Published: Mar 11, 2024
Updated:
Revenue Cycle Management

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

Suzanne Delzio
Suzanne Delzio
8 minute read
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When one 120- physician practice with 30 locations suspected their reimbursements were falling short of their contracted rates,  they knew it was time to hold their payers’ feet to the fire on payments, fees, and terms. They had suspected they were being underpaid but never had the time or bandwidth to explore the discrepancies. Recognizing some of the fault stemmed from their side, a quick exploration found outdated contracts and staff passing around responsibility for management. 

With basically no contract management system, the group was vulnerable to unfavorable contract terms and rampant underpayments. After evaluating several automated contract management solutions, they settled on the one that would handle all contract uploading. Quickly, this solution ingested and digitized all contract data. It revealed the payers and CPT codes responsible for the most underpayments. With these issues uncovered and addressed, the group recovered $10 million in underpayments. Automation also reduced the need to hire more staff.   

In a short-staffed environment where every dollar matters, more physician groups and practices are turning to contract management software to keep them in compliance and provide the insights that empower them to negotiate terms and fees. As with many healthcare administrative tasks, technology has stepped in to support staff in optimizing net revenue. 

Here, you’ll learn just how your organization can use healthcare contract management software to achieve results like these. 

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. Its analysis features help providers discover just which payers are providing them with better terms and fees. This competitive intelligence puts providers in a stronger negotiating position with payers. 

Benefits of healthcare contract management software

Once physician groups realize how a streamlined contract management system can support their staff and their revenue, they stop avoiding the task. These additional benefits 

Improved 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.  

Operational efficiency: 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. 

Compliance and risk reduction:  As a healthcare provider, you are legally obligated to comply with complex healthcare regulations and payer agreements. Contract management software provides tools for monitoring and alerting to compliance changes, timelines, and more. 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 partners avoids unnecessary hassles and costs.

Decision support: With convenient, centralized access to all contracts and their analytics, 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 retrieves 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

This kind of knowledge gives you the power to negotiate better contracts and make better decisions about your payers and your services. 

Key features of healthcare contract management software

Sometimes, a provider’s current RCM solution will offer automated contract management in addition to other modules. Given how centrally contract management figures into eligibility determination, using a vendor with proven expertise in contract management is critical. A contract management specialist should be able to make the case that they can enhance your reimbursement rates. Seek client success stories and request references. 

Key functionalities across most software include:

Contract monitoring - receive alerts for important negotiations and deadlines.

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

Analytics - tools that identify trends, evaluate payer performance, and develop strategies to increase profitability.

Contract uploading - your vendor should handle uploading all of your contracts to the solution. 

Workflow automation - functionality that allows you to automate manual 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. Through automation, 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, thereby aligning with their strategic objectives to provide high-quality, affordable care.

Optimizing contracts for upload

Your contract management software vendor will need to feed your most current contracts into their system. From there, it will digitize and analyze all contract data.  Unfortunately, the healthcare staffing shortage and opacity on how to manually manage contracts results in contracts languishing unreviewed for years. A recent MGMA poll reveals that 33 percent of providers do not review their contracts yearly. Specifically, 17 percent NEVER review them, and 16 percent review contracts every 2 to 3 years or more. To tell the truth, we’ve had many clients admit they haven’t looked at their contracts for five years or more.

58 percent 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 within minutes. 

To get your contract management software working for you, prepare by finding and centralizing all contracts. If you can’t find contracts, rest assured many have the same issue. Reach out to your payers and ask for the most recent versions. Don’t let them stonewall you. Repeat your requests and set a deadline for them to comply.  

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 to 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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