Today, healthcare payers are constantly balancing their need to contain costs and connect the right benefits and services to cover their members’ needs and provide access to quality care. This balancing act is made more complicated by the need to maintain compliance with ever-evolving regulations—work that can put a strain on resources and productivity that could otherwise be directed to improving member outcomes.
It would be fair to say the only constant in healthcare regulations is change itself. In the United States especially, policy changes at the federal, state, and local level create a highly complex and matrixed compliance landscape.
A recent report from Deloitte identifies three areas in which, in recent years, significant regulatory changes that affect payer contracting have been trending:
- drug pricing, driven by Congressional legislation
- advanced alternative payment models (AAPMs), incentivized by payments to clinicians who adopt them
- increasing hospital price transparency, driven by social media, and consequent legislation governing cost increases
Ultimately, these and other regulatory trends put a heavy burden on already complex provider and payer ecosystems — ecosystems that are built on contracts.
Contracts define the terms of payers’ business relationships, and when regulations change, contracts must change with them so that all parties involved are on the same page for compliance.
Considering the vast number of contracts healthcare payers must deal with, ensuring compliance without the use of a powerful contract lifecycle management (CLM) solution requires an enormous expenditure of time and effort. Manually searching through contracts to determine how they need to be amended to stay compliant with every new regulatory change consumes weeks or even months—adversely affecting your bottom line, diverting critical resources from member services, introducing error and increased risk, and hampering any opportunity to get ahead of the next regulatory revision cycle.
Challenges of contract management at a foundational level can reverberate throughout a healthcare organization negatively impacting its core mission.
The Rise of Contract Intelligence
To address these challenges, leading healthcare payers, including BlueCross BlueShield, Centene, and Humana, are turning to advanced CLM technology to digitize their contracts, structure and connect key data across their systems in order to move faster, realize value, measure performance, manage obligations and risk, and drive compliance. These capabilities push beyond contract management and into what we at Icertis call contract intelligence.
Contract intelligence has proven to be a must-have for these and other payers due to the ubiquitous and foundational nature of contracts. Contracts define how a partner ecosystem and other commercial relationships operate; by applying the latest digital technologies—including AI and machine learning—healthcare payers improve not only their contract operations but the enterprise operations these strategic assets power.
AI is especially critical for healthcare payers. By employing AI, payers can quickly discover exactly which contracts are impacted by regulatory changes, which contracts deviate from standard terms, rate schedules, and conditions, and provide a transparent, 360-degree view into all impacted documents to streamline required changes and negotiations. This level of visibility across an enterprise saves untold amounts of manual labor, cost, and mitigation of reputational and financial risk for noncompliance.
Once all contracts requiring attention are identified, mass amendments can be executed with one click, with smart rules routing the new amendments to the right contract managers in the organization. In addition, in the case of an amendment being rejected by a counterparty, smart rules can initiate corrective actions (including termination) to ensure an organization stays in line with the regulation.
In short, there is simply no longer any place for manual contract management in a modern healthcare organization. The time is now to modernize and digitize this cumbersome, fragmented process. Staying abreast of diverse and constantly changing healthcare regulations, affecting an extensive contract repository amassed from a complex array of provider networks and various plans, poses never-ending challenges. An advanced, enterprise-wide contract intelligence platform can quickly overcome these long-intractable problems, allowing actors in the healthcare payer sector to deal with regulatory changes quickly and easily by structuring and connecting contract information that can drive speed, performance, collaboration, and compliance into all business interactions and relationships— keeping their companies out in front, now and into the future.
To learn more, please download our Industry Overview: Contract Intelligence for Healthcare | Payers, or visit our Payers page.
