Healthcare Contract Compliance: 9 Ways Contract Management Software Helps Keep Providers Compliant

What is healthcare contract compliance?

Healthcare contract compliance is the systematic process of ensuring that all parties involved in healthcare agreements adhere to the terms, conditions, and regulatory requirements specified in their contracts. This critical aspect of healthcare management encompasses a wide range of activities designed to protect patients, mitigate risks, maintain legal and ethical standards, and optimize operational efficiency within the healthcare industry.

Healthcare compliance fosters an environment where all members of an organization work to prevent, identify, and address activities that might result in fraud, waste, or abuse.  

Rely on these governmental sources:  

• Health Insurance Portability and Accountability Act (HIPAA): mandates protection of patient data and privacy.
• HITECH Act: expands HIPAA requirements for data security.
• Stark Law: prohibits physician self-referral for certain health services.
• False Claims Act: designed to combat fraudulent billing practices.
• Anti-Kickback Statute: prohibits offering, paying, soliciting, or receiving anything of value to induce referrals. 

Healthcare organizations’ compliance vulnerabilities

In the Montefiore case above, the penalties climbed because HHS found: 

• Inadequate risk assessment - Montefiore failed to conduct comprehensive analyses to identify potential risks and vulnerabilities to patients’ protected health information.

• Insufficient system monitoring - proper monitoring and safeguarding of health information systems' activity was insufficient.

• Absence of robust auditing procedures - HHS found a failure to implement policies and procedures for recording and examining activity in information systems containing or using PHI.

In the Heritage Valley case, OCR found the health system had insufficient protections against cyber criminals. 

Kaiser Permanente claims that the breach was unintentional. Still, tracking technologies are typically intended to render marketing data for the healthcare organization. However the tracking technology appeared in the first place, Kaiser has now removed it from their websites and mobile applications. It has implemented additional measures to prevent similar occurrences. 

After Kaiser’s admission of guilt, the Office for Civil Rights (OCR) updated HIPAA compliance guidelines to ensure tracking technologies align with HIPAA regulations.

To further enforce compliance, the OCR and the Federal Trade Commission (FTC) sent 130 warning letters to various hospitals and telehealth providers. These letters served as a stern reminder to healthcare organizations about their responsibilities under both HIPAA and the FTC Act concerning the use of tracking technologies.

Montefiore, Heritage Valley, and Kaiser all breached several of the healthcare laws listed above. Of these five, HIPAA violations arise most often.

• Last year, 725 HIPAA data breaches were reported to the Office for Civil Rights (OCR), affecting more than 133 million records. Many healthcare organizations (including Kaiser in the example above) turn themselves in.  
• Common HIPAA violations include unauthorized use and disclosure of protected health information (PHI), insufficient access controls, and incomplete employee training on data security protocols.

Similarly, Stark Law violations have amounted to hundreds of millions over the past few years. 

• Common issues involved in Stark Law violations include improper financial relationships, lack of written agreements, compensation issues, improper leasing arrangements, non-compliance with exceptions, improper joint ventures, gift-giving to referring physicians, ignorance of the law, and failure to self-disclose.

The same year saw False Claims Act settlements and judgments exceed $2.2 billion. 

• Examples of FCA violations include billing for services not provided, submitting claims for medically unnecessary procedures, and upcoding services. 

Behind these violations are human error and malfeasance. A report from specialist insurance agency Beazley found that 41% of all healthcare data breaches stemmed from unintended disclosure. Another 19% of data breaches happen via hacking and malware. Overall, 74% of all breaches include the human element, with people being involved either via error, privilege misuse, or use of stolen credentials.

9 ways contract management software helps providers maintain healthcare contract compliance

By automating key processes and providing robust tracking capabilities, contract management software systems significantly reduce the risk of non-compliance and associated penalties. From ensuring adherence to HIPAA regulations to managing intricate payer agreements, they support revenue cycle leaders’ efforts to stay on the right side of the law. 

These features of contract management software reinforce your compliance efforts: 

1. Centralized contracts

A contract management system’s first task is to centralize all contracts in a repository. Secure storage of all contracts enhances compliance because it:

• Reduces risk of data breaches: centralized storage involves robust security measures, reducing the risk of unauthorized access or data leaks.
• Improves version control: which eliminates the problem of multiple, potentially conflicting versions of contracts scattered across different departments or systems.
• Facilitates audits: auditors can easily access all necessary documents from one source, streamlining the compliance review process.
• Eases timely responses: for fast responses to regulatory bodies' and payers’ requests.
• Improves clarity: easy access allows staff to quickly review and ensure adherence to contract terms, reducing the risk of non-compliance.
• Improves decision-making: rapid access to contract information enables leaders to make informed decisions that align with compliance requirements.

Can you feel your revenue cycle headaches easing already?

2. Defined contract management roles

Contract management software typically includes robust role-based access control. This feature ensures organizations can:

• define specific roles with tailored permissions. Role-based access helps meet HIPAA requirements by ensuring that only authorized personnel can access sensitive contract information. By limiting access based on roles, the risk of internal data breaches or unauthorized changes to contracts diminishes.
• create audit trails to track who accessed what information and when – all essential for compliance reporting.
• assign employees to appropriate roles based on their responsibilities.
• limit access to sensitive contract information on a need-to-know basis. 

3. Standardized processes for contract creation, review, and approval

Standardization ensures that all contracts follow a consistent, compliant format. With contract management software, providers utilize: 

• templates that incorporate necessary legal clauses and regulatory requirements.
• automated routing that ensures all required stakeholders review and approve contracts. 
• version control to prevent the use of outdated or non-compliant contract language.

4. Error reduction and oversight

The automation contract management software minimizes human error, a common source of compliance issues. As mentioned above, 41% of data breaches stem from human error, such as lost or stolen unencrypted devices, insider threats, and unintentional disclosures. 

Contract management software helps providers remain compliant via:  

• automated data entry which reduces transcription errors in critical fields. 
• automated reminders which ensure timely reviews and renewals, preventing lapses in compliance.
• field rules which help staff know when they mis-entered a code or other identifier into a pre-set field

5. Contract lifecycle management efficiency

Efficient healthcare contract lifecycle management fueled by contract management software supports ongoing compliance because it:

• integrates with other systems (e.g., EHR, billing), thereby maintaining data consistency across platforms.
• provides real-time visibility into contract performance which helps identify and address compliance issues promptly.

6. Detailed tracking

This feature ensures that every interaction with a contract is recorded, including:

• creation and modification dates.
• user actions (viewing, editing, signing).
• system-generated events (automated checks, notifications).

This level of detail helps organizations demonstrate due diligence in contract management. 

7. Change documentation

Contract management software tracks the audit trails that provide a history of contract evolution. For instance, 

• all revisions are logged with timestamps and user information.
• approval workflows are documented, showing who approved what and when.
• access logs reveal who viewed sensitive contract information. 

This documentation is crucial for proving compliance with regulations like HIPAA, which requires tracking PHI access. It also establishes adherence to internal compliance policies

8. Internal and external audit support

Comprehensive audit trails significantly facilitate both internal and external audits because they:

• provide auditors with a clear, chronological record of all contract activities.
• help demonstrate compliance with various federal regulations.
• quickly answer specific questions about contract handling and access. 

Should a regulatory investigation arise, your contract management software will serve as your system of accountability and transparency in regards to compliance. 

9. Advanced reporting and analytics 

The reports and analytics inherent in your contract management software contribute to compliance efforts in these ways:

• real-time reporting capabilities enable quick responses to compliance inquiries or audits
• standardized reports ensure consistent monitoring of key compliance indicators

By leveraging advanced reporting and analytics, healthcare organizations can create a more robust, proactive compliance framework. This not only helps in maintaining ongoing compliance but also positions the organization to adapt quickly to changing regulatory landscapes.

Contract management software keeps payers compliant with contractual obligations, too

While healthcare providers often focus on their own compliance obligations, it's crucial to recognize that contract management software also conducts payer performance monitoring to ensure payers adhere to agreed-upon terms and conditions. By leveraging advanced analytics and reporting capabilities, providers can gain unprecedented visibility into payer performance, identify potential issues before they escalate, and make data-driven decisions to optimize their contractual relationships. 

Specifically, contract management software delivers: 

• the performance metrics that highlight underperforming contracts and healthcare underpayments
• risk-scoring algorithms that prioritize contracts or areas that require immediate attention
• comparative analysis to benchmark compliance performance against industry standards

• predictive analytics to forecast potential payer compliance issues before they occur
• historical data analysis to guide the development of more robust, compliant contract templates
• irrefutable performance data that informs negotiations and renewals to ensure ongoing compliance

With support from contract management software, healthcare organizations can improve revenue and strengthen negotiation stance. 

"Love it to keep the payers honest!!! I love how easy it is to review payments from our contracted payers to make sure claims are paid based on our contract rates.” 

–  Senior Contract Manager, Ophthalmology Physician Group on G2 review

Maintain healthcare contract compliance robust contract management software

As regulatory bodies like the Office of Inspector General (OIG), Centers for Medicare & Medicaid Services (CMS), and state agencies increase stringent compliance requirements, healthcare providers using robust contract management software are better positioned to meet these challenges head-on. Ultimately, by leveraging these technological solutions, healthcare organizations can not only avoid costly violations but also foster a culture of compliance that enhances patient care, operational efficiency, and overall organizational integrity.

MD Clarity’s contract management tool RevFind helps providers centralize contract repositories, automate compliance checks, streamline workflows, access real-time alerts, establish comprehensive audit trails, leverage advanced analytics, and more. The expertise and best practices engineered into the tool reduce the risk of non-compliance and associated penalties. Moreover, they empower organizations to proactively manage their contractual obligations and promote transparency in operations. 

 Get a demo to see how RevFind can relieve your revenue cycle team of compliance anxiety and reinforce your revenue. 

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