Healthcare Contract Management Software: Unlock Revenue & Lift Staff Burden with Automation

Can you imagine a healthcare system with $2 billion in net revenue and 15,000 staff members letting their contracts go 12 years before reviewing them? We were not surprised. Many healthcare organizations have told us that they haven’t looked at their contracts for five years. 

An MGMA Stat poll reveals that 33% of providers do not review their contracts yearly. Specifically, 17% NEVER review them, and 16% review contracts every 2 to 3 years or more. 

58% do review contracts annually – not bad. Still, given the time and energy it takes to make sense of contract data, most do not work up the critical insights that contract management software comes up with within minutes. 

A case in point…

When one 120-physician practice with 30 locations suspected their reimbursements were falling short of their contracted rates, they knew it was time to pressure their payers for appropriate payments, fees, and terms. 

They had suspected they were being underpaid but never had the time or bandwidth to explore the discrepancies. 

After some examination, the group discovered their unfavorable contract terms and rampant underpayments arose because they had no contract management system in place. 

After evaluating several automated contract management solutions, they settled on the one that would handle the onerous contract uploading process and the complexities of their system. Quickly, this solution ingested and digitized all contract data. As payments began coming in, it compared each to the contracted rates. Using machine learning and AI, it revealed the payers and CPT codes responsible for the most underpayments. Once staff notified their payer reps of the errors triggering underpayments, the group recovered $10 million in underpayments. And it didn’t even take hiring more RCM staff to launch and maintain this contract management system.  

More physician groups and practices are turning to contract management software to sweep in all revenue stipulated in their contracts. Here, you’ll learn just how your organization can use it to keep payers honest and your margins expanding. 

What is contract management software?

Healthcare contract management software is a technology that streamlines and automates the management of contracts within healthcare organizations. By centralizing the storage of contracts, it improves compliance with payer agreements and enhances operational efficiency, both of which reduce manual processes.  

This software assists in managing the lifecycle of contracts from creation through renewal, ensuring timely fulfillment of financial and service obligations. Robust software automatically detects variances between payer payments and contracted rates, altering provider staff to these shortfalls. The best options offer scenario modeling, where providers can enter any rate change and see within minutes how it will impact revenue. Finally, its performance analysis features help providers discover which payers authorize the best terms and fees and rank the remaining according to these figures. This competitive intelligence gives providers the data they need to negotiate from a stronger stance or even consider termination should poor reimbursements warrant it. 

Take a quick, self-guided tour through a powerful underpayments detection tool:

Benefits of healthcare contract management software

Use these points to convince peers and managers that contract management software can help resolve a nagging problem your organization has been plagued with for years. Healthcare contract management software is built to:

Improve net revenue: By offering insights into contract terms and performance, the software enables healthcare providers to negotiate better rates, identify underperforming contracts, and optimize for higher reimbursement rates. Hold payers to their commitments and let them know you won’t be satisfied with unfair terms and payments. It’s their legal obligation to fulfill their contracts.  

Clean up the contract management process: Healthcare contract management software automates the entire lifecycle of contracts from creation, execution, renewal, to expiration. This automation reduces manual workload, minimizes errors, and streamlines workflows, leading to significant time savings and operational efficiency. Because it takes much of the thinking out of the contract management process, staff embraces it. 

Reduce compliance and risk:  As a healthcare provider, you are legally obligated to comply with complex healthcare regulations and payer restrictions. Contract management software monitors and alerts you to compliance changes and timelines for both. These alerts help staff stay ahead of contract security and updates,  minimizing the risk of penalties due to non-compliance. Maintaining good standing with regulatory bodies and payers avoids unnecessary hassles and costs.

Support decision-making: With convenient, centralized access to all contracts and their performance, healthcare providers can make more informed decisions. Identify opportunities for cost savings, enhance service delivery, and strategically plan for contract renewals or negotiations. 

Contain denials: Contract management software underlies an important step in the eligibility process. Because uploaded contracts are all searchable, staff quickly retrieve accurate coverage information. The CAQH Index has determined that automating eligibility in this way saves staff 14 minutes over manual confirmation. Further, manual eligibility determination can be rife with errors, and in a busy practice, sometimes the eligibility step gets passed over all together.  Lack of eligibility is one of the top reasons for payer denials. Avoid them with all your contracts uploaded and readily available to confirm or deny coverage.  

Improved patient satisfaction -  Proper management of healthcare contracts underlies access to care, and accurate, timely billing procedures. When contracts are correctly executed and up-to-date, patients have access to the care they need when they need it. Further, accuracy in contract terms helps prevent billing errors, reducing the likelihood of overcharging or undercharging for services. Accurate healthcare contract management supports a transparent, efficient, and quality-focused healthcare delivery system, which in turn helps patients feel valued and well-cared for. 

These benefits collectively contribute to the financial stability and operational success of healthcare organizations, ensuring they can provide high-quality care without the added stress of manual contract management processes.

Data from contract management software 

For most providers, it takes a contract management software solution to finally get insight into these critical areas of revenue. Your solution will reveal: 

• the amounts and sources of your underpayments by payer, CPT codes, or both
• payers reimbursing at the highest rates
• payers reimbursing at the lowest rates
• contract improvement opportunities
• which contracts return the most / least revenue
• renewal dates
• updates on managed care and contract rate changes

With these data points, staff can feel more in control of contracts.

Key features of healthcare contract management software

You want your contract management software to handle everything from initiating a contract to evaluating it against benchmarks to monitoring its overall performance. 

Look for these features in the options you evaluate:

Contract uploading - your vendor should handle uploading all of your contracts to the solution. From there, it will digitize and analyze all contract data.  

Contract initiation -  use the templates provided by the software as a starting point to create contracts with new payers. The contract does not have to originate with the payer.

Contract monitoring - receive alerts for important negotiations and deadlines.

Contract performance analysis - use tools that identify trends, evaluate payer reimbursements, and develop strategies to increase profitability.

Contract forecasting / modeling -  examine how proposed changes to contract terms and reimbursement rates will impact your revenue. 

You can model exactly how proposed payer changes will impact your revenue. Experiment with your own changes via unlimited scenarios. Take a quick tour of efficient contract modeling in action here: 

Workflow automation - work queues based on assignment criteria allows you to automate and delegate tasks.

System integration - most software will integrate seamlessly with your EHR and other revenue cycle management systems.

Intuitive interface - when the software is simple to use, staff will embrace the contract management tasks. 

Flexibility - every healthcare organization is different. Be clear with the solutions you explore about your unique needs when it comes to contract management.

Robust customer support - most vendors offer, not only initial training, but ongoing support, monthly meetings and possibly quarterly business reviews that reflect the underpayments uncovered and more. 

Value-based care and healthcare contract management software

As we cover in this recent article, one of the biggest trends in healthcare is the shift to value-based care. Astoundingly, investment in value-based care healthcare organizations quadrupled during the pandemic from 2019 to 2021. 

Because value-based care achieves better patient outcomes at a lower cost, CMS is aiming for all Medicare beneficiaries and most Medicaid beneficiaries to be under value-based accountable care programs (ACOs) by 2030. And it’s not just governmental entities focused on value-based care. McKinsey & Company projects that value-based care organizations across the United States could double in the next five years, growing approximately 15% yearly. 

Given that one tenet of value-based care is aggressive cost savings, as more providers switch to an ACO model, they will be automating more aspects of revenue cycle management, including contract management software.

Contract management software plays a crucial role in value-based healthcare organizations by facilitating the management of intricate and evolving value-based agreements. It enhances the ability of these organizations to track adherence to the detailed requirements of value-based care contracts, improve financial outcomes by managing reimbursement rates more effectively, and guarantee the precise and prompt execution of contract terms. This software aids organizations in managing the complexities of value-based payments with an emphasis on patient results and cost-effectiveness.  

Cost of healthcare contract management software  

If your healthcare contract management software has a 2X ROI, its initial cost is irrelevant. It’s critical to get your potential software providers to estimate your return on investment based on results from their other clients. Get references to healthcare organizations using the software to confirm the provider’s claims. 

The cost implications of switching to automated contract management software vary. Pricing for these solutions ranges widely, from a few hundred dollars annually for the most basic systems to thousands per year for comprehensive enterprise solutions. 

Several factors influence the cost, including:

• the number of users
• features and functionality
• implementation and integration requirements
• storage space
• number of workflows
• customization needs 
• training and support services. 

Despite the upfront costs, automated contract management can lead to significant cost savings because it reduces manual work and errors, improves compliance, and reduces risks. On the other side of the coin, as mentioned above, underpayment recovery and better overall contract fees and terms raise revenue. Lower costs and higher revenue put your organization in a stronger position to expand or attract investment. 

When considering automated contract management software, companies should be aware of potential hidden costs such as implementation, training, support, integrations, upgrades, and overages, which may incur additional fees beyond the base price. In conclusion, while costs can vary widely, organizations should carefully weigh the upfront investment against potential long-term savings and efficiency gains. 

How to transition to an automated contract management solution

The shift from manual processes to a streamlined, software-driven approach can significantly improve contract handling, reduce errors, and optimize financial performance. By following a structured transition plan, healthcare organizations can successfully implement automated contract management solutions tailored to their specific needs and reap the benefits of enhanced contract lifecycle management. Follow these steps: 

1. Assess current contract management practices

•    Evaluate existing contract handling processes and identify inefficiencies.
•    Determine areas where automation can improve accuracy and reduce manual work.

2. Define objectives and requirements

•   Outline specific goals for contract management improvement.
•   List essential features needed in an automated solution, such as contract storage, tracking, and analytics.

3. Select appropriate software

•   Research healthcare-specific contract management solutions.
•   Choose software that integrates with existing revenue cycle systems and offers features like automated alerts and reporting.

4. Plan implementation strategy

•    Develop a timeline for software adoption.
•    Assign roles to team members for various implementation tasks.

5. Prepare and migrate contract data

•    Gather all existing contracts and related documents.
•    Digitize paper contracts if necessary.
•    Import contract data into the new system, ensuring accuracy and completeness

6. Configure the software

•    Set up user accounts and access permissions.
•    Customize workflows and templates to match revenue cycle processes.
•    Implement automated alerts for key contract dates and milestones.

7. Train revenue cycle staff

•    Provide comprehensive training on the new software.
•    Offer ongoing support to ensure smooth adoption and utilization.

8. Implement in phases

•    Start with a pilot program in a specific department or for certain contract types.
•    Gradually expand usage across the entire revenue cycle team.

9. Monitor and optimize

•    Regularly review the system's performance and user feedback.
•    Make necessary adjustments to improve efficiency and effectiveness.
•    Use machine learning and AI tools to identify trends and opportunities for revenue optimization.

By following these steps, healthcare revenue cycle management teams can effectively transition to automated contract management, improving accuracy, efficiency, and financial performance.

Automate contract management with MD Clarity

Inefficient contract management leads to unfavorable fees and terms that diminish provider revenue. Show up for the revenue you’ve earned with MD Clarity’s RevFind – software that ingests, digitizes, and analyzes contract terms and fees from all of your payers, consolidating them in a single location. It compares every actual payment received to payer contract terms and alerts staff to discrepancies between those two figures. Pursuing these underpayments can result in millions of dollars in cash recovered and improved margins.

An automated process, RevFind is a simple yet effective solution that improves your healthcare organization’s net revenue and alleviates crushing staff workloads.

Request a demo today to take the pain out of contract management, and chargemaster optimization.

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