Why integrate your ERP with a Healthcare-specific CLM?

A healthcare-specific CLM meets healthcare’s unique business and regulatory compliance challenges.

A healthcare-specific CLM meets healthcare’s unique business and regulatory compliance challenges.

Healthcare organizations must control costs and increase operational efficiency to survive the financial crisis triggered by COVID-19. Your enterprise resource planning (ERP) software plays a key role in doing that, but it isn’t equipped to meet healthcare’s unique business and regulatory compliance challenges by itself. Therefore, you need to integrate your ERP with a healthcare-specific contract lifecycle management (CLM) solution. Pairing the two links contractual and operational data to shine a comprehensive light on problem areas and potential fixes, empowering your organization to achieve much tighter control over your costs.

Agnostic contracting systems are designed to serve diverse industries—not healthcare. Since these agnostic CLMs don’t offer insight into the unique components of healthcare contracting, reliance on such systems diminishes transparency and compliance safeguards. Healthcare contracts must comply with state, federal, and accrediting body regulations to prevent costly penalties. You need a healthcare-specific CLM that is specifically designed to accommodate:

Physician contracts. Provider compensation is closely regulated by federal fraud and abuse laws, including the Anti-Kickback Statute (AKS) and Stark Law. To comply with the AKS and Stark Law, provider compensation for clinical and administrative activities must be consistent with Fair Market Value and not consider the value or volume of referrals the provider brings to the healthcare organization. You need to examine variability in total compensation for your providers, identifying payments that exceed FMV and may lead to compliance violations. You also need to track providers’ gifts/nonmonetary compensation from and financial relationships with drug and medical device companies to identify potential conflicts of interest.

Integrating your ERP with your healthcare-specific CLM helps you comply with provider compensation regulations and ensure that providers are paid in accordance with their contracts. By linking your ERP and CLM, employment status changes are updated and pushed to your ERP, helping you accurately maintain your Active Directory. Physicians and other employees who leave your organization should no longer have access to certain software and electronic health records containing PHI. By maintaining an accurate Active Directory, you can control that access and prevent violations of the Health Insurance Portability and Accountability Act (HIPAA).

Managed care contracts. Like physician contracts, managed care contracts are governed and complicated by intense regulatory demands. They’re subject to laws related to the assumption of financial risk, provider contracting, network adequacy, and delegation agreements. For example, Medicaid managed care operates within a complex legal framework that includes contracts spelling out a state’s performance expectations regarding coverage, care, access, payment, quality improvement, and other matters. The contracting process is guided not only by federal rules but also by each state’s Medicaid policy and the complex procurement rules applicable to major state purchases. Contract analytics helps you keep track of the various requirements, relevant terms, and conditions in your managed care contracts.

RELATED WHITE PAPER: The Experts’ Guide to Healthcare Compliance

Real estate leases. ASC 842, the US GAAP accounting standard, has changed the way businesses, particularly nonprofits, record leases on their books. Now, even a simple billboard rental is a lease. You must be able to identify agreements that are categorized as leases under the new lease accounting standards, helping you comply with GAAP ASC 842. This is very important for healthcare organizations. If the SEC’s Division of Corporate Finance reviews your healthcare organization’s filings, you may face these consequences for noncompliance: 1) the costs of a) bringing in fraud examiners to investigate (if fraud was involved), b) responding to an SEC Comment letter, and c) bringing in consultants to restate prior years; 2) auditors being fined for the misstated financial statements; and 3) lawsuits from investors (in the case of public companies) for the misstated financial statements. Employing contract analytics to identify possible lease clauses helps you comply with GAAP ASC 842 and avoid those penalties.

Outsourced services. ERPs are designed to support vendor management, but only a healthcare-specific CLM can provide the workflows, analytics, and safeguards necessary to effectively address the regulatory and compliance requirements associated with their contract asset. How do you know that the terms of the vendor contract are honored in your invoices? What if a vendor purchase order doesn’t match the agreed prices in the original contract? Has the vendor’s contract expired? Do you have a Business Associate Agreement (BAA) for that vendor? Do you need one?

Organizations that create, receive, transmit, or maintain protected health information (PHI) on behalf of your organization—such as medical billing companies, transcription services, accountants, attorneys—are your Business Associates (BAs). HIPAA requires that BAs that provide services to a covered entity (your healthcare organization) that includes access to PHI must sign a BAA. The Department of Health and Human Services Office for Civil Rights (HHS/OCR) can impose steep fines and corrective action plans if you fail to have a BAA in place with your BAs. Furthermore, if HHS/OCR audits your organization, you must be able to supply your business associate agreements and demonstrate that you’ve conducted due diligence with your BAs. Contract analytics identifies contracts that require BAAs but are missing them.

Integrating your ERP with a healthcare-specific CLM helps you ensure compliance with BAA requirements, compare invoices to contracted rates (to identify overcharges), and eliminate unfavorable and duplicative contracts.

Integrating TractManager’s healthcare-specific CLM with your ERP helps you increase compliance and identify cost-control opportunities. Our CLM 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. Contract analytics promotes compliance by analyzing physician compensation, assessing your managed care contracts, and identifying lease agreements and missing BAA agreements. To learn more, read Better Together: ERP and a Healthcare-Specific CLM Combine to Optimize Cost Control.


Barry Dyer, PMP

Senior Vice President of Consulting

Barry has more than 25 years of experience in management consulting, system implementations and process improvement.


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TractManager’s Contract Analytics tool helped a Northeast U.S. health system analyze 6,000+ contracts in six weeks instead of two years, saving more than $320K in staff salaries.

TractManager’s Contract Analytics tool helped a Northeast U.S. health system analyze 6,000+ contracts in six weeks instead of two years, saving more than $320K in staff salaries.

Manually reviewing the overwhelming volume of data contained in your contract assets to ensure compliance is a daunting and incredibly time-consuming task, which most organizations do not have the time or resources to undertake ...

Better Together: ERP and a Healthcare-Specific CLM Combine to Optimize Cost Control

Agnostic contracting systems are designed to serve diverse industries, not healthcare. This puts your compliance program at risk.

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