As healthcare contracts become more complex to create, negotiate, execute, and manage throughout the contract lifecycle, the tools to manage them need to keep pace.
The ongoing COVID-19 pandemic and the recent 25th anniversary of the Health Insurance Portability and Accountability Act (HIPAA) have both underscored the critical importance for healthcare organizations to speed up their digital transformation initiatives. Over the last 25 years, the need for solutions that help modernize processes, improve operational efficiency, and stay compliant with changing regulations while being agile enough to evolve has accelerated. Digital transformation is not going away, and contract management can play a foundational role in helping healthcare organizations successfully achieve it.
In healthcare, contracts are integral to employment, care transfer, technology licensing, experimental treatments, confidentiality, and telehealth, among others, and the average healthcare organization might have tens of thousands of contracts covering multiple departments and facilities, as well as payers, providers, and other third parties. Prior to the COVID-19 pandemic, 96% of American health systems reported either not having a contract management system and entirely using manual processes or having an outdated and inadequate system to address value-based care. These manual approaches to contract management are not only highly inefficient and costly, but they also put those same organizations at risk.
Replacing manual, document-centric processes with dynamic, data-driven, and secure cloud-based solutions to modernize contract lifecycle management (CLM) practices gives healthcare organizations a number of benefits including:
- Reduced Costs and Complexity: The process of managing various physician and service agreements, along with regulatory compliance standards and other state and federal regulations is time-consuming, complex, and costly. Healthcare CLM software replaces manual processes and paper documents with a digital and automated solution that improves efficiency over time.
- Minimized Risk: The automation and execution of bulk actions like alerts and workflows help eliminate missed renewals and other important dates and obligations. Healthcare organizations can easily create, track, and reconcile fee schedules and other administrative functions. Having a reliable, centralized, and dynamic solution to manage all these functions and alerts reduces the risks due to human error.
- Better Collaboration: Even simple healthcare contracts can involve multiple parties and multiple versions, with limited visibility into the review process. CLM software allows organizations to collaborate and negotiate contracts in real-time, concurrently reviewing, approving, marking up documents, and ultimately executing them electronically with e-signatures. Real-time collaboration capabilities also provide a complete view of engagements over time, as well as an audit trail.
- The Ability to Ensure Compliance: HIPAA has been in effect for over two decades, and regulatory and security requirements like HITECH, JCAHO, Stark Law, and Medicare billing, for example, are constantly evolving. CLM software helps healthcare organizations manage all compliance requirements, from the initial drafting of agreements through the execution and post-award phases of contracts. Real-time reporting capabilities also allow organizations to pull compliance data quickly.
- More Efficient and Optimized Processes: By automating and streamlining contracting processes with CLM software, healthcare organizations can conduct business faster. They now have insights into the bottlenecks holding up contract negotiations and can improve the workflow process for greater efficiency.
Flexibility for an Industry in Flux
As healthcare contracts become more complex to create, negotiate, execute, and manage throughout the contract lifecycle, the tools to manage them need to keep pace. CLM software provides a way for healthcare organizations to accelerate digital transformation initiatives today, as well as a centralized and digital foundation for contract process initiatives in the future.