Healthcare providers and hospital management staff are always looking for ways to reduce costs without sacrificing quality of care. It’s natural—while a hospital saves lives every day, it’s also a business. One facet that’s often overlooked? Healthcare contract management.
Effective contract management can play a critical role in tipping the scales in the provider’s favor. But what are the best practices in healthcare contract management that all providers need to be aware of?
Best Practices for Healthcare Contract Management
What does best practice mean in health care? It’s the gold standard: it’s increasing efficiencies without affecting patient care. So, what are these best practices when it comes to healthcare contract management and payor contracting?
- Using automated contract management systems
- Standardizing processes across all contracts
- Optimizing security
- Organizing your system
- Taking advantage of healthcare contract management specialists
Payor Contracting Revenue Quiz
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Use A Contract Management System with Automated Processes
The majority of transactions within a healthcare organization are subject to contracts. These contracts can have a significant impact on both daily business operations and your bottom line. Despite this, far too many healthcare providers rely on manual, ad hoc contract management. In fact, according to a 2019 Black Book study:
“96% of American health systems and provider organizations participating report either not having a contract management system entirely using manual processes or have a system that is outdated and inadequate to address value-based care.”
Manual processes inevitably increase your risk and costs. In fact, Black Book estimates that “Manual contract management cost health providers and systems nearly $157 billion dollars collectively per year.” You need healthcare contract management software that facilitates the transition from a fee-for-service to a fee-for-value model and helps:
- Develop payor contracts
- Improve payment accuracy
- Improve negotiating managed care contracts
- Minimize contract risk
- Audit tracking and reporting
Standardize Contract Processes
It’s vital that you establish a clearly defined process for every agreement and contract type. By taking these actions, you’ll be able to both ensure compliance and create additional efficiencies. Typically, the phases in the contract process include:
- Initial request
- Agreement review
- Final document storage
Creating and renewing a healthcare contract is complex and they require multiple people to submit, correct, approve, and sign forms, creating plenty of room for delays and errors. By standardizing the process, you can streamline practices to help prevent mistakes and wasted time.
Thanks to HIPAA, HITECH, and the various other federal regulations and privacy guidelines, compliance is mandatory. Failure to comply with privacy and security protocols can result in significant harm to both your reputation and bottom line. An efficient contract management system allows you to link each contract to the relevant security regulations. This creates seamless, company-wide, compliance integration.
Organize Your System
Having a contract management system is useless if you’re unable to instantly access the files you need when you need them. Your organization will likely have hundreds of, if not thousands, of agreements with clients, vendors, and other businesses. And when even just a 10% loss of contracts could result in serious compliance issues, you’re better off having a contract management solution that helps document, categorize, and sort all of your many contracts such as:
- Physician agreements
- Partnerships with other healthcare organizations
- IT contracts
- Custodial contracts
- Security contracts
- Patient agreements and medical records
- Transfer agreements
- Medical equipment and supplies vendors
- Office equipment and supplies vendors
- Media contracts
- PR contracts
By taking this step, you can make it much simpler to templatize entire complex contracts or automatically populate commonly used clauses, saving time and preventing headaches in the process.
Taking Advantage of Healthcare Contract Management Specialists
The healthcare industry has been rapidly changing over the past decade thanks to technological disruption and new government directives and mandates. Many providers have had to adjust to these changes on the fly. Throw in complicating factors—compliance regulations, the demand for heightened security surrounding private electronic health records (EHR), and the constant time pressures hospitals are under—and the proper plan of action becomes even less clear.
Every facet of hospital management has been forced to adapt to these disruptions. Contract lifecycle management solutions is no different. Contracts need to reflect the most current laws and regulations, which is why many providers are taking advantage of contract management specialists.
PayrHealth: An Extension of Your Contract Management Team
Partnering with a healthcare contract management system helps you gauge relationships and leverage actionable data more effectively. That’s where PayrHealth comes in.
PayrHealth offers providers a healthcare contract management system and a dedicated team of healthcare contract managers that provides all of the techniques, tools, and relevant information you need to properly analyze data and ensure that you have total visibility and are prioritizing the right contracts. Never again fall into the statistics of 70% of providers encountering closed networks or having a payor tell them “no,” “we have a preferred partner,” or “come back later.”
PayrHealth captures every major aspect of payor contract interactions and then maps out the most effective relationship path to streamline payment and get the results your organization demands.
Healthcare Finance. Efficient hospitals operate on -2% margins in Medicare payments, MedPAC reports. https://www.healthcarefinancenews.com/news/efficient-hospitals-operate-2-margins-medicare-payments-medpac-reports
PR Newswire. Value-Based Care Modeling Drives Meteoric Demand for Contract Management Tools per Black Book’s CFO Survey, Axiom by Kaufman Hall Rated Top Solution. https://www.prnewswire.com/news-releases/value-based-care-modeling-drives-meteoric-demand-for-contract-management-tools-per-black-books-cfo-survey-axiom-by-kaufman-hall-rated-top-solution-300867575.html