How to Avoid Poor Healthcare Contract Compliance With Contract Intelligence

May 4, 2022 Jennifer Conner

While healthcare providers are working hard to improve the overall patient experience, it is important to keep top of mind that contracts with payers, partners, and suppliers underlie every aspect of the care and connection they provide.

This includes healthcare contract compliance. Since contracts set the rules of business, healthcare organizations must ensure those rules align with regulatory expectations. That's a difficult task to accomplish at scale if contracts are managed manually or across disparate systems—especially when regulations are subject to change.

That's why more and more healthcare organizations are investing in software solutions that help them digitize healthcare contract management and contract management workflows to achieve automation and organization-wide control throughout the contracting process.

Poor Healthcare Contract Management Hinders Compliance

No industry, arguably, has more regulatory oversight than healthcare. Government agencies aren't just watchdogs over healthcare clinical and commercial practices; they are also critical payer partners via Medicaid, Medicare, and other government healthcare plans—and use their platform to further influence provider operations.

This situation creates an environment of regulatory churn in the healthcare industry. Yet contracts andcontract management processes often aren't built for change and flexibility. When regulatory updates carry implications for how a provider does business and provides care, manual or fragmented contract management makes identifying impacted agreements, negotiating updates, and operationalizing the new language extremely labor-intensive, time-consuming, and, potentially, incomplete.

Likewise, by relying on arduous, manual contract management, organizations may be exposing themselves to significant unnecessary risk.

Contracts define who an organization is doing business with, and on what terms. Without proper insight into what's included in their contracts, as well as proactive management and oversight, data gathering to prove compliance in the case of an audit can be challenging, for example, and healthcare organizations open themselves to a variety of risks as health providers merge and consolidate to stay competitive.

Take, for example, the Stark Law violation one Alabama-based health system was charged with in 2014.

The Physician Self-Referral Law (commonly known as the Stark Law) forbids hospitals and clinics from billing Medicare for certain services referred by physicians who have a financial relationship with the hospital or clinic, ensuring that a physician's clinical judgment is not compromised by financial incentives.

Due to referral terms outlined in contracts originally executed in the 1990s and carried over through mergers, the Alabama group wasfined $24.5 million by the Department of Justice after payments outlined in these 90s-era contracts were deemed illegal kickbacks under the Stark Law.

This is just one example underscoring how noncompliance can be baked directly into the contracts defining healthcare operations.

How Contract Intelligence Helps

All of these challenges are driving healthcare facilities to explore better approaches to best practice, healthcare compliance and contract management.

Just as digital transformation efforts are changing how providers interact with patients, they are also redefining what's possible with healthcare contracts.

Contract Intelligence is a new category of software that leverages AI and other advanced software to digitize the contract management process, structure contract data, then connect that data to systems that contracts touch. With Contract Intelligence, our Contract Management Platform, providers can enjoy more intelligent contract creation, more intelligent contract automation, and more intelligent contract management insights—all with less overhead.

The benefits are particularly striking from a compliance standpoint.

When contracts are centralized and digitized, finding clauses impacted by new regulations is greatly accelerated. Once clauses requiring updates are found, automated workflows enable teams to execute mass amendments against those contracts and send them to counterparties for approval, keeping the organization agile no matter what happens in the regulatory environment.

Contract Intelligence also ensures always-on contract compliance across the entire contracting ecosystem. Smart rules flag noncompliant clauses before they can be executed while empowering contract managers to manage their agreements using standard language. In M&A scenarios, such as the Stark Law case mentioned above, AI trained on provider contract language can quickly analyze massive bodies of contracts to surface language that may violate organizational policy and should be reviewed.

Conclusion

Organizations that stay ahead of technological change will be the organizations that have the data and agility they need to understand and respond to new opportunities and risks quickly. Contract compliance and a robust contract management system are critical components of this equation. For a healthcare organization set on providing the best patient care possible it's vitally important to have a contract management software solution in place.

By digitally transforming contracts, providers will benefit from better visibility into—and control of—contract data and information, wherever it resides, preparing them for whatever the future of healthcare brings.

To learn more about healthcare contract compliance with Icertis Contract Intelligence for Healthcare Industry Providers, and how it can benefit your organization,download our industry eBook here.