In modern healthcare administration, managing contracts well is very important for medical practices, hospitals, and health IT departments. Contracts control the relationships with suppliers, insurers, service providers, and regulators. Poor contract management can cause financial losses, break rules, and delay operations. New technology in artificial intelligence (AI) and automation is changing how healthcare groups in the United States handle contract management. This is especially true for risk assessment and compliance tracking. This article explains these changes and how healthcare workers and managers can use these new tools.
Contract Lifecycle Management (CLM) is the planned way to handle a contract from its start, including writing, reviewing, negotiating, and approving, then watching how it works, renewing it, and sometimes ending it. For healthcare providers in the U.S., contracts may cover buying medical devices, supply agreements, service deals, insurance policies, and promises to follow rules.
Usually, managing contracts in healthcare was done by people manually checking, using paper or spreadsheets, and depending a lot on legal teams to negotiate and check compliance. This way can be slow, full of mistakes, and expensive, especially when many contracts must be managed at the same time. When rules change or companies merge, the number of contracts grows and extra work is needed to keep track and lower risk.
Automation and AI now offer ways to make contract work more accurate, faster, and steady. By handling routine tasks, healthcare teams can spend more time making big decisions.
Risk assessment is an important part of healthcare contracts. Organizations must find contract parts that may cause money, legal, or work problems. These can include penalties, ways to end contracts, strange pricing, or conflicts with healthcare rules like HIPAA.
AI tools use machine learning and natural language processing (NLP) to quickly read and study contracts. They pick out key details like payment terms, renewal dates, rule compliance clauses, and penalties. Then they check these details against set risk limits and company policies.
For healthcare practices, AI can:
A big benefit is speed. A 2024 AI in Contracting Report shows AI tools can shorten contract review time by up to 40%. Ironclad’s AI users said they saved about 29 years in total contract review time thanks to automation.
This faster review is very useful in healthcare where contract delays can hurt patient services, supply chains, and rule keeping.
Also, AI accuracy in finding risks can reach 99%, reducing mistakes that cause costly rule-breaking. For example, Oklahoma’s Office of Management and Enterprise Services (OMES) uses AI tools to carefully watch procurement contracts, sending alerts on renewals and endings that improve control.
Healthcare groups in the U.S. must follow many strict rules and policies. Compliance means not only meeting outside rules like Medicare’s but also following inside policies for quality, correct billing, and privacy.
AI helps compliance by:
Automation lets healthcare managers move from reacting to problems to stopping them early. AI tools can flag compliance risks while contracts are being written or reviewed, cutting down long manual checks.
The 2023 E&Y survey shows organizations often spend 30 to 90 days doing full risk checks on vendors or contractors. AI can do the same checks 20 to 50 times faster. This speed is very important for medical practices that often face new healthcare rules or add new technology.
AI contract platforms also support centralized risk management. According to the E&Y study, 90% of groups are moving to centralized systems to better handle third-party risk and contract rules.
Besides risk and compliance, AI provides contract data intelligence. This means it can pull out useful numbers and key performance indicators (KPIs) from contract information. For healthcare managers, this means:
Epiq, a company leading in Contract Lifecycle Management with AI, showed how healthcare firms improved their supply chains by using smart contract data, cutting costs by an average of 5%.
Making contracts standard with AI also helps legal teams by giving them playbooks and templates. This keeps quality steady and cuts negotiation time. This is important in healthcare where contract details can affect patient care and reimbursements.
An important part of using AI in contract management is workflow automation. This means setting up automatic steps that handle contract tasks without needing people to step in all the time.
Healthcare providers often have changing contract workloads. This is common during rule changes, mergers, or when new vendors start. AI workflow automation can:
By automating these tasks, healthcare groups lower admin work and make contract steps faster. Demandbase, a company that used AI for NDA reviews, cut review times from several days to 1-2 hours.
This automation also helps IT managers by linking with current healthcare systems and security rules. This smooth link lets contract data move safely between legal, buying, finance, and medical departments. Decisions can then be made faster and work better together.
Generative AI, a newer AI type, advances contract automation further. It can write custom contract text, sum up long agreements, and give negotiation ideas based on many past contracts and company rules.
For example, Icertis’ Contract Intelligence Copilots use generative AI to:
Healthcare groups can benefit because generative AI helps legal and admin teams work faster without losing contract quality or rule following.
Monish Darda, Founder and CTO of Icertis, says 80% of leaders expect AI to affect their company’s profits within five years. Many expect to train their workers on AI tools for smarter contract handling.
In U.S. healthcare, managing contracts well can change costs, rule following, and the quality of patient care. Practice admins and IT managers who use AI contract systems can:
Healthcare groups that use AI for contracts can work better, reduce legal risks, and react faster to changes in healthcare.
More healthcare groups will use AI for contract management in the next few years. Gartner says by 2027, half of organizations will use AI tools for supplier contract talks. This will push healthcare groups to adopt AI to stay competitive and follow rules.
Healthcare leaders and IT managers should pick AI vendors by looking at:
Good AI use means teaching staff, clear rules, and keeping systems up to date as healthcare rules and needs change.
CLM is a systematic approach to managing contracts from initiation through execution, performance, and renewal or termination, enabling businesses to streamline processes and enhance compliance.
Automation can enhance CLM by integrating AI to manage tasks such as negotiation, risk assessment, and compliance tracking, thereby increasing efficiency and reducing human error.
AI aids in contract management by automating data extraction, analysis, and compliance monitoring, enabling quicker decision-making and better risk management.
Contracts data intelligence provides insights through metrics and KPIs, helping organizations improve revenue, control costs, and mitigate risks associated with contracts.
Optimizing CLM involves assessing existing processes against best practices, standardizing practices, and deploying advanced technology to meet organizational needs.
Templates and playbooks consist of standardized contract clauses and procedures that improve legal efficiency, ensuring consistent quality and compliance across contracts.
This process involves standardizing and migrating existing agreements into a single contracts repository, ensuring a seamless transition to a new CLM system.
Managed services offer ongoing support in system maintenance, user queries, and compliance management, enhancing operational efficiency and reducing errors.
By leveraging AI for clause validation and risk assessment, organizations can identify non-compliance and optimize contract terms to enhance revenue.
Epiq’s solutions emphasize a collaborative approach to legal AI and digital transformation, providing specialized expertise and integrated services tailored to meet client objectives.
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