In the complex and fast-paced healthcare industry, effective contract management is an essential function. Contract terms are often phrased with the patient in mind, ensuring quality care on the part of both contracting parties, making them extremely important to the field. However, managing contracts is an undertaking for healthcare organizations of any size. Having a solid contract management process can significantly benefit your practice, so here are a few of our top ways to improve contract management with the help of PayrHealth.
Why are Contract Management Processes Important?
Overseeing contracts is an intricate responsibility for healthcare organizations. From provider contracts to merchant arrangements, these contracts cover clinical and non-clinical services and depend on rigid regulations to protect patients. However, healthcare organizations often have many different administrative tasks that require significant attention and precision, meaning contract management often isn’t given the capacity it needs.
In this case, contract management can be a source of revenue leaks and setbacks for your team. A contract written with your needs in mind can offer you control over many different facets of your business and your relationship with payors. However, a poor contract can be time-consuming, frustrating, and even costly. Simply put, a good contract management system can result in a stronger position for your healthcare organization in virtually every area.
Step 1: Pay Attention to Renewal Terms
Production network costs continue to rise, affecting healthcare organizations’ bottom lines. Between 2019 and 2022, clinic supply costs per patient expanded by 18.5%, outperforming inflation rates. Crisis care supplies saw a much more noteworthy increment of almost 33% during this period. As such, allowing contracts to auto-renew has put healthcare organizations at serious financial risk.
As a baseline, contracts should expressly state renewal or expiration terms; however, following through is also key. Set notifications for important renewal dates so you don’t miss them. By doing this, you can assess your costs, look for revenue leaks, and plan for negotiations.
Step 2: Digitize Contract Management
Some clinics still depend on manual, paper-based contract management processes, preventing access by appropriate staff. This can make contract negotiations exceedingly difficult, especially where preparation is concerned. If applicable, consider implementing contract management software as quickly as possible.
Manual contract management also jeopardizes revenue and compliance, costing healthcare businesses an expected $157 billion yearly. Not only can contract management software allow access to the appropriate people, but it can also integrate automated workflows and save time. Finally, it can reduce the risk of misplacement which may come with additional costs, the same as costs associated with non-digital contract management by payors.
Step 3: Ensure Compliance with Organizational Policies
Building your contracts around organizational policies can help mitigate risk and maintain compliance. When you integrate policy into the contract management process, you can utilize automation more effectively. However, involving your compliance department in this process is key, since not all contract managers have insight into key contract activities. Involving compliance can help reduce potential risks and penalties. A few additional ways to do this include:
- Creating timesheets based on contract terms and conditions, which can be used to deliver services as agreed upon
- Creating surveys to monitor and manage vendor relationships, reducing compliance risks
- Creating ways to track non-monetary compensation by providers
- Creating reports on potential conflicts of interest at every organizational level
Step 4: Have One Source of Truth
When many people become involved in the contracting process, it’s easy to end up with multiple contract versions, conflicting documents, and incorrect information about the parties involved. Even with the best intentions, annotations, addendums, and revisions don’t always reach every copy of your contract. Keeping the contract in one place (via a contract management platform) can improve risk management by ensuring there’s a single authority and not multiple conflicting versions. This guarantees compliance and can even support legal issues if they arise.
Step 5: Implement Contract Data Safety
Paper contracts or those stored on insecure platforms can be at serious risk of data theft. Controlling who has access to your business contracts and how they’re accessed is a valuable part of the contract management process. Best practices include implementing single sign-on policies which allow you to monitor contract risks and employees. It’s also best to invest in contract management software that can provide additional security measures and protection. Contract data, electronic signatures, and sensitive documents are all valuable targets for thieves and hackers, which means mitigating risk is an essential step.
Contract Management with PayrHealth
Effective contract management in healthcare organizations is crucial for maintaining compliance, supporting operational efficiency, and protecting revenue streams. However, contract management practices can be difficult to carry out for healthcare organizations already burdened with administrative tasks. At PayrHealth, our team has combined decades of healthcare industry experience and can help you implement a robust contract management process to boost key performance indicators and get more out of your contract lifecycle. To learn more about our contract management processes and how we can help, contact PayrHealth today for a free consultation.
