Health insurance companies and other healthcare payors like PPOs and HMOs face serious challenges to containing costs for their clients while staying in compliance with government regulations.
Better contract management can help payors face these challenges in many important ways, including by improving the process of provider contracting, in which insurance companies enter into contracts to large group of physician groups and hospitals that operate under the payor’s network.
Anyone with health insurance has heard the phrases “in-network” and “out-of-network” providers. But how are those networks built? At their foundation, with contracts.
Challenges In Provider Contracting
Every year, health insurance companies, preferred provider organizations and heath management organizations negotiate and execute contracts with hospitals and physician groups that operate under the payors’ networks. These contracts dictate how much the insurance companies will pay the providers for various procedures, consultations, and visits.
In order to properly oversee provider contracts, insurance companies must ensure all the medical professionals they are contracting with are properly credentialed; maintain detailed price sheets to standardize how much they are paying for services; and keep historical records of each account. And this is just scratching the surface.
With a manual contracting system, these processes are siloed and do not interact with one another. This means contracts may need to get sent back and forth between departments several times before they are ready to be executed. With such a manual system, it’s not uncommon for multiple versions of a contract to be put into circulation, causing confusion, or heavy financial liability, later on. Important steps could also be missed with no system to track where in the negotiation process a contract is, and important data contained within contract may not be properly communicated to other systems.
For example, if the complex price schedule negotiated with a physician group in a contract does not reach a company’s pricing system, billing errors can occur. This is not an uncommon occurrence. Stephen Parente, a professor of health finance at the University of Minnesota who has studied the subject extensively, told HuffPost that his unpublished research suggests 30 percent to 40 percent of all medical bills in the United States (excepting pharmacy bills) contain errors.
Streamlining the Process with Enterprise Contract Management
An enterprise contract management system removes these inefficiencies by bringing all contracts into a central repository where they can serve as the single source of truth during the provider contracting process. The Icertis Contract Management (ICM) platform can integrate with systems across an enterprise so vital contract information reaches all the right parties.
Systems that ICM can integrate into include:
- Credentialing: ICM can be configured to automatically confirms that a provider coming under contract has the credentials required by local law.
- Provider portal: Many payors have portals where providers can self-service their accounts. With ICM, these insurance companies know providers always see the right contract.
- CRM integration: With Icertis Experiences for Salesforce and Microsoft Dynamics, teams can author and execute contracts with providers from the CRM they are familiar with.
- Pricing Systems: Integration with pricing systems ensures prices negotiated in contracts are properly communicated to both sides, reducing billing errors.
In addition to these efficiencies, payors can enjoy deep visibility into contracts. For example, it could search across thousands of contracts to explore price discrepancies based on location, provider, or contract-type. This helps companies identify areas where systems could be improved.
To find out more about how enterprise contract management can create value for your company, download this whitepaper featuring Gartner Research.