How can today’s hospitals better maintain compliance while increasing productivity? It all starts with digitally transforming the contract management process. Of 1,275 users surveyed who were evaluating contract management solutions for hospitals, 96% reported having no contract management software in place. As a result, these hospitals were relying on manual or outdated CLM processes, leading to approximately $157 billion in annual revenue leakage in the form of contractual reimbursements and liabilities.
Without modernized CLM tools and processes, hospitals continue to see increased liability and operating costs. Are you one of those organizations? If so, discover the importance of contract management software for hospitals.
Store Contracts Securely
Hospitals need to ensure HIPAA compliance in every aspect of their operations, and this starts with contracts. Because of the many different departments and divisions within a hospital, it can be difficult to store information centrally and securely.
Implementing contract management software is one method for ensuring that a hospital maintains regulatory compliance and avoids possible violations. For example, when a regional hospital system based in the Midwest allegedly violated the Stark Law and Anti-Kickback Statute, it paid an $84.5M settlement—a steep price to pay for noncompliance.
By using a contract management solution, hospitals can track referrals and necessary clauses to ensure they remain in compliance. Ultimately, this provides visibility across divisions of the organization. If you don’t have a system in place, these violations can happen without fair warning, costing you immensely in the end.
Hospitals already spend enough on their operating budgets, so avoid the costly fees and reputational damage by ensuring compliance throughout all of your processes.
Organize Data Easily to Ensure Compliance
Given their wide array of contracts, hospitals need an efficient way of organizing and finding contracts quickly. Sifting through each individual contract is not only time consuming, but it can lead to human error. A searchable contract repository allows your team to organize your contracts in a centralized location and search across agreements. With the ability to search contract data, you can identify when you need to issue new amendments to your contracts and clauses. This is especially important due to ever-changing healthcare regulations and hospital standards.
Furthermore, the procurement team at hospitals has to deal with all sorts of contracts, ranging from employment to supplies and everything in between. It becomes difficult to gain contract visibility when you have no way of looking at your agreements holistically. Contract management software allows your team to create custom reports, organizing by contract type, term length, and other factors. This enables you to ensure contractual duties are fulfilled by the right stakeholders. For example, if a vendor contract is executed, you can ensure that the accounts payable team is properly managing invoices and bills. This enhanced communication and organization provides visibility and transparency into all of your agreements, enabling faster decisions.
Every year, hospitals set aside millions of dollars for potential medical liability. Often, poor documentation and document management are leading causes of medical lawsuits. Overall, annual medical liability costs are estimated to be $55.6 billion, accounting for 2.5% of total healthcare spend. That’s a lot of money wasted on errors. If you’re using an outdated or manual CLM process, it becomes impossible to determine liability red flags, such as an expired machine lease or potential liability clauses in medical contracts. CLM platforms with AI capabilities can identify key pieces of your agreements and flag substandard terms and clauses to ensure compliance every time.
A hospital’s procurement team has a heavy hand in selecting technology vendors and suppliers. But for them to accelerate the buying cycle, operational efficiency is key. Procurement can leverage automation to ensure they can manage vendor agreements in a safe and secure manner while also being efficient.
Approval workflows and e-signatures within contract management software enable your team to speed up this process in a secure way. By distributing contracts through automated approval workflows, the procurement process becomes faster and safer. Additionally, e-signatures shorten and simplify the process since you no longer need to print out the documents and sign them by hand.
Furthermore, because hospitals tend to be quite large, there is a higher level of scrutiny over their operating budget, performance, and compliance. The largest 25 hospitals in the country all have estimated annual operating budgets of over $75 million. Because of these large budgets, hospitals need a way to increase productivity to streamline the CLM process. Increasing productivity enables you to lower your operating costs by creating favorable terms within your contracts. Additionally, flagging expiration dates and renewals are crucial to ensuring you can renew those favorable terms.
Contract Management Software for Hospitals
Through storing contracts securely, organizing data easily and compliantly, and increasing productivity, the importance of contract management software for hospitals is quite clear. This sector is quickly learning the necessity of having a proper CLM solution in place, and as the contract management software industry grows, so too can your hospital.
Want to see how IntelAgree can help streamline your contract management process? Schedule a demo now to check it out!