How To Prevent Costly Financial Leaks in the Contracting ProcessIgnore porous contracts at your own peril.
Contracts significantly impact your health system’s administrative operations and bottom line. Healthcare contracting involves more than procuring the right personnel, equipment, supplies, and services necessary for patient care—while controlling costs. Healthcare contracts must also comply with a myriad of federal, state, and accrediting body regulations. Penalties for noncompliance are steep, in terms of fines and reputational damage. Manual contracting processes are inefficient, time-consuming and slow.
In healthcare, as in most industries, contracting delays result in lost revenue. When provider agreements take too long and delay provider onboarding, healthcare organizations lose hundreds of thousands of dollars per month.
Unfortunately, like dripping faucets that can slowly cause damage, leaky healthcare contracts are too often ignored. Healthcare organizations need to:
Store digital contracts in one central, searchable database. Locating—let alone managing—paper contracts is difficult and time-consuming, particularly when they’re stored in filing cabinets at multiple locations. Keeping track of important terms and conditions, such as auto-renewal dates and termination requirements, is also challenging when contracts aren’t centralized. If you’re still working with paper contracts, your first step toward greater efficiency is to digitize them and house them all together.
Establish and maintain consistent contracting processes using standard templates and automated workflow. As contracts move through the creation and review process, multiple people submit information, suggest revisions, correct mistakes, and ultimately approve and sign the contract. Take advantage of standard forms, templates, and contract language (e.g., clauses and Service Level Agreement language) to create consistent, compliant contracts. Contract variability is associated with excess costs.
Defined and repeatable permission-based workflows standardize your operations—reducing mistakes and saving time—and promote compliance at every stage of the contract lifecycle—from initiation, review, and approval to renewal, amendment, and termination. Custom workflows for different contract types (e.g., physician agreements, purchased services) accommodate various compliance considerations. Workflow automation tells you where a contract is in the process—helping you identify bottlenecks—and notifies you of impending deadlines so you can get the required approval(s) in time.
Avoid auto-renewal of contracts when the terms are unfavorable or the services are no longer required. In the case of a merger or acquisition, you may wind up with duplicate services. If the hospitals joining your health system are in the same geographic area, you won’t need multiple waste management contracts. Use contract analytics to identify redundant contracts and pricing that is higher than benchmarks, helping you determine which contracts should be canceled or should not be auto-renewed. Then use contract management software to track auto-renewal contracts and critical dates and set automated, recurring alerts to review those contracts before the renewal date.
Identify/avoid compliance risks. Contract analytics using Artificial Intelligence technology make it possible to quickly scan thousands of contracts, identifying key clauses. This visibility into your contract data allows you to identify contracts that are missing Business Associate Agreements (BAAs) or analyze provider compensation for compliance with total compensation and Fair Market Value requirements. By doing so, you can avoid penalties for violations of the BAA requirement, Stark Law, and the Anti-Kickback Statute.
Contract lifecycle management software prevents costly financial leaks by automating, centralizing, standardizing, and optimizing your contracting processes. TractManager’s Contract Lifecycle Management Solution combines a centralized, digital contract library with configurable workflows, a Compliance Suite, and AI-enabled Contract Analytics to standardize and optimize the entire contract management process. To learn more, read our white paper—The AI Uprising in Contract Management: You Can’t Control Your Costs If You Can’t Control Your Contracts.
The AI Uprising: You Can’t Control Your Costs If You Can’t Control Your Contracts
Analyzing your contract data helps you secure the right price and terms and prevents expensive compliance violations.