These are the most talked about things in the healthcare industry. As a physician, you might have frequently heard about the top ways or solutions to improve medical billing services or RCM, etc. But have you ever thought about effective healthcare management?
Unfortunately, it is the most overlooked aspect of the healthcare industry. No doubt managing the revenue cycle efficiently has become the need of the hour. But it is also crucial for the physicians to pay special attention to keeping track of all types of contracts_they signed with insurance companies, third-party service providers, or the stakeholders involved in the healthcare process. Because all the parties have their own policies, standards parameters, and regulations, most of the time is different from the others. It’s pertinent to mention here that a healthcare contract is a legal document that is signed between two consenting parties i.e. between a physician, a managed care organization (MCO) like a provider-sponsored network, health maintenance organization, or the different insurance agencies. The most common healthcare contract is usually formed between payers & the healthcare facilities, which contains complete payment details, terms & conditions.
Apart from this, here are the following types of contracts that, healthcare providers signed:
All these contracts come with unique complications. Therefore, it can be a cumbersome task for healthcare providers to keep track of every contract. Moreover, in this fast-paced, competitive industry, lack of sufficient time has become the major reason_that contract management has become an overlooked aspect. Physicians have to spend a considerable amount of time providing remarkable medical care services to the patients_leaving little to no time for non-medical obligations. And a lack of focus on this business aspect can result in compliance issues and legal troubles.
Just think for a while, how can ignoring or having a little understanding of the vital clauses regarding negotiated rates, what benefits are covered, stop-loss provisions, incentives, service & accessibility issues and provisions for counting/allocating members, impact your business? According to a survey report, due to inefficient healthcare contract management, approximately 10% of all contracts are lost across industries. These statistics are worsening day by day. Therefore, this aspect of medical businesses needs more attention than ever before.
Are you facing challenges in keeping track of all of your contracts? No doubt, it’s a common problem that hospitals or healthcare facilities have to face. However, to overcome this issue, providers must have a complete understanding of the formation & components included in the healthcare contracts.
Initial requests: It is the first step of the contract management process. Which includes the arrangement of complete documents that support the purpose of the contract.
Authoring contracts: At this stage, both consenting parties put their terms into writing. Then they ‘solidify’ their clauses according to their contractual obligations and mutual understanding.
Contract negotiation: After drafting the contract, both parties collaborate with each other for a legally binding agreement. During this process, they negotiate each and every clause to ensure the satisfaction of the rights and obligations assigned to them. Successful contract negotiation reduces the chance of disputes, discrepancies, and results in mutual benefits.
Contract review and approval: So, after the contract is being put into writing, both parties review the contract again to identify and fix the loopholes. That later led to any type of mismanagement. After making sure that there is nothing against the interests of the parties, the contract is being officially signed.
Obligation management: It is time-consuming but the most important component of the successful healthcare contract management process. In which providers keep a close eye on the consenting parties to make sure that deliverables are being met by key stakeholders. And there is no violation of the clauses of the contract.
Revisions and amendments: A contract amendment allows the parties to make mutually agreed-upon changes including correction, clarification, or deletion to an existing contract. You should always keep in mind that the amendment in the contract, that you have already signed, leaves your original agreement substantially intact.
Auditing and reporting: Signing a contract doesn’t mean pushing it into the filing cabinet. After the implementation of the contract_regular audits and reporting are important in determining both organizations’ compliance with the terms of the agreement.
Renewal: It is the process in which the initial terms are being renewed when the contract expires. This process also requires the mutual agreement of both parties. Which makes sure that the arrangement continues and the contract remains applicable for the newly decided time period.
Follow a Systematic Procedure
Healthcare providers can achieve nothing without having a systematic action plan. The same is true when it comes to managing healthcare contracts. For better outcomes, first of all, physicians should establish a clearly defined process, as we have mentioned above. It will ensure the successful completion of each and every crucial task, required to make a contract effective. Following a systematic procedure also minimizes the chance of potential mistakes and time wastage. Creating and renewing a healthcare contract is undoubtedly a complicated and hectic task.
That includes drafting, collaboration, corrections, approval, amendments, tracking, and audits, creating plenty of room for delays and errors. However, by breaking down the entire process you can easily assign the duties to different individuals, depending on their expertise. Moreover, physicians also become able to clearly monitor the performance of the administrative staff. Which ensures a high level of accuracy and efficacy in the entire process of healthcare contract management.
Automate Contract Management System
Gone are the days, when medical practitioners were used to relying on manual methods to keep the records of the contacts on paper files. Such orthodox methods always leave a huge room for errors and results in quick add up in the administrative workload of the practitioners. It also increases the financial burden of healthcare physicians. According to the latest research conducted by the Black Book Market_ healthcare practitioners spent approximately $157 billion manually by managing the contract management manually. Moreover, it has also been estimated that almost 96% of medical facilities do not have an appropriate contract management system in place.
For example, a lack to stay up with the signed contracts with the payers can result in significant revenue loss. Because most of the time, insurance companies don’t pay according to the negotiated rates. Failure to catch such loopholes ultimately results in partial reimbursements. If this practice continues, physicians can face a critical financial crisis. However, thanks to advanced technology. Relying on the automated healthcare contract management systems helps the medical professional to drive desired results. If you are working for managing the contracts. Then you know the fact that the creation, approval, and renewal of the healthcare contracts can be easily interrupted when they get stuck on the table of concerned authorities.
These delays eventually result in missing the deadlines and sometimes, you may lose the trust of the other party. Sometimes it results in the cancellation of the contract. On the other hand, automated workflows prevent this inconvenience by keeping individuals aware of their obligations, contract dates, and termination dates. As the automated systems send auto-generated alerts in terms of emails etc, to prevent delays.
Acquire the Services of Experts
The complications in the healthcare contract management system. Physicians should only rely on the well-experienced staff for the successful execution of this process. The Healthcare industry has become more competitive than ever before. Moreover, the adaptation to the value-based care models has increased the responsibilities of the healthcare providers. As a result, they don’t get sufficient time to spend managing the non-core functions of their medical practice. Despite spending a significant amount of money and time on purchasing cutting-edge technology, hiring and training the in-house teams. Healthcare providers prefer to hire a third-party service provider to manage their entire contracts in an efficient manner. Outsourced medical billing companies, providing additional services of contract management, help physicians to create and maintain a database. This includes fee schedules of different payers or other stakeholders required to manage the healthcare contracts efficiently.
Using this database, a professional medical billing company can easily track the payments. Outsourced experts make sure that insurance companies are paying according to the rates negotiated in the contracts. As a result, healthcare providers can get complete reimbursements. They work diligently to ensure the compliance and optimization of the security. Outsourcing the non-medical obligation reduces the administrative and financial burden of the healthcare providers. Overworked by the to-do list of your healthcare organization? Then acquire the services of Physician Billing Company and keep your healthcare business afloat. We provide a complete suite of RCM solutions to put an end to your frustration regarding financial challenges. Contact us today to make the best deal for your practice.