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Member Information

Prime Source GPO Membership Application Agreement

Membership Agreement Content

As evidenced by, and effective upon, by reading and agreeing this Prime Source GPO Membership Application, the member identified on this application (the “Member”) hereby agrees to abide by the terms of this GPO Membership Application with Prime Source National Corporation d/b/a Prime Source GPO (“PSG”) and the PSG GPO terms and conditions (“GPO Terms and Conditions”) on behalf of itself and its subsidiaries and affiliates, if any, identified in this membership application (“Participating Facilities”). Collectively, the Prime Source GPO Membership Application and Prime Source GPO Terms and Conditions are referred to as this “Agreement.”

  • Participation in GPO Program. PSG is a group purchasing organization (“GPO”) that provides group purchasing programs through which Member and Participating Facilities may purchase certain products and services (“Covered Products and Services”) from participating vendors (“Vendors”) with whom PSG contracts (“Vendor Contracts”). Member hereby engages PSG to act as its Primary GPO (as such term is defined in the GPO Terms and Conditions) and is hereby granted access to Vendor Contracts, pursuant to which Member and/or Participating Facilities may purchase Covered Products and Services available thereunder for use by Member and Participating Facilities. Member represents and warrants that all Covered Products and Services purchased, licensed, or leased by Member and/or Participating Facilities under Vendor Contracts will be for their own use in the provision of services by Member and/or Participating Facilities, and not for resale or distribution to third parties other than in the course of furnishing facility-related services.
  • Vendor Contracts. Member hereby authorizes PSG, as its GPO agent, to: (i) negotiate the terms of, enter into,cancel, or modify any Vendor Contracts as it deems necessary, advisable, or appropriate; (ii) receive from Vendors data relating to purchases of Covered Products and Services under Vendor Contracts by Member and Participating Facilities; and (iii) collect certain rebates and utilize good faith efforts to collect rebates payable on Member’s and Participating Facilities’ purchases through Vendor Contracts. Member acknowledges that Vendors shall have final right of approval over Member’s and each Participating Facility’s participation under Vendor Contracts. Member hereby agrees to be bound to any and all letters of commitment, letters of participation, or any other similar document executed by Member and intended to evidence Member’s and Participating Facilities’ intended participation in a Vendor Contract. Member agrees that PSG is acting as a negotiator and will neither take title to, nor be obligated to pay for, any products and/or services whatsoever by virtue of this Agreement or any order placed or purchases made by Member or any Participating Facilities. Member (and not PSG) shall be solely responsible for compliance with Vendor Contract terms and conditions and Member shall be solely liable for all purchases and orders made pursuant to any Vendor Contracts. The provisions of this Section shall survive termination or expiration of this Agreement.
  • Compliance with Laws. Member and Participating Facilities shall comply with all applicable federal, state, and local laws and regulations (“Applicable Laws”).
  • GPO Fees. PSG hereby informs Member and Member acknowledges that, for administrative and other services provided by PSG, PSG will receive payment of fees from Vendors from which Member and Participating Facilities purchase Covered Goods and Services (“GPO Fees”) of three percent (3%) or less of the purchase prices of the Covered Goods and Services provided by those Vendors to Member and Participating Facilities. In the event that a Vendor Contract involves GPO Fees payable to PSG that exceed three percent (3%) of the purchase price of Covered Goods or Services purchased by Member and Participating Facilities, PSG will, on the PSG “Fees Disclosure” document located on its website at www.primesourcegpo.com and incorporated herein by reference, specify the amount (or, if not known, the maximum amount) that PSG will be paid by such Vendor for such purchases. PSG shall disclose in writing to Member at least annually, and to the Secretary of Health and Human Services upon request, the amount of GPO Fees received from each Vendor with respect to purchases made by or on behalf of Member and Participating Facilities in accordance with the federal Anti-Kickback Statute regulations applicable to GPOs (42 C.F.R. § 1001.952(j)).
  • Term and Termination. This Agreement will remain in effect commencing on the date signed by the Member until terminated pursuant to the terms of this Agreement. In the event of a breach of any provision of this Agreement by Member or any Participating Facility, PSG shall notify Member in writing of the specific nature of the breach and if Member or the breaching Participating Facility does not cure the breach within thirty (30) days of receiving such notice, PSG may immediately terminate this Agreement. Either party may terminate this Agreement without cause or penalty upon written notice to the other party. Upon termination of this Agreement for any reason whatsoever, PSG shall have no further obligations under this Agreement to Member or Participating Facilities (except as noted herein), and this Agreement shall be null and void and without any force or effect. Termination shall not preclude PSG from pursuing any and all remedies available to it at law or equity.
  • General. This Agreement may only be amended by a written agreement bearing handwritten signatures of authorized agents of each of the parties and expressing an intent to be bound by the terms of such an amendment, except that the GPO Terms and Conditions may be modified in accordance with its terms. A facsimile or scanned copy of a handwritten signature shall be sufficient for purposes of this Agreement. This Agreement, including all exhibits referenced herein, constitutes the entire understanding and agreement between the parties concerning the subject matter hereof, and supersedes all prior negotiations, agreements and understandings between the parties, whether oral or in writing, concerning the subject matter hereof. The terms on any exhibits, attachments, quotations, proposals, or pre-printed form documents between PSG and Member shall have no effect and the terms of this Agreement shall control. In the event of a conflict between the terms of this GPO Participation Agreement and the GPO Terms and Conditions, the GPO Terms and Conditions shall control and govern. Any waiver of a breach of any provision(s) of this Agreement shall not be deemed effective unless in writing and signed by the party against whom enforcement of the waiver is sought. Member shall not assign, subcontract, delegate or otherwise transfer this Agreement or any of its rights or obligations hereunder, without PSG’s prior written consent. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. If any part of this Agreement shall be determined to be invalid, illegal or unenforceable by any valid act of Congress or act of any state legislature or by any regulation duly promulgated by the United States or a state acting in accordance with the law, or declared null and void by any court of competent jurisdiction, then such part shall be reformed, if possible, to conform to the law and, in any event, the remaining parts of this Agreement shall be fully effective and operative insofar as reasonably possible
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The Business Of Post Acute Care

By 2026, the market for long term care in the U.S. will reach more than $737 billion

  • Yet, nursing homes have faced increasing closures over the last 2 decades

Nursing Homes: Struggling To Make Ends Meet

Half of Americans will need longmterm care in their lifetime

  • 1 in 7 will need assistance for more than 5 years
  • In 2018, 52 million Americans were 65+
  • By 2060, that number will nearly double, with 95 million Americans over 65

Despite growing demand, nursing homes are closing their doors

From 1999 to 2008
  • 50% of hospital-based facilities closed
  • 11% of freestanding facilities closed
  • 10% of rural facilities closed

Why Do Nursing Homes Fail?

  • Small facilities or those with low occupancy
  • Poor quality of care and improper management
  • High Medicaid occupancy and low reimbursement rates

Medicare, Medicaid & The Cost Of Care

  • In 1935, the Social Security Act jumpstarted a private nursing home industry
  • By 1965, 60% of residents received public assistance
  • BUT, as federal funding increased, so did concern over quality of care
  • In 1960, 44% of beds failed to meet fire and health standards
  • In 1965, Medicare & Medicaid began tying public funding to a standard of care — Only 12% of nursing homes met certification standards that year

Medicare pays for 20 days of long term care and subsidizes the cost of days 21-100

  • After that, residents paying $50,000-100,000 a year — until they have exhausted their assets and Medicaid begins to cover costs
    • Today, 67% of nursing home care in the U.S. is paid by Medicare and Medicaid
      • Across the country, many states have seen increases in long term care costs that outstripped inflation
        • California, Florida, New York and Texas
    • Often, Medicaid reimbursements are less than the cost of care
      • 2017 Medicaid Shortfall Per Patient
        • $64 New York
        • $64 Wisconsin
        • $47 New Jersey
        • $40 Massachusetts

Long term care facilities face many of the same challenges — chief among them: managing costs and maintaining profits, without compromising quality of care

The Long Term Care Ecosystem

The Continuum Of Care

Independent Living

In-Home Care

  • 2015-16: 3,651,400 patients

Adult Day Care

  • 2015-16: 179,200 patients

Assisted Living

  • 2015-16: 757,900 patients

Nursing Homes

  • 2015-16: 1,166,400 patients

Why Costs Are Rising?

Labor Costs:

  • Shortage of skilled caregivers means
  • Higher wages needed to attract talent
  • More overtime for limited staff

Payroll accounts for up to 75% of long term care operating costs — Cutting back on staff would mean cutting quality of care

Changing Needs:

  • Aging Americans need more specialized care
  • More diagnoses of Alzheimer’s and dementia
  • li>Many wait to seek help, meaning their conditions are more advanced

1 in 10 Americans over 65 have been diagnosed with Alzheimer’s or dementia — conditions that require specialized memory care

Transitional Care: Since 2001, post-acute care has shifted from hospitals to nursing homesThis shift brought increases in therapy staffing and supply costs

To ensure quality, Medicare and Medicaid penalize hospitals if patients are readmitted within 30 days — Prompting hospitals to stop transfers to nursing homes with high readmission rates

The Old Solution: Group Purchasing

Cutting back on payroll could have a negative impact on quality of care — So facilities must look elsewhere to contain costs

  • Group purchasing organization help save on supply costs — up to 30%
    • Food Service
    • Pharmacy
    • Medical, Surgical, Nursing, & Incontinence
    • Housekeeping & Maintenance
    • Rehabilitation
    • Office supplies
    • Construction

Group purchasing alone is no longer enough to bridge the gap

What’s Missing?

Expense Management Collect, evaluate, and report spending data to improve efficiency
  • Smaller, more frequent deliveries to reduce excess inventory and free up cash
  • Best Practices
    • Reducing falls, infections, and mistakes to improves patient care
    • Reduces the cost of these incidents and decreases Medicare/Medicaid penalties
    The Missing Link: Prime Source Offers customizable and transparent cost-benefit solutions, combining – Reliable and transformative expense management – Comprehensive best practices – Expansive vendor network Empowers owners and operators to strengthen financial and operational outcomes

    CTA: How can advanced cost-benefit practices save nursing homes from failure?

    Sources:

    https://jamanetwork.com/journals/jamainternalmedicine/fullarticle/227255
    https://www.healthcarefinancenews.com/news/7-ways-lean-healthcare-management-reduces-cost
    https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3816000/
    https://www.alz.org/media/documents/alzheimers-facts-and-figures-2019-r.pdf
    http://www.natho.org/pdfs/KPMG_2011_Nursing_LaborCostStudy.pdf
    https://newsroom.genworth.com/2018-10-16-Genworths-15th-Annual-Cost-of-Care-Survey-Shows-Continuing-Rise-in-Long-Term-Care-Costs
    https://www.cdc.gov/nchs/data/hus/2018/fig17.pdf
    https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4476054/
    https://biztimes.com/the-nursing-home-funding-crisis/
    https://www.leadingagepa.org/Portals/0/Documents/RKL_LeadingAgePA_Medicaid_Gap_Analysis_Report.pdf
    https://listen.sdpb.org/post/nursing-homes-continue-struggle-after-10-reimbursement-increase
    https://www.bostonglobe.com/metro/2019/11/03/state-ballot-initiative-would-boost-funding-for-financially-ailing-nursing-homes/brWLbl1Nvuor5UumWXMzOM/story.html
    https://www.bloomberg.com/news/articles/2019-06-25/u-s-nursing-home-costs-may-get-worse-thanks-to-a-labor-shortage
    https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2009.0494
    https://newsroom.genworth.com/2019-11-20-Genworth-Cost-of-Care-Survey-2019-Most-Long-Term-Care-Costs-In-Iowa-Increased-Year-over-Year
    https://longtermcare.acl.gov/medicare-medicaid-more/medicare.html
    https://www.ncbi.nlm.nih.gov/books/NBK217552/
    https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2699923/
    https://www.cdc.gov/nchs/fastats/nursing-home-care.htm
    https://www.nytimes.com/2019/03/04/us/rural-nursing-homes-closure.html
    https://www.census.gov/content/dam/Census/library/publications/2018/acs/ACS-38.pdf
    https://aspe.hhs.gov/basic-report/long-term-services-and-supports-older-americans-risks-and-financing-research-brief
    https://www.reportbuyer.com/product/5785365/u-s-long-term-care-market-size-share-and-trends-analysis-report-by-service-competitive-landscape-and-segment-forecasts-2019-2026.html
    https://www.thedailytimes.com/business/prime-source-pivots-its-brand-and-focuses-on-providing-healthcare/article_cf6913d6-767d-50bb-9e12-af3f17136190.html
    https://www.mcknights.com/news/products/prime-source-pivots-toward-post-acute-care-industry/
    https://www.biospace.com/article/releases/prime-source-pivots-its-brand-and-focuses-on-providing-healthcare-solutions-in-post-acute-care-pac-industry/
    https://www.prnewswire.com/news-releases/prime-source-pivots-its-brand-and-focuses-on-providing-healthcare-solutions-in-post-acute-care-pac-industry-300990729.html
    https://www.thedailytimes.com/business/prime-source-pivots-its-brand-and-focuses-on-providing-healthcare/article_cf6913d6-767d-50bb-9e12-af3f17136190.html