Managing contracts is not one of the most exciting aspects of running a hospital or practice. However, the price paid for misplaced contracts, or defaults on contracted terms, can quickly get your attention. Healthcare adds another layer of complication because of compliance and privacy concerns. If you do not manage your healthcare contracts appropriately, your hospital or practice can suffer monetarily. You also risk harm to your reputation and future business.
When you stop to consider the sheer volume of contracts involved in the healthcare business, from vendors to payors to employees, it is easy to see the need for organization. Every new business relationship has the potential to expand the number of contracts that need to be tracked to an exponential degree. In this blog, we explore contract management best practices to help you get better control over your contract cycle.
Healthcare Contract Management Best Practices
On a basic level, personnel churn and multiple locations can create challenges in locating contracts, but just knowing where your contracts are is not enough. Who is making sure the terms of the contract are being met? How do you know when your contracts need to be renewed? What is the procedure when a new contract needs to be drafted? Or amended?
When you consider all these questions, dealing with contracts suddenly becomes more interesting (or maybe even a bit scary). Proper attention given to contract management is essential for the large organization and small practice alike. Solutions to contract management range from technology-based hospital contract management software systems to the good, old-fashioned desk calendar. Below we have shared some healthcare contract management best practices that can make the daunting task of managing healthcare contracts easier.
Assign a specific place for your healthcare contracts. For example, if you have multiple locations, confirm that your team has a secure central repository where you keep all paper contracts. If possible, scan paper contracts into an accessible database. Not only does it help make the documents easy to locate, but it also protects the documents should the worst arise, such as a flood or fire.
Do you find that there are contracts, or language inserted into contracts, that you use over and over again? Many find it useful to create templates for contracts that can be edited using standardized language.
Don’t Forget Payor Contracts
Keeping on top of payor contracts can be tricky business. It is not unusual for a health system or provider’s office to sign a contract that was amended over several years. Having possession of all original healthcare contracts is very important when checking reimbursed amounts and when renegotiation time arrives.
Get Compliance Involved
Healthcare has some unique concerns when it comes to contracts. Perhaps the most overlooked is the Business Associate Agreement (BAA). Essentially, this agreement ensures all vendor employees and contractors take the steps necessary to protect personal health information and are held responsible should a breach occur. Compliance can make sure that all the required contracts have been executed according to the scope of work.
Review Policies and Procedures
Confirm that policies and procedures include the relevant contracts associated with them. For example, the official policy for hiring a new employee or provider should include an employment contract and all associated documents such as a HIPAA agreement and W-2.
Streamline Processing and Approval
Frequently, there are many parties involved in a contract, and there can be multiple editing rounds before a final agreement is drafted. A clear policy that outlines how a contract moves through your organization makes the process more efficient and helps you waste less time. Also useful is a clear directive on who is responsible for signing off on agreements.
There are now many hospital contract management software systems available that organize vital obligation deadlines and termination dates. If you do not have access to this type of technology, we recommend a master contract calendar that includes not only important dates but also reminders enough days in advance to ensure nothing gets overlooked.
Investing the effort to get healthcare contracts under control is well worth it when you save time and your contract renegotiations run smoothly. Whether you are a hospital with several locations and can invest in hospital contract management software systems, or a practice with a handful of providers that uses a master calendar, following the above healthcare contract management best practices can significantly increase your business efficiency. It can also cut down on the hassle, and possible liability, of contract management.