What happens when payers don’t comply with contract terms? What if a provider overlooks the fine print? Contracts between healthcare providers and payers are supposed to make each party’s responsibilities crystal clear. The reality is often murky. Providers face expensive consequences if they fail to adhere to payer policies – yet they often struggle to hold payers to the same level of accountability when it comes to being paid on time and in full.
That’s why good contract management matters. Ensuring both parties are aligned from the start protects providers from unmet expectations and revenue loss. This article looks at how contract management software for healthcare helps streamline this process, reduce misunderstandings and secure a more predictable revenue cycle.
Understanding contract management in healthcare
Contract management in healthcare includes all the processes involved in negotiating, executing and monitoring agreements between payers and providers. As healthcare services (and how they’re financed) become more complex, it’s increasingly important that these contracts are airtight.
Providers need assurance of proper reimbursement, while payers want to control costs. Robust contract management helps avoid disputes so both sides can meet their financial and operational goals and maintain an effective working relationship.
As Timothy Daye, Director of Managed Care Contracting at Duke Health Integrated Practice, puts it, “It’s about getting paid correctly per your contracts, so you don’t leave money on the table.”
Challenges in healthcare contract management
The challenges that could leave money on the table fall into four main areas:
- Complex negotiations: Providers handle thousands of contracts with multiple plans and provisions, all subject to changing regulations. Managing these negotiations can be time-consuming and overwhelming.
- Limited data analysis and visibility: To negotiate better contracts, providers need to factor in performance data for existing contracts and current figures for patient mix and volume. Evaluating contract terms is extremely difficult without access to the right data and models.
- Conflicts over claim denials: Underpayments and denials are the biggest challenges for providers, with payers reportedly denying 15% of all claims initially. Disputes over claims, payments and contract interpretations strain relationships and disrupt revenue cycle performance.
- Reliance on inefficient and manual processes: Poorly defined processes and miscommunications contribute to a lack of clarity when it comes to contract governance. Paper-based systems that lead to errors, delays and millions of wasted dollars don’t fulfill the brief.
Key features of contract management software
To tackle these challenges, healthcare providers are increasingly turning to contract management software. Experian Health’s Contract Manager solution improves efficiency and accelerates reimbursement by automatically checking claims before submission and validating expected reimbursement against allowed amounts. Here’s how it works:
- A team of contract analysts assesses the organization’s contract terms, fee schedules and payment policies to clarify what’s required and when.
- Accurate rates and authorization rules are populated automatically to minimize pricing errors and reduce manual effort.
- Contract mapping and claim valuation logic reduces the risk of audits and penalties, while automated alerts help providers ensure their contracts comply with current healthcare regulations.
- Configurable online dashboards give staff immediate access to reimbursement reports, so they can compare expected and allowable amounts and monitor performance.
Unlike manual systems, contract management software can be easily scaled for organizations of any size. Because it integrates seamlessly with existing hospital information and practice management systems, Contract Manager can audit claims for a single medical practice or a large health system with one solution.
Watch the webinar: Hear how OrthoTennessee used Contract Manager to validate reimbursements, pursue bulk appeals and recover underpayments at scale.
Benefits of using contract management software
Simplifying contract management with software results in three main benefits for providers:
1. Increase revenue by validating reimbursements and reducing underpayments
Automated oversight of payer contracts makes it easier to find discrepancies between the amounts billed and the rates agreed in payer contracts, resulting in increased revenue. This software helps providers avoid missing out on reimbursements because of buried contract clauses and supports contract-based appeals to recover underpayments.
2. Negotiate better terms (and relationships) with payers
Contract management software allows providers to evaluate contract results and use that information to assess proposed terms for new contracts. This puts providers on a stronger footing in negotiations and allows them to agree to more favorable terms. More effective communications and quicker dispute resolutions also improve provider-payer relationships.
3. Streamline workflows for speed and scale
Finally, automated workflows combine more accurate data to process claims faster, leading to a more predictable revenue cycle. They also lower administrative costs and allow staff more time to prioritize other patient-facing and revenue-building activities.
For these reasons, Experian Health’s Contract Manager product was ranked “Best in KLAS” and top-client rated in Black Book solutions in 2024.
Secure financial stability with contract management software for healthcare
Contract management may not be the most visible revenue cycle activity, but even a small change in terms can make or break financial goals. As providers work to cap costs while maintaining quality, contract management software has become critical in securing fair reimbursement rates and auditing payer contract performance with confidence.
Find out more about how Experian Health’s contract management software for healthcare providers validates reimbursements, reduces revenue loss and strengthens relationships with payers.
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