5 Ways Healthcare Businesses Can Enhance Contract Management

Healthcare organizations always look for solutions to manage their costs effectively, trying to save capital by reducing expenses. Meanwhile, they also need to make sure they provide quality care to each patient. While they try to cut costs wherever possible, one aspect that is usually overlooked and can be reviewed for considerable cost savings is contract management.

When not managed properly, healthcare contracts can lead to penalties, which means one hospital can lose thousands of dollars in the name of a contract breach. Furthermore, the larger the contract, the bigger the penalty – a greater monetary loss that can be in millions.

As a healthcare business owner, the best solution for you is to improve contract management, and to help you with that, here are some ways you can follow.

Best Practices to Enhance Healthcare Contract Management

1. Use a reliable contract management system

A large number of all transactions within a healthcare business are associated with contracts. Therefore, these contracts have a significant impact on its daily activities and net income. However, despite that, many healthcare providers manage agreements manually and on a need basis.

96% of American health systems and provider organizations that participated in a Black Book survey reported:

• Not having a contract management system

• Entirely using manual processes

• Having an outdated and inadequate system

Relying on manual contract management processes can put your healthcare business at risk and increase costs.

The same survey revealed that manual contract management costs healthcare providers and systems collectively an estimated 157 billion US dollars per year.

Given the hefty costs involved, it would be better to use a reliable contract management system powered by automation technology, which can help you:

• Improve negotiations for managed care contracts

• Prepare payor contracts

• Increase payment accuracy

• Eliminate contract risks

• Manage audit tracking and reporting

• Reduce contract lifecycle management costs

2. Rework on contract process standardization

Any business process, to be managed efficiently, requires clear fundamental policies. Similarly, you need to define your contract management process clearly if you want to improve it. So, yes, it all starts with setting up or rebuilding the foundation.

By doing that, you become able to meet compliance requirements and boost efficiencies in handling agreements.

Typically, contract management includes:

• Sending initial request

• Reviewing clauses

• Addressing mistakes

• Requesting approvals

• Storing final documents

Healthcare contract creation and renewal can become complex and time-consuming. For example, someone from your staff will submit the initial request, someone else will review it and make corrections, some other person will approve it, and someone senior will sign it. All of this can create enough room for errors and delays.

When you standardize this process, for instance, using an automated contract management system, you can manage all these functions in a central platform and prevent mistakes and wastage of time.

3. Ensure high contract data security

Securing contract data should be one of your top priorities when it comes to contract management. Moreover, HIPAA, HITECH, and other federal data privacy regulations and guidelines mandate security compliance.

Losing your contract data to scammers or fraudsters can have various repercussions. For example;

• Misuse of information while your organization is held accountable

• Loss of trust in vendors and suppliers

• A bad reputation in the industry

• Compliance failure

• Penalties

• Negative impact on the bottom line

Using a contract management system with high-security features which can also link your contacts to relevant regulations can do great help.

An efficient contract management system allows you to link each agreement to the relevant security regulations. This will ensure compliance and create seamless management of contracts across your organization.

4. Organize documents and contracts

If you are using a contract management system but cannot access required documents promptly, you might end up wasting time. For example, your healthcare business might have hundreds of contracts with vendors, suppliers, and other medical businesses. As you know, if you lose some of your contract-related documents, you are at risk of facing compliance issues.

Therefore, it would be best to invest in a system that helps you keep those documents organized and easily accessible at all times. For instance, you can use a cloud-based contract management software with features allowing you to define and set contracts in categories, such as:

• Sanitation contracts

• IT contracts

• Custodial contracts

• Physician agreements

• Security contracts

• Patient agreements and medical records

• Partnerships with diagnostic centers

• Medical equipment and supplies vendors

• Office equipment and supplies vendors

• Transfer agreements

• Media contracts

• PR agreements

By doing this, you can address complex contract-related issues in one platform, easily find frequently used clauses and documents, save your time, and prevent associated worries of contract management.

5. Get support from healthcare-specialized contract management professionals

Over the past couple of decades, the healthcare sector has been changing a lot, primarily due to technological disruptions and new norms implemented by local, state, and federal governments. Many healthcare service providers had to adapt to these changes overnight.

Amid all that, it can become challenging to keep up with the amendments and fast-developing technologies disrupting the market. In such a time, taking support from external contract management services would be a great help. This would significantly help if you are running short on resources or have a lack of staff expertise.

By doing this, you can ensure your contracts are compliant and reduce the cost of contract management, as these service providers are often less costly than running an in-house department for handling arrangements.

Conclusion

Even if you have an excellent system for managing contracts, it is almost useless if you do not have a qualified team that can operate it efficiently. Hence, you may consider improving your healthcare contract management with the help of professionals. As a result, you may experience the following benefits: Increased precision , Smart integration with other systems , Better reporting , Greater visibility, Compliance assurance , Cost savings