A robust Contract Lifecycle Management (CLM) system is one of the most critical needs for healthcare organizations to achieve and maintain compliance. However, not all CLM solutions are created equal. Any missing key feature from those covered in this article, can put an organization at significant risk.  

Below is a breakdown of the essential elements every healthcare organization should ensure their CLM solution provides so users can have confidence in maintaining organizational and regulatory compliance and security to contracts, supporting documents and data. 

Key Features of a Healthcare-Specific CLM Solution include: 

  • Required Data Points
  • Automatic Notifications
  • 3-Tiered Security Model
  • Contract Records’ Relationship to Vendors and Files 

Emily Danek 00:28

Hi, my name is Emily Danek. And I’m Ntracts’ VP of Strategic Projects. Through my last five years at Ntracts, I’ve been able to sit and work in many different positions and departments and tracks. And that’s really given me a unique perspective and insights into our clients and our contract management system. It’s helped me understand how clients utilize our system, how we can educate our clients to use the system in different ways, and how we can support them through their partnership with Ntracts.

One thing that I always like to understand and discuss with clients is, what do they see as the basics of their Contract Lifecycle Management solution, and what are the vital elements for them to succeed, we always encourage starting with the basics and setting a strong foundation to utilizing a CLM before taking steps into diving deeper into data insights or innovating in larger jumps like AI or legal playbooks or something like that.

So what I would like to do today is talk through how maintaining that strong foundation and establishing that from the start is poor to your CLM success and to maintaining compliance for your healthcare organization.

The basics that I would like to cover today are going through key required data points for your CLM the ease and use of our automatic notifications to be alerted of upcoming expiration dates, or other key critical dates within the system, receiving notices on those direct tasks functionality. And then talking through the the relationship between our contract record to vendors and files. And lastly, that three tiered security model to make sure that the appropriate people have access to view and or edit the agreements and that they’re not widely available for the entire organization.

So I’m going to hop into our system. And right here is our landing page. And one thing that’s really special about the Ntracts landing page is that it gives you some insights into your data. So it starts with showing a breakdown of the contracts that you would be considered the contract owner for so you’d be responsible for these agreements, it toggles between the line contracts and the All Contracts on all of our widgets. And what that shows, is, like I said, my contracts are ones where I enlisted as a contract owner, and all contracts are all the contracts in the system that I have access to. Now there may be 1000s of more contracts within my hospital’s database. But these are the core ones that I have permissions to through that three tiered security model. So I want to start with those basics of required fields.

One thing through my time in the contract management space is that different systems have different required fields, and some are missing this, they missed the requirement on data points. And this is really key and important to maintaining a compliance solution to ensure that all the necessary data points are being tracked, and that the agreement is active and fully executed before paying the vendor or the provider, or understanding of the terms of the agreement before the renewal getting notified of the upcoming expiration date to ensure that you can opt out if you don’t want to continue that relationship. So what I’ve done is I’ve jumped into one of our contract records. And this is what I like to call the core of the system. So a contract record is where I can link my internal and external parties as well as the file records that apply to this agreement. Like I said, I wanted to start just talking through those basic key required fields in our system and how that can support your system.

Usage of the CLM system and understanding those basics. So starting on the left we can identify what parties are associated with this contract. They’ll all be tagged as either internal or external or others so that we can easily see what internal organizations are a part of this contractual agreement, you can add more than one. And then who’s my vendor? Who’s that outside party? Is that a company? Is it an individual? Or is it a provider or a physician group. Anytime you see these blue hyperlinks, that means I can quickly navigate between the external party and the contract record.

So I can see what other agreements are with Dr. Dwight, that I have access to. So if I jump to this, I can see, okay, Dr. Dwight has no other agreements, there’s nothing else I need to check. But if I come into edit mode, we can kind of talk through those required fields. So starting at the top, we have the two requirements related to our internal contracting entities, and then those external parties. And the next is on contract status. What we’ve seen in the past, and some are systems, and some organizations like to utilize a long list of statuses to track contracts in different phases, we’ve taken the time to really drill down and identify four key statuses that get updated either manually or automatically depending on which stage a contract is in. And what is going to happen with that agreement, are first on status to talk through is called incomplete. So that’s when I may not be using workflow, I may just be using contract management. Or I may have an agreement that was signed outside of the system that I need to bring in and I don’t have all the information to it. So I can put it in an incomplete status. To flag myself like this contract is missing some data I need to review. And then once I receive that data, I can come in and I can change it to active. Once a contract is in inactive status.

There are a set of required fields to maintain compliance, which we’ll go over in just a minute. The next status is expired. If I have an active contract that has an expiration date, and no auto renewal, either evergreen or limited, once that expiration date comes around, if I haven’t already taken action on it, it will move the contract into an expired status automatically. So that I can quickly come to my contract list either my contract grid through reporting or through that first landing page and see what contracts are in that expired status and act on them.

The last status is closed. So this is anything where a contract has been terminated. It’s lived its term, but there’s no renewal, or it’s been archived, those can all be tracked in that closed status. And also reported on the next required field that we have is called contract fully executed. And I find that this is a unique field to interact, where we can quickly toggle between yes and no, if I have that fully executed agreement within my CLM. This is a key data point to make sure that this contract is in compliance. It’s known if it’s fully signed, and if it’s not fully signed. And this is used a lot of a lot of the times with finance, to make sure that we have that fully signed agreement before we pay on any providers or vendors. And if we don’t have that fully signed agreement, then we can reach out to the appropriate parties to make sure that we locate it and bring it into the system. And say that this conceptual thought and making sure we have that contract, fully executed and housed in the system is a really good piece to maintaining that single source of truth and guiding and pointing people back to end tracks to come here to find that fully executed agreement.

The next two data points that I want to call out our primary contract type, and department. And I find these two data points to be unique to healthcare specific CLM, I would say agnostic CLM don’t have this specificity, or it doesn’t play the same role that it might and tracks. So these allow us to tag contracts down to the type of contract that it is as well as the department that it belongs to. And these helps us to build out our roles around permissions and who can access this agreement. I’ve seen in the past where agnostic CLM are built around one tear and their security structure, maybe just primary contract type and they don’t use department or the internal entity to help drive permissions. And so this allows us to create roles specific to a healthcare system and to a person’s role or function.

Then at the, at the organization or next to require data points are the dates of the agreement. So what is the effective date, and what is the initial expiration date, these are required. And they always should be required to ensure that there’s proper monitoring and tracking of all contractual obligations within your system. Again,

Emily Danek 10:24

I find that this data point isn’t required across all systems CLM, particularly again, across those agnostic ones, they might be using AI to pull this data in. So instead of it being a date picker, it might be a text field, or just might not hold that same way of that expiration date. This is a really important data point to us to make sure that our business owners or contract owners are being notified on contracts coming up for expiration in a timely manner, and in a manner where they can take action on that agreement. We do this through automatic notifications. So once a day, a summary email will go out to contract owners have all of their contracts coming up for expiration for auto renewal, and a couple other trackers so that they can begin acting on it in a timely manner.

Like I mentioned, once a contract either comes for expiration, and it doesn’t auto renew, it will stay 5 31 2025. And that status will flip from active to expired. But let’s say it did have auto renewing provisions, the year would tick forward, whatever that term length of that renewal is. So for example, if it was a 12 month renewal, it would jump to 2026. Min, scroll down to our terms and conditions where we track another few key required fields. So we want to be tracking those auto renewing provisions. So that systems are aware of what are my auto renewing contracts. But am I limited ones do I have auto renewing contracts where I have multiple vendors providing the same function or service so that I can terminate one or more of those and identify cost savings within my organization, we have the option to track if they are aren’t auto renewing. And then if yes, they do auto renew, we can track if they’re at Evergreen, or a limited cadence and what that month cadence is.

Excuse me, the last set of required fields that I want to talk through and of course, you see lots of other data points that can be tracked and filled in. They are all they are required. They’re just additional data to drive further insights.

The last data point I want to talk through is contract owner. And again, this was surprising and doing some research how this required field isn’t across all Contract Lifecycle Management Systems. Again, the industry agnostic ones don’t highlight this or emphasize this as much, or even have this type of field. But what this does is each contract has to have a contract owner. And that is the person who is responsible for the obligation and will receive those automatic notifications to be able to take action on the agreement.

I’ve seen in some other systems where this isn’t even a data point tracked and to those notifications are automatic, they’re set off of schedules that I would have to create a view and set that scheduled to begin receiving it. So it’s it’s interesting to think through how contracts could fall into a gap and where they aren’t being tracked and they aren’t being notified. And as a contract comes for expiration, it’s not being included in anyone’s list in some of those industry agnostic systems, where it’s on the user to create that report that captures it, and within and tracks. Each person has to be identified. And they will receive those notices. So we can use that as an audit trail to make sure hey, if a contract did renew that we were intending not to how did it slip through the cracks? Or we can look at, hey, this one employee manages hundreds of contracts, whereas someone else manages a smaller subset. Can we evenly distribute the work between clients and the workers there? And so we really see these key required fields as really essential to maintaining compliance within your organization and just tracking the basics. And really once an organization becomes very good at making sure all those data points are in there.

Are you saw as I scroll through, there are lots of other data points that can be tracked and use to drive insights into your organization, how you operate, where there may be bottlenecks and then start to think through how can we be more innovative in our contracting process? And how can we do that with and track supporting us? I briefly touched on it, but we do have the automatic notifications. So users receive these in two ways. They either receive them, sorry, they receive them through an email, once a day summary or through an app notifications, you’ll see this kind of has a similar feel to an email inbox where I can check all things I can mark as read, I can delete as I go, if I really want to keep it clean. And I can also filter down to specific types of notifications to really drill down into what I need to be reviewing, it’s really nice and easy way to see my work, I can then come in, click on this, and view that contract, record and make any changes that are necessary.

The next thing I want to speak to is that contract relationship. Within and tracks, we have really created a unique system, where we have our contract record, our file record, and our vendor external party record. And those three elements can be connected to each other or associated to each other. And it allows us to be able to see the full picture for either a contract, a vendor or files. Looking at a contract, I can track all the parties and all the files that are associated to it. If I come to a vendor record, I can see what other contracts do I have with this vendor? What are the terms that bid what other services are being provided and be able to do some consolidation or cleanup if needed. This can happen a lot when hospitals new from a decentralized decentralized contracting process, each hospital may have had a contract with software data Inc, doing the same services, and we actually have an opportunity to consolidate those across one contract record.

Additionally, the file record, one thing that I find very valuable is the ability to associate one file across multiple contract records or party records. You see this a lot with maybe bas with the company, instead of having to upload that into each individual file record, I can, apologies contract record, I can upload it that one time and associated to multiple contract records. You see this a lot with FMVs as well, if they apply to a large subset, I can upload that file once and create those relationships. And it makes it really easy when that agreement comes up for expiration, instead of having to re upload that same agreement 20 times I can upload it that one time and make those associations.

The last item that I wanted to speak to which we briefly touched on, and I’m going to use this contract details view is that three tiered security model, at Ntracts racks we really understand the importance for how to permissions around contracts, or making sure that not everyone has access to everything. You know, clients will come in and they’ll be hesitant to store their clinician contracts in the same system that they have their services agreements. But with Ntracts with those three tiers in our user roles, we are able to really provide unique and specific access to make sure that no one is seeing information that they shouldn’t be seeing through those three data tags. So our model is built around access to an internal entity, primary contract type, and departments. So depending on what combination those are used on a contract record determines what access can be given or what roles have permission to it.

This was another area that was interesting in reviewing against other CLM systems, and again, primarily agnostic is that they often have only one level to their security model and its primary contract type. So you set users that have access to all NSA as well we know that that’s really not feasible within healthcare, we need to be able to be more secure and provide more unique settings or access to contracts. And it would become really unmanageable in that single tier because you’d have to be creating, you know, multiple LSAS or who knows what it really so that restraints are given around. Jane Doe can only see services agreement, John Doe can see services agreement and clinician agreements. So really interesting things to think through as you are working on those foundations of your contract management system.

Emily Danek 20:25

Thank you for spending your time with me today reviewing a few basics of a Contract Lifecycle Management solution, and how they can help support your organization to maintain compliance and to maintain security around your contractual agreements. Thank you for spending your time with me and I hope you have a great day.

1. Required Data Points, Comprehensive Data Tracking 

The foundation of any CLM system lies in its ability to track data points accurately. Beyond simply tracking data points, a CLM appropriate for healthcare organizations should go even further – it should require that specific and essential datapoints are entered to ensure proper monitoring and tracking of all contractual obligations.  

Requiring this data, ensures that critical information is captured, and that there is virtually no risk of oversight or error when it comes to effective, expiration and other key critical dates, in particular, related to the contract. Mandatory data points also standardize contract entries, making it easier to generate accurate reports and conduct audits.  

Moreover, having required data points helps in maintaining compliance with regulatory standards, as it guarantees that all necessary details are documented and readily available for review if needed to provide evidence of compliance. Many non-healthcare  CLM platforms do not require entry of key data points, which puts the organization at risk. 

At a minimum here are the required data points we recommend (and track): 

  • Parties to the Contract: Clearly identify internal and external parties involved in the agreement. This helps in understanding all parties to the agreement.
     
  • Effective & Expiration date: Proper tracking of these dates ensures timely actions on upcoming contract renewals and terminations, preventing lapses in contract term and compliance. 
  • Contract Status: Implementing a simple, yet effective status system (e.g., incomplete, active, expired, closed statuses) ensures that contracts are properly monitored throughout their lifecycle. Whereas very granular status options can cause confusion and can create more problems in monitoring than they are trying to solve. 
  • Auto-renewal clause, if applicable
  • Auto-renewal terms / times
  • Termination / Out clauses
  • Contract is Fully Executed:  Knowing whether a contract is fully executed is crucial before any payments are made. This prevents unauthorized transactions and ensures all agreements are legally binding. As it relates to physician agreements, services cannot be performed prior to the effective date of a fully executed agreement, this field is key to ensuring that compliance in maintained.
  • Contract Responsible Parties
  • Primary Contract Type and Department:  These fields help in categorizing contracts accurately, allowing for better organization, reporting and control of user access permissions. Departments and contract types should be tailored to meet the specific needs of  healthcare organizations. 

When AI tools are used for data entry, contracting and compliance professionals must ensure that manual oversight remains vigilant. Regardless of the method of entry, many data points must follow a particular format in order for other features in the solution to work properly.  

For example, an expiration date that is reviewed and entered by an AI tool within another system often falls into a default text-based field rather than a date-picker field. A date entered as text, often cannot be included in reporting instances and or used to properly identify the date upon which to send notifications.  

2. Automatic Notifications

Automatic notifications are a crucial feature in a Contract Lifecycle Management (CLM) solution. Particularly for healthcare organizations. The ability to send automatic notifications for critical dates, such as upcoming expirations or renewals, ensures that contract owners are always aware of important deadlines and can take necessary actions promptly. This is especially important for managing auto-renewing provisions, as missing these deadlines can lead to unintended contract extensions or renewals.. 

These notifications should be sent via email and through in-app alerts to ensure that contract owners receive timely reminders. Email notifications provide a direct and easily accessible way to keep track of critical dates, while in-app alerts offer real-time updates within the CLM system itself, allowing users to take immediate action if needed. 

Additionally, the CLM system should have the capability to summarize upcoming critical dates via daily push emails. These summary emails provide an overview of all pending tasks, ensuring that contract owners are consistently updated on all important critical dates including contract expirations, auto renewals and other upcoming deadlines. This daily digest helps users prioritize their tasks and workload, reduce the risk of missing critical dates, enabling them to maintain a proactive approach to contract management.

3. Robust Security Model

Security and access to data is a top concern in healthcare, and a Contract Lifecycle Management (CLM) system must provide a multi-tiered security model to control and maintain access effectively. This model ensures that sensitive data is protected and only accessible to those who need it, thereby ensuring confidentiality and preventing data breaches. 

The security model should include restrictions based on internal entities, contract types, and departments. Access should be limited to users within specific organizational units or departments, ensuring that only individuals directly involved in a particular area of operations can view or modify the contracts related to their function, thus reducing the risk of unauthorized access. Additionally, different types of contracts—such as vendor agreements, clinician contracts, or service agreements—often contain varying levels of sensitive information. By restricting access based on contract type, the system ensures that only relevant personnel with the appropriate authorization can view and manage these documents. Furthermore, department-based access control ensures that sensitive information is compartmentalized and accessible only to those within the appropriate department. Examples include restricting financial agreements to finance personnel, clinical contracts to clinical management teams and physician agreements to the physician enterprise. 

A comprehensive securing model includes implementing strong authentication measures and conducting regular access reviews to ensure compliance with security policies. Protecting sensitive information from unauthorized access is essential for maintaining confidentiality, especially in healthcare, where contracts often contain private and legally protected information. Ensuring that only those with a legitimate need to know and access certain information can do so, helps maintain the trust and integrity of the organization 

Multi-tiered security vs. single-tiered: 

When CLMs offer the same permissions to all users, healthcare organizations must then create work-arounds to remain compliant. For example, when using a contract management system with a single tiered security option, compliance professionals might determine it’s best to keep their physician agreements in an entirely different system rather than in the same system their service contracts are stored within. This impacts oversight of contracts throughout the organization, thereby making maintaining compliance more difficult – given all agreements in healthcare are subject to some type of regulatory compliance and oversight. 

Overall, a multi-tiered security model in a CLM system is essential for protecting sensitive information, maintaining compliance, and ensuring that only authorized personnel have access to critical contractual data. This approach not only enhances security but also supports the efficient and secure management of contracts within healthcare organizations. 

4. Detailed Contract, Document, and Record Relationships

An effective CLM system should allow for detailed tracking of relationships between contracts, vendors, and files. It should provide the option to associate a single file with multiple contracts, streamlining document management. 

Linking contract records with internal and external parties, along with its related files, is pivotal for contract management efficiency. Associating records, allows for a comprehensive view of all agreements and related documents, fostering seamless collaboration and communication between all involved stakeholders.  

By creating these connections, organizations can ensure that every relevant document and party is easily viewable and accessible, reducing the time and effort spent searching for information. This linkage streamlines contract administration, aids in identifying overlaps or gaps in agreements, and supports more informed decision-making by enhancing transparency.  

Conclusion

With the regulatory rigor surrounding healthcare organizations, it becomes crucial to partner with a contract lifecycle management solution that understands healthcare and how the essential features covered here are specifically necessary for healthcare organizations to maintain compliance and mitigate risk.

By setting a strong foundation with the basics, your organization can not only mitigate risks, but also build a more efficient and compliant contract management process for years and decades to come. The goal is not just to manage contracts but to leverage your CLM solution to maintain regulatory and organization compliance and drive insights and innovations that support your organization’s broader goals.

About Emily

Emily Danek
Emily DanekVP Strategic Projects, Employee Engagement

With 9 years of healthcare CLM experience, Emily Danek has a passion for building teams and solving clients needs with technology. Emily has been at
Ntracts since May of 2019 and has spent time working with clients, supporting their use of Ntracts’ solution. She also spends a portion of her job working with employees to support their departments and growth initiatives.

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