Healthcare, undoubtedly, is one of the most dynamic industries in the world. Between ever-evolving regulations, surging patient demands, and a world still altered by the pandemic, it's no wonder why legal teams, and the organizations they support, can feel like they're constantly playing catch up.
But if there's one thing healthcare organizations can do to stay ahead of the curve, it's implementing a solid contract lifecycle management strategy.
While some organizations see contract management as a tiresome chore, it can actually be a competitive advantage: with an optimized process, and a strategy that is well implemented, you can not only mitigate risks and improve compliance, but also save time, cut costs, and drive growth.
In this blog post, we'll dive into the contract management challenges that healthcare organizations face today, the staggering cost of mismanagement, and how implementing CLM software can give your organization a leg up:
Contract Challenges in the Healthcare Industry
Managing contracts in the healthcare industry is a lot like juggling while walking on a tightrope — with so many competing priorities and critical details to keep track of, it can feel impossible to find the right balance.
Let's look at some of the contract management challenges that healthcare organizations face:
- Overwhelming contract volume. From vendor contracts to employment agreements to patient forms and payor contracts, healthcare organizations have to manage a grueling number of contracts. To make matters worse, these contracts need to be reviewed, approved, and managed by multiple stakeholders, causing immense strain on resources, time, and efficiency. In addition, these contracts have to be tracked for renewal and other compliance issues.
- Complex regulatory compliance. Regulations like HIPAA, Stark Law, and the Anti-Kickback Statute loom large over every healthcare organization, adding complexity to an already demanding industry. Even the most seasoned healthcare professionals can feel overwhelmed by the intricate web of legal nuances and constantly evolving regulations.
- Lingering disruption from COVID-19. In the wake of the COVID-19 pandemic, healthcare providers across the world were jolted by supply chain disruptions, the sudden shift to remote work, and changing patient needs. Ever since, healthcare providers must have the agility to adjust their contracts quickly to ensure patients get the necessary care, while also partnering with third-party vendors and suppliers to meet their contractual obligations.
- Sensitive patient data. Healthcare organizations owe it to their patients to ensure that their confidential information is adequately protected. The severity and complexity of healthcare data breaches continue to escalate, making it imperative for healthcare companies to implement best data security practices. Any breach of patient privacy or security could have dire consequences, including significant fines, loss of trust amongst patients, and long-term reputational damage.
The Cost of Mismanaging Contracts in Healthcare
In healthcare, even the smallest mistake can have devastating consequences — and contract mismanagement is no exception.
From hefty fines to legal battles to reputational damage, here's what's at stake when contract management goes awry:
- Financial Risks: Missed opportunities for negotiating better pricing or terms with vendors and suppliers can skyrocket costs and cripple your organization's bottom line. Litigation, contract disputes, and non-compliance with regulatory requirements can also come with massive fines and legal fees, just like it did for Geisinger Community Health Service (GCHS), which paid more than $18.5 million for violating Medicare billing rules for hospice and home health services. Missed deadlines can literally cost the organization money in terms of lower reimbursement rates and rejected claims.
- Operational Chaos: If staff and patients are confused about contract terms and obligations, it can cause inefficiencies and delays in vendor management processes. Inaccurate or outdated contract information can result in missed deadlines, incorrect billing, and non-compliance with regulatory requirements. This may lead to fines and legal disputes that could be detrimental to the organization, such as with LabCorp, which paid $2.1 million to resolve False Claims Act violation allegations after alleged claims of double- and/or triple-charging the United States Department of Defense (DOD) for genetic tests.
- Reputational Damage: A breach of patient privacy, contractual non-compliance, or a failure to deliver agreed-upon services can all lead to negative publicity and erode patient trust. In an industry where trust is critical, even a single misstep in contract management can have long-lasting and far-reaching consequences that could damage the company's brand and reputation irreparably, and even get shamed by the Office for Civil Rights (OCR) HIPAA Breach Reporting Tool (widely known as the OCR “Wall of Shame”).
But the costs of contract mismanagement go beyond financial and reputational damage: it also means missing valuable opportunities for innovation and growth, and putting patient safety at risk due to errors and delays in care. The bottom line? Healthcare organizations can't afford to ignore the consequences of contract mismanagement — the stakes are too high, and the impact on patient outcomes is too severe.
Benefits of Using Contract Lifecycle Management (CLM) Software in Healthcare
Enhanced Collaboration and Efficiency
Imagine being able to create contracts in just a few minutes, rather than spending hours poring over every detail. With advanced CLM software, you can easily create templates for commonly used contracts, complete with fields for relevant data such as pricing, terms, and conditions. Not only does this reduce the likelihood of errors, but it also helps you stay on top of important deadlines and make sure all of the key stakeholders in your organization are aware of and/or can provide input into contract drafting and negotiation.
CLM software also automates approval workflows, ensuring that contracts are reviewed by the right people at the right time. And if action isn't taken within a certain timeframe, automated reminders can be sent out, minimizing the risk of delays or errors in the approval process.
And when it comes to negotiations, CLM software truly shines. Instead of a never-ending back-and-forth of redline edits, all parties can view and edit the same document in real-time. So whether you're negotiating with a medical device supplier or finalizing a physician employment agreement, CLM software can help streamline the process and ensure you come to an agreement quickly and efficiently.
Improved Compliance with HIPAA and Other Regulatory Requirements
Compliance isn't just a matter of ticking boxes and signing contracts; it's about ensuring that patients' personal data is protected and that legal regulations are followed to the letter. This is why AI-powered tracking of key contract clauses and upcoming deadlines is such a coveted feature in CLM software.
For example, let's say a healthcare organization signs a contract with a vendor to provide patient billing services. The CLM software can automatically scan the contract to identify any clauses related to data privacy and security, and flag any language that may conflict with HIPAA regulations. If the vendor fails to meet these requirements, the software can trigger alerts to the appropriate personnel, ensuring that corrective action is taken promptly.
Additionally, the software can track the expiration dates of contracts and automatically send reminders to renew or renegotiate terms before they expire. This feature helps ensure that healthcare organizations remain compliant and avoid any unintended lapses in coverage.
Greater Visibility & Accountability
For many organizations, contract management involves a time-consuming process of sifting through mountains of paperwork and spreadsheets. But advanced CLM software simplifies this process by providing a centralized, searchable repository, customizable dashboards, and real-time information on contract statuses and upcoming milestones.
By centralizing all contracts in one place, you can quickly and easily find the information you need, ensuring you never miss an important deadline or contractual obligation. Customizable dashboards also provide a bird's eye view on contract status, upcoming milestones, and other key metrics you want to track, empowering you to be proactive about your contractual obligations and overall contract performance.
Plus, in just a few clicks, organizations can generate comprehensive reports on contract status, renewal rates, and other key metrics, providing valuable insights that can be used to optimize workflows and improve outcomes. Healthcare providers and organizations can use these insights to identify areas for improvement in their contract management processes, such as negotiating better terms with vendors or reducing time spent on administrative tasks.
Case Study: Akumin Saves 8+ Hours Per Week with IntelAgree
If you're still manually managing contracts or using outdated software, it's time to ask yourself: are you giving your healthcare organization the best chance to succeed?
With the power of CLM software like IntelAgree, you can improve compliance, minimize costs and risks, and shift from a reactive to a proactive approach.
Take this Akumin case study, for example: as a leading provider of outpatient radiology and oncology services, Akumin had a complex contracting process. They had countless contracts — not to mention various types of contracts — scattered across multiple databases until they found IntelAgree. But with IntelAgree's searchable repository, custom reporting, and eSignature platform, Akumin began saving over 8 hours per week and centralized 11,052 contracts for easier monitoring.
And just like Akumin, we're ready to help you simplify your workload and focus on what really matters: improving patient outcomes. Schedule a demo today and discover how our powerful CLM software can give your organization a leg up.