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How to Ensure Effective Healthcare Contract Management?
The healthcare industry is one of the most competitive industries in the world. With new challenges in the form of the rising drug trial and insurance costs, mergers and acquisitions, increased regulatory requirements, and a demand for enhanced patient-focused healthcare experience decreased government spending, etc., are just adding to the overall complexity.
So, in order to deal with a plethora of challenges, healthcare firms are looking to transform digitally to better manage processes, leverage data for insights and compliance, improve operational proficiencies, and more. If we talk about a key process that holds immense importance and care is the contract management process since it directly impacts the working of a healthcare organization.
- According to the latest Black Book Market Research, approximately $157 billion is spent on manual contract management every year by healthcare providers.
- Another study revealed almost 96% of healthcare firms do not have an appropriate contract management system in place.
- Also, adopting value-based care (VBC) model is fast becoming the need for CFOs, and that is only possible with comprehensive contract management tools.
Defining a Healthcare Contract
A healthcare contract is your traditional contract that is formed between two consenting parties, and in healthcare, usually between a physician and healthcare provider, a managed care organization (MCO) like a provider-sponsored network, health maintenance organization, integrated delivery system, or a different health care plan.
Apart from this, contracts are formed between healthcare providers and other employees, vendors, and more. These contracts are focused on the roles and responsibilities of each party, along with their requirements to adhere to state and federal laws.
- Physician Employment Contract
- Technology Licensing
- Partnerships with other healthcare organizations
- Physician Recruitment Contract
- Transfer Agreements
- Equipment Sales and Leases
- Supervision Agreements
- Purchased Services Agreements
- Management Services Arrangement
- Patient agreements and medical records
- Medical Directorship Arrangement
- Executive Compensation and Employee Benefits Arrangements
- Media and public relations contracts
7 Best Healthcare Contract Management Practices
Every healthcare firm forms multiple contracts with different individuals/parties and almost 10% of these contracts get lost. This creates an urgent need for an efficient hospital contract management system since only then firms can provide their patients with the best care, bring down operating costs, keep compliance with regulatory laws, mitigate risks, and more.
This is the reason every healthcare firm is looking to adopt the digital approach and it is essential that the following practices are considered and implemented for it:
1. Contract Process Standardization
Since multiple contracts get created and moved throughout the healthcare organization for submissions, corrections, approvals, and signatures, there is a need for a standardized process. It will not only ensure completion of essential tasks at every step of contract drafting and thereafter, but also minimize mistakes and time wastage.
2. Centralized Repository
The healthcare industry is one industry that involves maximum paperwork, and this makes organizing different files in an efficient manner and at a central place a must since it is the only way you can gain instant access to these files. This includes putting custom tags, editing certain viewpoints for further clarity, having advanced search options for locating specific folders and files, etc.
This not only helps in completing tasks quickly like contract reviewing, making decisions based on particular information but also enables firms to recognize opportunities within contracts for bond strengthening and avail benefits from collaborating with vendors, partners, and others.
3. Workflow and Process Automation
This is one of the best advantages that come along with electronic document management. You not only are able to automate the contract management workflow but also create accountability for it. Every contract drafting and review process gets hampered easily if a contract gets stuck in someone’s inbox, delaying the time for meeting the deadline, and affecting business relationships eventually.
However, with automated workflows, this can be prevented easily as regular reminders are sent to individuals regarding contract and termination dates, key obligations to be met, etc.
4. Comprehensive Reporting
After you have successfully organized your contracts and automated alerts to meet deadlines, the next step is of key metrics reporting. Firms must work with their risk and compliance teams to establish specific data reporting and frequencies, leading to enhanced contract transparency and regulation compliance eventually.
5. Database Creation of Frequently Used Legal Clauses and Contracts
There are a lot of legal clauses and types of contracts that are used more than others. By creating a database for all these frequently used clauses with the help of a legal team and automating those into relevant contracts can help firms save a considerable amount of time. Apart from this, such common contracts can be converted into templates for system storage.
6. Contract Linking To Policies and Procedures
Contracts are all about regulatory compliance and adhering to strict guidelines concerning security and privacy. Firms not only need to take care of billing and patient data but also ensure compliance with multiple regulatory bodies (HIPAA, False Claims and Joint Commission, Stark I, II, III, GLBA, HITECH, Federal Anti-Kickback Statute).
Policies/procedures go hand in hand with contracts. For instance, if you have a procedure or policy concerning security, you may contact a HIPAA security advisor for an associated contract.
A proficient contract management system is one that has the potential to link every contract to relevant procedures and policies, paving the way for smooth integration from a compliance point of view. For this, firms might be required to adopt both an electronic contracts management system and a policy management system.
7. Security Optimization
Contracts comprise sensitive information and when storing electronically, taking high-security measures becomes imperative, especially to keep a data breach at bay.
For this, ensure server compliance with required rules and regulations and set up a user hierarchy and two-factor authentication, along with providing a user with full/partial access, read-only or no view status, etc. Apart from this, having digital watermarks on healthcare files helps in preventing unauthorized sharing.
We hope this post enabled you in understanding contract modeling in healthcare. Today’s healthcare contract management is all about going digital and adopting practices that help in streamlining the processes, minimizing the risks/costs, and meeting regulatory compliance. With immense competition in the healthcare industry and patients demanding more personalized services, healthcare firms need to devise strategies that help them offer the same.
This is only possible when firms get rid of their traditional manual processes or seek a helping hand to free them from managing such non-core tasks and instead focus on core competencies and enhancing the patient experience.
In case you need a highly skilled and professional team to support you with contract management, you may get in touch with Cogneesol. It has been providing unmatched contract management outsourcing support at cost-effective prices to healthcare firms and businesses worldwide since 2008. Contact us now to start your free trial!
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