Cotiviti Retail audits are laser-focused across business verticals to deliver results through deep domain experience, specialized competencies, and strong, consistent leadership. Specialty Retail covers a group of similar businesses that share best practices including home improvement (DIY), home office, sporting goods, pet supplies, health and wellness, and a variety of next-generation, omnichannel retailers. Our flexible approach, customized to meet each client’s structured and unstructured data needs, is driven by metrics-driven management and a unified methodology across clients.
Serving as the primary audit recovery firm for the two market leaders in home improvement, together approaching combined worldwide revenue of $180 billion in 2019, Cotiviti Specialty Retail works closely with its long-term clients on continuous improvement. Together, we are expanding audit scope into additional areas, traditional and non-traditional, and accelerating recovery efforts to provide value closer to the transaction. And as American consumers continue to increase year-over-year spend on home improvement products across a variety of departments, we'll continue to work with our clients to support custom, outside-of-the-box business initiatives.
Cotiviti is in the primary audit position for 90 percent of its clients in the Specialty Retail segment—a testament to our ability to deliver the highest degree of accuracy (claim quality), our strong continuous improvement process, and our collaboration with clients to accelerate claims. We’ve consistently recorded a 95 percent catch rate working with our largest home improvement clients in the primary audit position, well above industry average.
Data quality often dictates the overall success of an audit. The Specialty Retail team focuses on improving data health by addressing missing, incorrect, and incomplete data. Improving data quality allows Cotiviti to fully integrate additional data elements into an audit, including unstructured emails. Several clients have adjusted email processing timing to deliver emails for internal audit on a monthly basis.
The overwhelming majority (83 percent) of our clients rely on email to negotiate deals with suppliers, many of which rely upon rapid decisions not captured by systems of record. As evidenced by the metrics below, email data review improves quality and the overall value of each audit.
Cotiviti recovered $550 million for its clients in 2018, approximately half of which was positively impacted by supplier emails. Our analysis shows that email-driven claims are four times larger in average value, and the average conversion rate of email claims is two times larger than that of non-email claims.
Writing a large volume of claims is immaterial if those claims ultimately result in paybacks and disputes. A large percentage of unqualified overpayments is detrimental to recoveries and can potentially erode the trust of clients and suppliers. Cotiviti’s reputation and performance have allowed us to build trust with the supplier community and streamline collection of overpayments.
To that end, results Cotiviti worked with a $9 billion home office client to deliver:
93% of posted claims undisputed by vendors
<1% claim payback rate
Retailers can often take years to implement root cause recommendations to fix systems, supplier agreements, and processes. But for one client that quickly adopted suggested process improvements, the results were immediate and significant:
65% decrease in net recoveries year-over-year (YOY)
>$2.5M recovered by their internal team based on root cause insights
60% YOY improvement in net claims-to-spend ratio
>$24M savings from the overall partnership with Cotiviti
By combining a flexible approach and deep industry experience, Cotiviti meets each client’s custom project requests. We can build custom databases for specific use cases and work backwards to identify overpayments caused by a lack of integration between disparate systems. Relying heavily on unstructured email documentation to offset the impact of supplier turnover, Cotiviti’s work on custom projects for one client helped drive a 24 percent increase in recoveries over two years.
Other results related to non-traditional projects for this client include:
>$30M in incorrectly paid purchase orders identified and moved to asset protection for settlement
>$3M in duplicate charges identified and passed on for further analysis
>$2M in credits due found after detecting and fixing a system limitation related to chargebacks
Whether it’s miscalculating vendor support for promotion or signed documentation with incorrect dates, working with vendors presents unique challenges for retailers. But Cotiviti can help. Largely through email data mining technology and keyword matching, Cotiviti identifies communication breakdowns in the vendor’s funds process. Our team delivered strong results related to vendor funds overpayments for one home improvement client, including:
$29M net claim total (+5% YOY)
~$2M increase in markdown recoveries
>$600K due to an RTM credit process breakdown