Why Healthcare Contracts Are Crucial
Managing contracts in a healthcare setting can be challenging; you’re involved in numerous business relationships, have contracts with patients, and enter into vendor agreements. All of these agreements require healthcare contracts that outline the duties and obligations each party has in the relationship. Managing these contracts while maintaining patient privacy and limiting exposure to risk can best be managed with the help of technology.
Effective contract management technology changes the equation. It gives you the tools you need to track, store, and secure your healthcare contracts. Healthcare contracts are critical to your success, so you want to ensure you’re handling them correctly.
Why are healthcare contracts so important?
Healthcare providers are involved in all kinds of business and medical relationships. Each of these relationships requires legal documentation to set forth:
- Each party’s duties under the contract
- Critical fulfillment or other obligation dates
- Renewal dates and requirements
- Legal liability disclaimers and other standard legal clauses
- The goods or services that are the subject of the contract
These healthcare agreements ensure each party knows its legal requirements. This makes them incredibly important to protect your rights in the contractual relationship.
Authorization and oversight
Healthcare contracts legally obligate you to the terms. As a result, you need control over what you agree to and when. Contract authorization and oversight processes are critical in your healthcare contracts. The sheer number of legal agreements you enter can make it difficult to manage and track the agreements you authorize. It can also lead to unauthorized agreements that ultimately cost you money.
Your company should designate who has the authority to enter into contracts. This authorization can be total for the entire business or limited in scope to certain situations. Digital contracting technology makes it easy to designate specific individuals and stakeholders to bind the company to healthcare contracts and limit others.
Contracting technology also makes oversight simple and accurate. You need to know what changes to agreements occur and what version of a contract is used. You need to know who was involved in the negotiations and who authorized a legal agreement. All of this is essential to maintaining control over your healthcare contracts.
The many types of contracts used by healthcare facilities
Another reason healthcare contracts are so important is the variety of legal agreements they handle. You likely enter legal agreements with many different parties with many different purposes. These relationships require different forms, legal language, and compliance with varying healthcare laws.
Tracking all of this with antiquated contract management systems can lead to missed dates, failed obligations, and a significant risk of legal liability. Managing these different types of healthcare contracts requires a system that can handle them all and the unique aspects of each.
Healthcare vendor contracts
Whether you’re a solo practitioner or a major hospital network, you constantly work with medical vendors. You need supplies ranging from typical office materials to complex medical equipment. Your relationships with these vendors are essential to the success of your services.
Some companies can have hundreds or even thousands of different vendors they work with. This makes contract management especially difficult. Thankfully, advanced technology makes it easy to templatize standard agreements for use across multiple vendors. Each of these templates can be modified to fit the specific needs of that vendor relationship.
Modern vendor contracts let you:
- Automate and standardize procurement contract drafting
- Control approvals, redlines, milestones, and deliverables
- Mitigate legal risk
- Control costs
- Ensure services and goods are rendered and paid for on time with actionable contract data
Whether you handle these contracts yourself or have a dedicated procurement department, you need access to tools that make it easy to manage your vendor agreements.
Staff and employment agreements
Healthcare providers of every size need contracts with their staff, employees, and independent contractors. These individuals are under your control and should be subject to your standards. Employment agreements should protect the employee and the employer, but accurate contract management is a must when dealing with these contracts.
Employment agreements may include, but are not limited to:
- Rules and regulations of employment
- Employment contracts
- At-will employment agreements
- Independent contractor agreements
- Temporary or probationary employment agreements
Healthcare contracts with patients
Patient contracts are arguably some of the most important you use in your business. These contracts establish a relationship between you and your patients for many aspects, such as:
- The type of care you will provide the patient
- An outline of potential risks and benefits of a procedure
- An agreement to be billed and pay for medical services
- Insurance agreements and information
- Medical consents and waivers
While there are countless other types of agreements out there, these show why proper management is so important. These legal agreements control so much of your relationship with patients. They also protect you from legal liability and the risk of lawsuits. You need to properly store and track these contracts to ensure your rights are protected.
Patient transfer contracts
A patient transfer contract documents when a patient must move from one physician to another. This also covers when the patient must be transferred from one medical facility to another.
The agreement will typically outline details, such as the reason for transfer, necessary care, duration of the contract, and other key details like insurance.
Practice-based research agreements
If you enter into a research project with another corporate entity, the details of that agreement must be in writing. Healthcare providers should consult in-house counsel or independent attorneys before entering such an agreement. They must then store and manage them properly.
Practice-based research agreements can outline research protocols, oversight, human subject limitations, and much more. While practice-based research can be lucrative and profitable, it can also be a major liability if mishandled.
Equipment lease healthcare contracts
Healthcare equipment is incredibly expensive. Many healthcare facilities choose to lease their equipment rather than purchase it outright. The equipment provider typically provides a lease in these situations, but many are negotiated from a standard agreement. You want to ensure that the entirety of these negotiations and the final agreement are properly stored in the contract management system.
Many equipment lease disputes arise because one or both parties fail to negotiate or manage their agreement accurately. Key fulfillment dates, renewal dates, or payment requirements are missed simply because of difficult-to-use contract management systems. But this doesn’t have to be the case.
Outsourcing and managed services agreements
Many aspects of a healthcare business are outsourced to third-party administrators. This often includes things like coding, billing, and transcription. A managed services contract outlines the business relationship’s details and establishes each party’s requirements.
It should also include details like:
- Fee structure for third-party services
- How the contract may be terminated
- Scope of work to be performed
Healthcare contracts and compliance with data privacy laws
Your healthcare agreements are subject to a litany of data privacy laws. Both federal and state laws in your jurisdiction control what you are allowed to do with patient information and data. This typically includes your agreements with patients and patient data contained in contracts with other providers.
For example, the Health Insurance Portability and Accountability Act (HIPAA) sets many standards for data protection and sensitive patient information. Healthcare providers that handle this information must meet the law’s strict requirements or risk high fines and other penalties. Compliance with these standards can be difficult if you use outdated systems to manage your healthcare contracts.
Other laws generally apply to data privacy and cover far more than patient data. These laws are designed to protect consumers, businesses, and individuals from the disclosure of their personal data. Additionally, they often protect how data is used, such as to prevent its sale to third parties without prior consent.
The importance of contract management security
As part of your compliance program, and to protect your privacy, you need a contract management system with a high level of security. Contracts are business-critical documents that require the utmost protection.
A comprehensive contract management system offers security protections like:
- Regular penetration testing to ensure system fidelity
- Operational security and policies to protect sensitive data
- Encryption in transit and at rest
- Cloud-based deployment to create robustness against outages
The right contract management security system is necessary to protect your and your patients’ valuable data. This includes healthcare contracts that contain sensitive business or proprietary information.
Protect your important healthcare contracts
Healthcare contracts are an essential part of your success as a healthcare provider. You must be able to draft, negotiate, and store these documents accurately and securely. You need a system that makes it easy to track renewal dates, key fulfillment obligations, and many other vital aspects of your legal contracts.
The right contract management software helps you across the board with any agreement you need. You can combine high-level security and compliance assistance with robust record management.