teaching hospital involves a LOT of people who are not employees: students, instructors, consultants, vendor employees, contractors, community physicians, and others. Fully 25% of the individuals who have some direct relationship with the organization may be non-employees. It is critical to accurately identify and track every one of these people, because they often have access to patients or confidential data.

Rounding up the non-employees
As mentioned in "Who works here?", we knew that we had many non-employees in the enterprise but knew next to nothing about them. Human nature being what it is, simply making a policy that non-employees must be "registered" would accomplish nothing in the long term. Every point of contact between any non-employee and the enterprise had to be redesigned to require the "registration" of the non-employee in order to obtain anything (e.g., security badge, computer accounts or contractor payments) for the non-employee.

A nice bit of synergy for this effort came from the accounts payable team, who requested an automated process for payment of self-employed contractors (individuals who receive a Form 1099 at year-end). Automating this process would save both finance and purchasing a significant amount of time, helping to provide an ROI for developing a non-employee management application.

Most users see a simple menu (shown at right). This allows contractors to submit invoices and run a report to see their payment history. It also allows supervisors and department managers to approve invoices, add/edit non-employees in their cost centers, and run reports for "their" non-employees.

Detailed instructions for all users include a list of frequently asked questions and step by step instructions for submitting an invoice. Managers have detailed instructions for submitting and approving invoices, adding a new non-employee, adding a contract or position, and creating invoice reports. In addition to help documents, video instructions are offered (see Lessons learned below).

Permissions
Permissions for this application are granted in three ways:

• for specific non-employees
• for specific cost centers
• for the entire application

Supervisors are automatically granted permissions to edit positions and submit/approve invoices for the specific non-employees whom they supervise. Any supervisor in a cost center can add new non-employees in that cost center.

Cost center permissions are granted at three levels:

• supervisor (see above)
• superuser
  • add/edit/terminate non-employees
  • submit invoices
• manager
  • superuser rights (see above)
  • approve invoices

The responsible manager for any cost center is automatically granted "manager" permissions. This manager, in turn, may grant superuser or manager permissions to anyone else, using the "Dept Admin" function.

Application permissions are designed to meet various specific needs:

• physicians organization — special permission to identify tax IDs that are shared among physicians in a group practice.
• employee — provides a mechanism for temporarily adding payroll employees to the intranet database in advance of their being added to the payroll system, which allows advance processing of computer system accounts and security badges, etc.
• intern coordinator — special batch process to add new interns, residents, house officers, fellows, and co-ops to payroll.
• intern admin — given to HR only for processing the batches of trainees added by intern coordinators.
• temp employees — access to special process for adding new temporary workers to the temp pool.
• admin — full rights for any function in the application
• support — same as admin, and can emulate any user

Adding a non-employee
The first step in tracking a non-employee is for someone who has the "manager" role for the relevant cost center to add the new non-employee to the worker database. This is actually a somewhat complex process because of many regulatory compliance issues. For example, the initial screen (shown below) when adding a new non-employee displays two caveats about adding providers and contractors.

The name of the new non-employee is matched with the names of all existing workers (employees and non-employees), using a our standard 5/3 comparison (matching first 5 letters of last name and first 3 letters of first name). If any existing worker is a possible match, the worker(s) with similar names are displayed. If the new person is not already listed, the process may continue.

Types of non-employees
We chose to group all non-employees into five categories (shown in the image below). The goal was to have as few categories as possible for simplicity. These five categories aren't perfect, but they work pretty well.

We need minimal information about employees of temp agencies, because the agency has the details about each worker. We only need to know the agency, where the person will work, their role, the internal contact person who is responsible for that non-employee (supervisor), and the dates when the non-employee will start and leave.

Note: we chose to treat non-employees as much like payroll employees as possible, for a couple reasons:

• it's always better to keep processes as consistent as possible; and,
• it's easier to group similar types of workers together if non-employees are categorized with titles and account codes that are similar to those used for regular employees.

For example:

• Non-employees have "positions" like employees.
• Each non-employee "position" has a title, a start and end date, and is assigned to a cost center and account code just like employee positions.
• A non-employee may have multiple "positions" in different departments, with different titles and end dates.

The only difference between agency employees and vendor employees is that the employer list has a different source (see image below). The vendor list is pulled from the Meditech accounts payable system. The Select Vendor button opens a vendor search window. If the vendor cannot be found in the vendor dictionary, selecting the "Cannot find vendor" checkbox exposes an additional form where a vendor may be added (see second image below).

In many cases, the vendor will not be listed in the accounts payable vendor list, because many vendors are not paid directly by our organization. For purposes of non-employee management, we consider a vendor to be any company who pays the wages for someone who has a non-employee role anywhere in our enterprise. We stretch this definition to include:

• community physicians who pay themselves a salary from their corporate entity;
• professors/instructors at participating schools; and
• subcontractors, etc.

To ensure compliance with federal and state employment laws, the manager adding a self-employed contractor must assert that the contractor's role meets the requirements (shown below). More detailed information is required about the non-employee, including Social Security number for issuing a Form 1099 at year-end.

There are various ways of paying a self-employed contractor. If payment is by invoice (shown above), the contractor typically will have an hourly rate and simply submit a number of hours for an invoice. There is also an option for lump-sum invoices (not shown). If the contractor will be paid with a monthly recurring payment, the form changes a bit (shown below).

The information collected for students is shown below:

The information collected for a volunteer (shown below) has several differences from that collected for students (above):

Regulatory compliance
Having provided the necessary demographic and position information about the non-employee, there are a number of steps required to comply with federal and Joint Commission regulations:

• verifying that the name does not appear on federal exclusionary lists;
• determining whether a criminal record check is required;
• determining whether HIPAA training is required;
• determining whether a business associate agreement is required; and,
• determining whether a contract is required.

The form used to determine these items is shown below (please note that not all items shown would necessarily apply to the same person — the form was manipulated to show all options for illustration purposes).

Most of the links in the form above are self-explanatory, with one exception: the link for "workforce" which displays an explanation of the term (partially shown below):

At the end of the process for adding a new non-employee, the manager is prompted to submit a request for computer system access (if needed) for the new worker.

Editing a non-employee
Demographic and position data for a non-employee are edited using the same forms (shown above). Adding a position follows much the same process as creating the first position: click the Add Position button (shown below) and supply all the relevant information about the new position.

"Terminating" a non-employee
Unlike a payroll employee, it is very simple to "terminate" a non-employee. There are two ways to do this:

• Use the "terminate non-employee process (shown below); or
• set the expiration date for the employee's last position.

Either process accomplishes the same thing: sets the expiration date for the non-employee "position," which is effectively the same as termination.

If searching by name (shown above), all matching names which are relevant to the current user are displayed (shown below). Relevant names include:

• all non-employees in any cost center for which the current user holds the manager role in non-employee management; and,
• all non-employees for whom the current user is the direct supervisor.

The "termination" date may be immediate or at any date in the future. Multiple non-employees may be terminated simultaneously.

The supervisor for a non-employee is notified once per month via e-mail if any relevant non-employee's position will expire in the next 60 days. The e-mail contains a link to a page (shown below) where the supervisor may immediately terminate the non-employee or move the end date a maximum of one year into the future.

Another tool for supervisors and managers allows them to review the expiration dates for all their non-employee positions, and update as indicated (shown below).

Invoices
Contractor invoices are submitted on-line, either by the contractor or the contractor's supervisor:

• If the contractor has no unexpired contract with a positive balance, the contractor cannot submit an invoice (each contractor position must have a maximum amount, and invoices are cumulative decremented from that maximum).
• If the contractor has more than one position with available funds, the correct position for this invoice must be selected (shown below).

The actual invoice process is very simple: provide invoice period start and end dates (either by inputting date or selecting from popup calendar) and the hours worked. The invoice amount is calculated and the invoice is submitted.

A confirmation screen displays full details of the current status of the contract for the contractor (shown below). In addition, real-time details of the invoice and payment history for this contract are available in a spreadsheet.

When a contractor submits an invoice, an e-mail request for approval is sent to the contractor's supervisor, unless the contractor specifically directs the e-mail to an alternate approver (in the supervisor's absence).

All approved contractor invoices are scripted into Meditech Accounts Payable every Thursday night with an automated process, and queued up for automatic check printing and mailing the next day. Finance staff never touch contractor invoices.

Reports
All of the invoice data for "1099" self-employed contractors may be viewed in a report, either for all invoices or for some subset of those invoices (shown below). The cost centers available for reporting are limited to those in which the current user has contractors.

Outcomes

• Payments to self-employed contractors are fully automated, so finance staff never touch the process except in the case of a problem.
• Finance and purchasing departments have one less headache every week; the promptness of payments is entirely in the hands of the contractor's departmental supervisor.
• Clear, documented process to ensure full compliance with all regulations for non-employees in a health care setting.
• Complete information about every worker in the enterprise.

Lessons learned

• We initially had no idea of the full extent of non-employees in the enterprise. Based only on system accounts, we calculated non-employees as comprising about 10% of total workers. After integrating all other contact points for non-employees such as security badges, contractor payments, provider credentialing, etc., the real number of non-employees had more than doubled to about 25% of total workers.
• There were fewer self-employed contractor payments than expected. The number of problems associated with the old manual process made the volume of these invoices seem quite high to finance and purchasing staff. When the process was automated and we had real data, we realized that the actual volume of invoices was fairly small.
• Video tutorials are easy and inexpensive to produce with a good USB microphone and screen capture software such as Camtasia Studio.
• If we were starting over, leveraging what we have learned during the past few years, we might select slightly different categories for non-employees.

Posted 25 June 2008