CMRP Overview Session

 Dave Hinkle, FACHE, CMRP

 Michael Moore, CMRP
 Your Presenter’s
 Dave Hinkle
 Principal, Healthcare Supply Chain Education & Consulting
 AHRMM Approved CMRP Presenter
 Director, Supply Chain Outreach, Providence Health & Services
 Senior Director, Supply Chain Operations Practice, VHA Performance Services
 Supply Chain Operations Assessments and Operations Redesign
 Interim Materials Management Services
 Materials Management Leadership Program (Outsourcing)
 David.hinkle@providence.org
 425-525-3242 (office), 856-816-7150 (cell)
 Michael Moore
 Director of Sales / National Accounts, Welmed Inc.
 President-Elect, WSHMMA / Newsletter Editor
 Previous
 Surgical Solutions Specialist, PHS [contracts, inventory planning, sales]
 Product Manager, Devon OR Products, Covidien [product development, contracts,
logistics, marketing, profit management]

2
 Disclaimer

 Please be advised that this is only an overview of

the Materials Management Review Guide.
 It should not be inferred that test items in the
examination are selected from any single
reference or set of references or that
participation in this review session guarantees a
passing score on the examination.
 No portion of this presentation may be
reproduced by an attendee without the expressed
written permission of the presenter.
 A Mark of Distinction

CMRP status allows you to:

 Have a premier credential based on a sound
assessment to distinguish yourself in an
increasingly competitive marketplace.
 Enjoy the pride of recognition and knowing you
are among the elite in the field of healthcare
materials management.
 Administration

 American Hospital Association

 Eligibility [education + experience]
 Application for exam
 Fees
Valid
 Schedule Exam for 3
 Computer-based years
 2 hours, 110 questions [10 pretest]
 Immediate results [upon completion]
 Exam Specifications

The AHRMM role delineation study identified real-

world tasks that were grouped into categories and
weighted to produce exam specifications.
1. Purchasing, Procurement and Product Value Analysis
2. Inventory Distribution Management
3. Information Systems and Data Management
4. Finance
5. Strategic Planning and Leadership (Support Services)
6. Materials Management Definitions (non-AHRMM)
 Exam Categorized

 Recall
 The ability to recall or recognize specific information
 Application
 The ability to comprehend, relate or apply knowledge to
new or changing situations
 Analysis
 The ability to analyze and synthesize information,
determine solutions and/or to evaluate solutions
Purchasing, Procurement and Product
Value Analysis

 Administer and direct the program to purchase

materials, supplies, and capital equipment
 25 items
 Recall – 5 items
 Application – 15 items
 Analysis – 5 items
Purchasing, Procurement and Product
Value Analysis

 4 Steps of “Act of Purchasing”

1. Requisitioning
2. Sourcing
3. Negotiating
4. Ordering
 Purchasing, Procurement and Product
Value Analysis
 Requisition / Purchase order types
 Stock
 Non-stock
 Electronic
 Traveling
 Blanket
 Standing
 Open
 Purchasing, Procurement and Product
Value Analysis
 Freight terms and title of goods
 FOB destination
 FOB shipping point
 FOB destination, prepay freight, and add
 FOB shipping point, freight allowed
 Payment terms and conditions
 2% 10 days, Net 30
 COD
 Credit card / purchase card
 Purchasing, Procurement and Product
Value Analysis
 Legal aspects of purchasing
 Product liability
 Wrongful rejection
 Failure to deliver
 Liabilities and warranties
 Uniform Commercial Code (UCC)
 Robinson-Patman Act
 Purchasing, Procurement and Product
Value Analysis
 Right of possession
 “Absence of rightful rejection”
 noted by agreement, delivery, use or payment
 Unconscionable contracts
 Unfair, one-sided but NOT illegal
 Liabilities and warranties
 Implied
 Expressed
 Purchasing, Procurement and Product
Value Analysis
 Safe Harbor
 Published in 1991 as an Amendment to the
1972 Medicare Fraud regulation
 Prohibits:
 Knowing and willful solicitation, receipt, offer,
payment of remuneration in return for referral of Medicare
patient
 Knowing, willful, payment, receipt remuneration
to induce the purchase of goods/services which
will be paid for by Medicare
 Purchasing, Procurement and Product
Value Analysis
 Safe Harbor requires hospitals to:
 Report all discounts, free goods, warranties in
cost report, submitted to Medicare.
 Discounts are acceptable as rebates, credits.
Must involve goods sold.
 Cannot rebate one item based on purchase of another.
 Cannot link incentive to furnish goods at no charge
if another item is purchased.
Purchasing, Procurement and Product
Value Analysis

 Uniform Commercial Code (UCC)

 Established in 1952
 Governs purchases in 49 states
 Excludes services associated with products
 Purchase of goods > $500 must be confirmed in
writing to be enforceable under the law
 Statute of limitations is 4 years
 Materials Manager’s “Tool Bag”

 Activity Based Costing (ABC)

 A cost management tool to identify and allocate
overhead costs
 Activity Based Management (ABM)
 Minimize costs, eliminate duplication
 Continually evaluate new supply chain process

Using ABC/ABM procedures will help ensure

maximum returns for efforts expended and
costs that have been incurred.
 Materials Manager’s “Tool Bag”

 Value Added Opportunities

 Additional services offered as incentives
 Value Analysis
 Functionally oriented process
 Best and most economical procedures, products,
equipment, or services
 Meet the needs of the user while reducing the
overall cost involved
 Materials Manager’s “Tool Bag”

 Total Delivered Costs

 All aspects of the product cycle
 purchase price, receiving, warehousing, delivery
 holding, value of money, pilferage, obsolescence
 Outsourcing
 Reduce the overall cost
 Increase the quality
Let’s Take 5…

It’s time for a

Quick Break!
 Info & Data
 Information Systems
 Data Management
Numbers, Numbers and more Numbers
Systems [technology]
 Information Systems and Data
Management
 Direct acquisition and implementation of
an automated, system-wide materials
management information system
 15 items
 Recall – 3 items
 Application – 9 items
 Analysis – 3 items
 Information Systems and Data
Management
 Materials Management Information System (MMIS)
includes:
 Purchasing, Receiving, Inventory
 Interfaces to:
 Accounts payable
 General ledger
 Patient accounts
 Surgery
 Other clinical departments (as determined)
 Information Systems and Data
Management
 Selection Process
 Multi-disciplinary taskforce
 Identified processes
 Research marketplace
 Determine functionality requirements
 Develop RFP
 Demonstrations
 Develop project plan
 Information Systems and Data
Management
 Electronic Data Interchange
 Transmit data between computer systems
 Standard communication protocols
 Health Industry Business Communication Council
(HIBCC)
 American National Standards Institute (ANSI)
 ANSI x .12
 File Transfer Protocol (FTP)
 Information Systems and Data
Management
 Bar-coding standards adopted by HIBCC
 “Code 39” or “Code 3 of 9”
 EDI data sets most commonly used:
 832-price catalog
 850-purchase order
 855-PO confirmation
 856-advance ship notice / auto receipt
 810-invoice
 Information Systems and Data
Management
 The Internet and Business
 WWW – World Wide Web
 XML – Extensive markup language
 HTTP – Hypertext transfer protocol
 UML – Unified modeling language
 URL – Uniform resource locator
 LAN – Local area network
 ERP – Enterprise resource planning
 Purpose of CMRP Certification

 Recognize individuals who meet eligibility.

 Encourage continued personal and
professional growth in the practice.
 Provide a national standard of requisite
knowledge required for certification.

Our Standard of Excellence

Be Proud of It!
Questions?
 Samples Questions

Which of the following is the correct sequence of

stages in the process improvement cycle?
1. Improve
2. Measure
3. Control
4. Define
5. Analyze
A. 1,4,5,3,2
B. 2,1,5,3,4
C. 4.2.5.1.3
D. 5,1,4,2,3
 Sample Questions

The Joint commission standards for Environment

of Care require that the Materials Management
department have which of the following?
A. A cost reduction plan
B. A value analysis program
C. An employee development plan
D. An emergency management plan
 Sample Questions

 An effective linen management program

includes
 1.  monitoring and modifying linen PAR levels.
2.  eliminating linen services on weekends and
holidays.
3.  tracking linen loss rates.
4.  reporting linen utilization to customer
departments.
 A. 1, 2, and 3 only C. 1, 3, and 4 only
 B. 1, 2, and 4 only D. 2, 3, and 4 only
 Sample Questions

 EXPLANATIONS:
 (c) 1. Monitoring and periodically modifying periodic automatic
replenishment (PAR) levels are essential to assuring customer
departments have the appropriate selection and quantity of
items given changes in demand.
 (u) 2. Eliminating may be an option, but an effective linen
management program would be adjusted based on demand and
related cost/benefit analysis.
 (c) 3. Tracking linen loss rates by linen item type, and
understanding the means whereby items are lost, are pivotal
to developing a loss minimizing or lost linen recovery
program.
 (c) 4. Reporting linen line item costs and utilization reports are
key elements of an effective linen management program
 Sample Questions
 In the event of a positive biological indicator in
a sterilized load, which of the following steps
must be followed?
 1.  Check wrapping for integrity.
2.  Isolate the load.
3.  Rewrap and reprocess the load.
4.  Notify infection control and risk
management if any sets were used before the
test was read.
 A. 1, 2, and 3 only C. 1, 3, and 4 only
 B. 1, 2, and 4 only D. 2, 3, and 4 only
 Sample Questions

 EXPLANATIONS:
 (u) 1. Instrument wrapping will not affect the
biological indicator.
 (c) 2. Load isolation is part of the recall
process.
 (c) 3. Isolation and reprocessing of the load
contents are parts of the recall process.
 (c) 4. Notification of a positive biological
indicator is part of the recall process
 Sample Questions

 Which organization develops manufacturing

standards for surgical instrumentation?
 A. AHA
 B. AORN
 C. ASHCSP
 D. AAMI
 Sample Questions

 EXPLANATIONS:
 (u) A. The American Hospital Association (AHA) develops
policies and standards, but not those related to
instrumentation.
 (u) B. The Association of Operating Room Nurses (AORN)
develops sterilization standards, and may make
recommendations about instrumentation, but does not set
instrumentation standards.
 (u) C. The American Society for Healthcare Central Service
Professionals (ASHCSP) does not develop instrumentation
standards.
 (c) D. The Association for the Advancement of Medical
Instrumentation (AAMI) sets instrumentation standards
 Sample Questions

 Specify the parameters required to assure

sterilization has been met. 
 A. temperature, time, and pressure
 B. steam, pressure, and chemical indicator
 C. pressure, contact, and packaging
 D. heat, humidity, and time
 Sample Questions

 EXPLANATIONS:
 (c) A. Time, temperature, and pressure are
parameters indicated on the sterilization chart/graph
for each type of sterilizer for each cycle.
 (u) B. Time, in addition to steam and pressure, is
required for a complete sterilization cycle.
 (u) C. Although pressure is required, there is not a
manner in which contact can be determined,
packaging is not required for flash sterilization.
 (u) D. Heat is equivalent to temperature, humidity is
not a measurable parameter, and time is required
 Sample Questions

 A Health Insurance Portability and Accountability

Act (HIPAA) compliance program for a purchasing
department should include a
 1.  vendor confidentiality statement covering
protected information.
2.  clause inserted into every contract that covers
protected information.
3.  statement reflecting the facility gifting policy.
4.  statement describing actions taken if a policy is
violated.
 A. 1, 2, and 3 only C. 1, 3, and 4 only
 B. 1, 2, and 4 only D. 2, 3, and 4 only
 Sample Questions

 EXPLANATIONS:

 (c) 2. Hospitals must protect themselves

from disclosure of protected information that
a vendor may acquire. They must also
articulate and disclose action steps for
failure to comply with HIPAA-related
policies. While a gifting policy should be part
of a hospital's code of employee conduct, it
is not essential and does not pertain to
HIPAA.
.
 Samples Questions

 The highest level of infection control that

can be achieved with peracetic acid is
 A. sterilization.
 B. high-level disinfection.
 C. decontamination.
 D. disinfection.
 Sample Questions

 EXPLANATIONS:
 (c) A. Peracetic acid kills gram-positive and
gram-negative bacteria, fungi, and yeast in
fewer than 5 minutes of processing time. The
FDA has approved peracetic acid as a sterilant.
 (u) B. See Explanation A.
 (u) C. See Explanation A.
 (u) D. See Explanation A
 Sample Questions

 If a vendor representative is involved in a

surgical case, which of the following
information may not be disclosed to the
vendor's company under the Health Insurance
Portability and Accountability Act (HIPAA)? 
 A. items used in case
 B. physician's name
 C. case date
 D. patient diagnosis
 Sample Questions
 EXPLANATIONS:
 (u) A. The vendor representative will need the
items used in order to bill the facility for the items
used and restock the vendor-managed inventory
(VMI).
 (u) B. The physician's name is not considered
confidential under HIPAA.
 (u) C. The case date is not covered under HIPAA.
 (c) D. Under HIPAA, patient information is
considered confidential, and may only be disclosed
to the particular parties involved
 Which of the following waste separation strategies in
the operating room will result in the lowest amount of
red bag waste and be in compliance with (OSHA)
Bloodborne Pathogens Standards?
 A. All waste coming out of an operating room suite must be
contained in a red bag.
 B. Waste from an operating room suite that is generated before a
patient enters the room can go in regular trash, but all waste
generated after the patient comes into the room must be
contained in a red bag.
 C. Waste from an operating room suite that is soiled, but not
dripping, with blood or body fluids must be contained in a red bag
and all other waste can go into regular trash.
 D. Waste from an operating room suite that is saturated with
blood or body fluids must be contained in a red bag and all other
waste can go into regular trash.
 Sample Questions

 EXPLANATIONS:
 (u) A. See Explanation D.
 (u) B. See Explanation D.
 (u) C. See Explanation D.
 c) D. According to OSHA Standards, only waste that
is saturated with blood or body fluids must be
contained in a red bag. Even if there is evidence of
blood or body fluids on the items, they do not
automatically need to be disposed in red bags. The
amount of blood or body fluids must be enough that
the item is completely saturated so that the fluid may
drip off or flake off once dried
 Sample Questions

 Corporate compliance is a program that relates

closely to an organization's 
 A. ethics.
 B. mission.
 C. goals.
 D. finances.
 Sample Questions

 EXPLANATIONS:
 (c) A. The intent of a corporate compliance program is to
observe the spirit of the law, and therefore closely relates to
the ethics of the organization.
 (u) B. Corporate compliance does not directly affect the
mission of the organization.
 (u) C. Corporate compliance does not directly affect the goals
of the organization.
 (u) D. Corporate compliance does not directly affect the
finances of the organization although it influences the
prevention of fraud.
 Sample Questions

 According to Dr. W. Edwards Deming, quality

transformation rests on which of the following key
tenets?
 1.  Decisions must be based on fact.
2.  The people who know the work best are the ones who
perform it.
3.  Graphically displayed information determines best course
of action.
4.  Groups of people working in teams can be more successful
than individuals working alone.

 A. 1, 2, and 3 only C. 1, 3, and 4 only

 B. 1, 2, and 4 only D. 2, 3, and 4 only
 Sample Questions

 EXPLANATIONS:
 (c) 1. Deming's work focuses on people,
processes, and workflow.
 (c) 2. Deming's work focuses on people,
processes, and workflow.
 (u) 3. Graphically displayed information is a tool
to illustrate concepts and is not a key tenet.
 (c) 4. Deming's work focuses on people,
processes, and workflow.
 Sample Questions

 The purpose of a SWOT analysis is to

 A. understand current strategic position.
 B. identify safety hazards in the environment.
 C. determine appropriate staffing levels.
 D. assess the needs of customers.
 Sample Questions

 EXPLANATIONS:
 (c) A. Examining the aspects of an institution's
strengths, weaknesses, opportunities, and
threats during a SWOT analysis is intended to
give information about strategic positioning and
possible tactics to attain objectives.
 (u) B. See Explanation A.
 (u) C. See Explanation A.
 (u) D. See Explanation A.
 Sample Questions

 Which of the following is a strategic objective?

 A. Reduce inventory by the end of the fiscal
year.
 B. Reduce inventory by 15% and maintain
customer satisfaction.
 C. Reduce inventory by 15% by the end of the
fiscal year.
 D. Reduce inventory by 20% and increase
customer communication
 Sample Questions

 EXPLANATIONS:
 (u) A. This response lacks a quantitative
standard.
 (u) B. The inventory reduction target is clear
and measurable, but there is no time reference.
 (c) C. The objective and the time frame are
clear and able to be measured.
 (u) D. The objective of reduction is clear, but
there is no time reference.
 Sample Questions

 Total capital equipment life cycle costs

include the:
 A. Depreciation expense
 B. Initial purchase price
 C. Future replacement price
 D. Manufacture’s standard warranty price.
 Sample Questions

What does FOB destination mean?

A. The buyer pays all freight charges
B. The seller pays all freight charges
C. The seller retains ownership in transit
D. The buyer retains ownership in transit
 Sample Questions

A basic stock out ratio is calculated by dividing

the
A. Reorder point by the lead time
B. Average usage by the monthly receipts
C. Number of lines out by the number of lines
ordered
D. Number of stock outs by the number of
receipts
 Samples Questions

To maximize return on investment for a new

MMIS, implementation processes should do
which of the following?
A. Encourage and act on user feedback
B. Utilize the system’s “best practices.”
C. Incorporate customization of the system as
part of the overall plan
D. Map business processes to system processes
immediately after activation
 Sample Questions

Which of the following is the LEAST effective

strategy for a hospital surviving a prospective
payment system?
A. Laying off staff
B. Increasing efficiencies
C. Reducing budgetary costs
D. Maximizing payment from contractual payers
 Sample Questions

A hospital is considering developing a sterile custom pack

program. To help offset initial start-up costs, the
hospital may market its services to smaller facilities
within a 50-mile radius. The hospital’s MM department
should consider which of the following before making
this decision?
1. A market review of other facilities to determine if there is interest
2. A cost analysis of equipment, supplies and labor needed for the
venture
3. A comparative analysis of in-sourcing and out-sourcing to determine
cost benefit ratio
4. A report stating how much expansion would be possible for the MM
department
 continued

 A. 1,2 and 3 only

 B. 1,2 and 4 only
 C. 1,3 and 4 only
 D. 2,3 and 4 only
 Samples Questions

Turns are defined as a basic measure of

efficiencies in:
 A. Management
 B. Vendor delivery
 C. Financial control
 D. Inventory control
 Sample Questions

To establish accurate product data in the MMIS,

data synchronization requires common
manufacturer name, manufacturer product
number and
A. Expiration date
B. Packaging data
C. Latex indicator
D. Lot number
 Sample Quesitons

Early Steps when choosing a replacement

computerized MMIS are to
1. Define current cost of operations
2. Select a task force
3. Define functional requirements
4. Select a vendor
A. 1,2 and 3 only
B. 1,2 and 4 only
C. 1,3 and 4 only
D. 2,3 and 4 only
 Sample Questions

When a capital requisition has been generated, a

buyer needs to take which of the following
criteria into account to determine the best
method of procurement?
A. Shortages in the industry
B. Lease or purchase decision
C. Whether an item is in stock
D. Economic events in the industry
How did you do?
Questions?
Additional Ways to Prepare for the Exam
 AHRMM CMRP Candidate Handbook and Application (Light Blue Book, free)
http://www.aha.org/aha/Certification-Center/files/2008CMRPhandbook.pdf
 AHRMM Materials Management Review Guide/CMRP Examination Review Guide,
third edition, 2009, (Dark Blue Book, $$)
 VHA’s proprietary instruction presentation [or check with your GPO]
 CMRP presentation [this presentation will be posted on-line]
 AHRMM, National Meetings
 AHRMM Webinars
 Other AHRMM Regional Chapters
 Optional purchase of the “pre-test” from AHRMM
 Optional purchase of the Webinar CD
 Develop internal study sessions (brown-bag-lunch) with your peers or at your
member site
 Contact either of us or any WSHMMA board member