What Is Contract Management for Healthcare?
The day-to-day operations of a healthcare provider involves the management of contracts through mostly manual processes like paper-based storage, emails, spreadsheets, and shared drives - which can be detrimental to the efficiency of the hospital management system.
On average, companies lose 9.2% of their yearly revenue to problems arising from poor contract management systems. A Black Book study in 2019 revealed that about 96% of American health systems either run on manual contract management processes or an outdated system that is inadequate to provide value-based care.
There is an increasing need to reduce costs in the healthcare industry and one promising solution is the automation of contract management for healthcare to significantly cut down yearly losses caused by manual or outdated contract management processes. This cost reduction can be achieved by implementing a highly efficient contract lifecycle management (CLM) software that operates on a fee-for-value model.
What Is Contract Management for Healthcare?
Strong contract management for healthcare includes highly effective systems that handle every contract request or renewal, including wet signatures; while ensuring complete compliance with industry regulations (such as HIPAA, PHI, and BAAs).
An effective contract management system for healthcare greatly benefits hospital management, patients, insurance providers, employees, business partners, and everyone involved in the healthcare industry due to reduced wastage costs and risks associated with contract breaches.
Why Is Automated Contract Management Important in Healthcare?
In every hospital function, there are many administrative tasks that are done on an hourly to daily basis to ensure the facility is running properly. From the filing of documents to record keeping of bills, receipts, and hospital expenses, to tracking down necessary compliance regulations.
The workload of these administrative tasks is very cumbersome if done manually. The amount of paperwork, possible human errors, and time wasted from sorting documents makes this manual process of handling hospital contracts highly ineffective.
An average hospital has over 1,000 business relationships, which implies the healthcare system deals with a lot of contracts. Mismanagement of these contracts can arise from information leaks, more common to paperwork-based systems, which causes legal problems due to breach of agreements.
How Can Contract Management Software Benefit Your Healthcare Facility?
By switching to automated contract management software, you are sure to enjoy the following perks:
1. Effective Tracking of Milestones and Renewals:
Unlike the manual method, by using contract lifecycle management (CLM) software, every healthcare contract is automatically tracked up to its renewal date. This ensures absolute compliance with contract deadlines and the smooth running of long-term contracts.
The best software also has automatic reminder features to alert both parties of incoming important milestone days (as configured by the user) ahead of the deadlines.
With this technology, hospitals can avoid missing out on audits, compliance, payments, expiration, or reimbursement dates.
2. Reduce the Risk of Contract Leaks and Legal Privacy Issues:
The best contract management for healthcare software has a robust security framework, with 256-bit encryption, added layer of security via two-factor authentication, and anti-virus protection. All these features help to keep hospital contracts safe and secure.
The high-security features prevent any leaks or hack attempts from external sources. It also eliminates the risk of information leaks encountered in paperwork-based systems, where unapproved personnel such as low-level employees, can have access to sensitive documents by chance during manual administrative tasks (such as photocopying, and document delivery).
3. Simpler Management System:
With automation, the overall workload of handling a large number of contracts is greatly reduced. The use of software can help relieve certain duties such as contract negotiations, procurement risk analysis, and reporting total spending of specific vendors and business partners.
4. Ease of Contract Creation:
Unlike manual systems where each new contract will require a lot of paperwork, the use of software helps automate contract creation with relative ease. Numerous contracts can be created at a go with a well-designed automated template that eliminates any possible risk of mistakes encountered due to an overload of new contracts in the manual method.
What Are Contract Management for Healthcare Best Practices?
Some of the best practices for effective implementation of contract management for healthcare include:
1. Effective Use of Automation Tools:
Automation helps to avoid repetitive and tedious tasks by filling in certain data and sending out automated alerts to speed up the operations of contract management.
2. Integrate Contract Management into CRM:
The integration of customer relationship management (CRM) into an effective contract management software helps to avoid redundancy and ensures that the contracts are accessible from both the patient and the vendor records.
3. Matching Contracts to their Regulating Policies:
Unlike the use of a manual contract management system where it’s nearly impossible to keep track of policies guiding a contract, with software you can easily match every contract to their policy digitally. This helps to keep everything highly organized.
4. Taking Regular Compliance Audits:
It is important to take frequent and consistent compliance audits on your contracts to detect any default in the system or change in the compliance level. Non-compliance may arise along the way which can create a mismatch between federal and state regulations. Hence, there is a need to regularly use external auditors to carry out checks on your system just in case you missed something important.
Evisort Contract Management for Healthcare Tool
Evisort remains the major player in the healthcare contract management landscape due to its feature-rich CLM software, in use by thousands of healthcare providers. Evisort CLM software is tailored-made to solve the major issues arising in the healthcare contract management system with its fee-for-value and scalable solution model.
To learn more about how Evisort's contract management for healthcare software can assist your organization with an efficient contract management system, contact us here.
Contract Management for Healthcare Success Stories
- Care Initiatives ensures contract compliance with AI
- McKesson achieves contracting success at scale
- Five Rivers Health Care Centers transformed their credentialing and contract management systems using AI-powered contract management and analysis software.
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