As every healthcare company knows, the repercussions of not remaining compliant with industry regulations are severe. In August of 2018, William Beaumont Hospital, a regional hospital system based in the Detroit, Michigan area, paid $84.5 million to settle alleged violations of the Stark Law (also known as the Physician Self-Referral Law) and Anti-Kickback Statute in connection with “sweetheart deals” benefitting referring physicians.Read More
It’s not uncommon for contract management to be approached as a top-heavy proposition. This means that organizations invest a great deal up front in preparing to enter contract negotiations, planning optimal positioning, authoring and negotiating contract details and, finally, getting the document signed. But once the ink has dried – whether literally or, given the increasing availability of e-signature tools, figuratively – it’s not uncommon for contracts to be stored away in filing cabinets or on shared drives, and not referred to again until it’s either time to renew or problems arise.
If your organization’s approach to contract management is sign it and forget it, there’s a good chance you aren’t reaping the full benefit of those agreements you’ve invested so much time and effort to negotiate. Research from the International Association of Contract and Commercial Management (IACCM) found that as many as 40 percent of contracts don’t deliver the financial benefits that were intended. If you’re among those who believe their contracts have underperformed, financially or otherwise, it may be that taking this top-heavy approach is the reason why.Read More
Though they’re designed to reduce risk and maximize profit and opportunities, it takes more than just signing and then filing away a contract to realize these benefits. Poorly-managed contracts can be time-consuming, creating backlogs and bottlenecks for legal teams. They can also be expensive: according to the International Association of Contract and Commercial Management (IACCM), nearly 40 percent of contracts don’t deliver the financial benefits they were intended to. On the flip side, IACCM also found that good contract management can help businesses grow their bottom lines by nearly 10 percent annually.Read More
Business relationships have grown more complex in recent years, and thus contract management has had to evolve in order to keep up with the times. To understand how technology has affected contract management, you only have to notice how rare it is these days for contracts to be written on paper instead of electronically.
Larger technological developments will continue to change how contract management is practiced -- perhaps on a level as revolutionary as the paperless contract. Now that we're in a new year, it's a good time to reflect on what lies in store for contract management in the near future.Read More
Implementing a contract compliance program protects an organization against unintentional compliance breaches, which can carry serious penalties. Often, putting together an effective program involves hiring one or more contract compliance managers. Finding the right person to serve in this capacity is a top priority to address compliance effectively. Before determining the most important characteristics of an effective contract compliance manager, it makes sense to review the responsibilities of the role. Some aspects of the job will naturally vary from organization to organization, but compliance management typically involves the following:Read More
Most businesses will have to engage the services of outside vendors at some point in their existence. And, for many companies, contracting with external suppliers is a routine aspect of conducting business. After all, it is often necessary to source parts, obtain goods, or utilize the services of other firms in order for a company to operate in a timely, cost efficient manner. Unfortunately, relying on outside help may also bring about additional issues that can disrupt the very efficiency that was sought. To avoid production disruptions and cost overruns, it is important to establish and maintain good working relationships with reliable suppliers. One of the best ways to improve supplier compliance is by simply having a coherent plan of action in place. Here are three tips to improve supplier compliance:Read More
The terms contract management and contract compliance are often used interchangeably. Although the two business processes do overlap in many ways, and it is not incorrect to intermingle these concepts, there are some slight nuances to each. Perhaps the easiest way to discern the difference is by thinking about contract management as a more internal process focused on the manner in which a company is managing its own contract portfolio. On the other hand, contract compliance is somewhat more externally focused, as it requires an examination of the performance by the other parties to contracts. Despite these subtle differences, contract management and compliance will always be inextricably intertwined as each facet continuously influences the other, as discussed below.Read More
Contracts are critical legal instruments for companies of all sizes in virtually every sector. Although sourcing, negotiating, and drafting contracts can be quite a tedious process, contracting does not end once the agreement is put to paper. In fact, the real work begins once all parties have signed the final documents. To ensure that the terms and conditions of a contract are being performed as stipulated, it is crucial to conduct periodic audits. This may be done at a micro level (i.e., by contract) or at a macro level (i.e., a review of the entire portfolio). Here are some of the key points to consider to perform a contract compliance audit:Read More
Enterprise contract management is a means of streamlining and improving how contracts are stored and reviewed throughout an organization. If you are investigating contract management options, there’s a good chance you already know a manual system is insufficient for your company’s needs. The question is where to go from here.
The more an organization matches the following conditions, the likelier it is that the company would benefit from an enterprise contract management solution.Read More
Contracting is a necessary facet of running a business, with many companies entering into multiple contracts on a daily basis. Of course, given that contracts are legally binding, enforceable agreements, they can carry some pretty significant consequences. Unfortunately, the management phase of the contracting cycle is often overlooked, as emphasis is placed more heavily on the front end of the contracting cycle, which involves negotiations and drafting. This is clearly an erroneous oversight because poor contract management will no doubt result in negative financial outcomes. Here are some key ways that inadequate contract management can impact a company’s financial success.Read More