Best Practices for Effective Healthcare Contract Management
Anyone involved with managing contracts understands how much attention to detail is required to ensure your agreements remain in good standing. And anyone working in the healthcare industry knows how much work it takes to remain compliant with strict guidelines and industry regulations around things like confidentiality, data protection, and vendor management. When you combine these two, it’s clear that effective healthcare contract management is crucial for any hospital, medical clinic, or other healthcare provider.
This blog dives deeper into the importance of healthcare contract management, and what you can do to mitigate risk throughout the process.
What is a healthcare contract?
A healthcare contract is any agreement between a healthcare provider and its vendors, employees, patients, or partners.
Some common types of healthcare contracts include:
Hospitals and healthcare providers work with various third-party vendors to offer a full range of medical options to their patients, and all of those relationships require in-depth contracts that detail how the program works, what each party is responsible for, and how those services are billed.
And just like every other type of business, hospitals rely on dozens of outside services to manage the day-to-day operations, including everything from cleaning services to IT.
Because medical equipment can be incredibly expensive, it’s often more cost-effective for healthcare providers to lease equipment rather than purchase it. Equipment lease agreements lay out the terms and conditions of the lease, including time frame, costs, maintenance, and renewal options.
Real Estate Agreements
Similar to how hospitals handle medical equipment, most healthcare providers don’t own the buildings they operate in either. Real estate agreements and office leases are especially important in the healthcare industry because of regulations like Stark Law and the Anti-Kickback Statute that place limitations on healthcare providers leasing office space to tenants. Any violations of these laws come with hefty fines and other significant penalties, which is why keeping a close eye on these contracts is so important.
Why is healthcare contract management important for medical billing?
Healthcare payer contracts are often lengthy, complex agreements that define how providers are reimbursed for services provided to insured patients. Because of the complexity of these contracts, it’s not uncommon for healthcare providers to miss deadlines to file claims and ultimately fail to meet conditions for timely reimbursement.
Having a strong healthcare contract management system in place enables providers to increase contract organization, access, and visibility, and in turn keep tabs on the necessary details to maximize reimbursements and renegotiate more favorable terms.
Providers that take advantage of contract management software to store and organize their healthcare agreements always have key contract data at their fingertips, thanks to features like OCR and advanced search. This eliminates hours of wasted time that would normally be spent manually searching through lengthy documents to find specific clauses, key terms, and other relevant information.
A hospital contract manager ensures all healthcare contracts are properly managed throughout the life of the agreement, from reviewing the initial contract pre-signing to the renewal or termination process. Hospital contract managers keep track of important details like deliverables, dates and milestones, and opt-out/negotiation windows, and work to mitigate risk, ensure compliance with industry regulations, and share contract performance and other findings with organizational stakeholders.
Hospital contract managers are also responsible for keeping up with changes to the rules and regulations within the healthcare industry, and identifying needed adjustments in the organization’s contracts to comply with those regulations and avoid costly penalties.
Due to the consequences of letting healthcare contract details slip through the cracks, contract managers often rely on software to help them manage their tasks more carefully. Contract management software helps healthcare contract managers reduce the risk of human error, manage repetitive tasks in less time, and find answers to questions about the organization’s contracts almost immediately.
Tips for a successful approach to healthcare contract management
There are a few things hospitals and healthcare organizations can do to manage agreements efficiently, mitigate contract risk, and make timely, informed decisions using the data found within your contract portfolio.
Create and Follow a Structured Process
By establishing — and sticking to — a structured process for managing healthcare contracts, you and your team will significantly increase your chances of avoiding costly mistakes and managing contracts efficiently. If you have a detailed, documented process that states who is responsible for various parts of the contract lifecycle, what steps a document goes through before and after it’s signed, and when contracts are reviewed, evaluated, and renegotiated or terminated, everyone involved will know what is expected of them at every stage of the process. This will help avoid confusion and make it less likely that an important date is overlooked, a contract is signed without proper review, or a critical document is lost because it wasn’t filed correctly.
Wherever you and your team choose to store your healthcare agreements (network servers, shared drives, dedicated contract management software), be sure your contracts are always organized so you can quickly and easily find the information you need. Every team has different contract storage needs based on the volume of documents and the amount of risk within those agreements (what are the repercussions if an insurance agreement lapses without your knowledge?), so there is no one-size-fits-all solution. The important thing is that your contracts are organized, secure, and accessible.
As mentioned, healthcare contracts are often long, complicated documents, industry regulations are constantly changing, and the repercussions of mismanaging your agreements can be severe. That’s why it’s so important for those involved with managing healthcare contracts to keep an open dialogue with team members, department heads, and other stakeholders.
Work with the risk and compliance teams to be sure you understand the latest regulations and how they impact your active and future contracts. Share relevant details with cross-functional stakeholders so they can make informed business decisions. Remind the appropriate parties of upcoming contract deadlines and milestones so they have enough time to evaluate and take action. The more transparency and communication there is around your organization’s contracts, the easier it will be to mitigate risk and eliminate surprises.
Find the Right Technology to Help
Though there’s no one-size-fits-all healthcare contract management solution, it’s important to identify any challenges you have managing contracts and invest in the right technology to solve those problems. Based on the importance of carefully managing physician contracts, real estate agreements, equipment lease agreements, and other healthcare contracts, dedicated contract management software is a popular solution in the healthcare industry.
Store healthcare contracts in a secure online repository that’s accessible from anywhere
Find key details about your healthcare contracts in seconds with advanced search features
Stay informed of upcoming contract deadlines with automated alerts and notifications
Automate contract reporting by setting up recurring reports that are automatically sent to select stakeholders
Streamline contract signing with electronic signature functionality
Request a demo today to learn why healthcare organizations like Advance Health, Ampla Health, Catholic Health Services, and Lutheran Life Communities use ContractWorks to mitigate contract risk and manage healthcare agreements more efficiently.
ContractWorks is the fast, easy, and affordable way to manage healthcare contracts
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