Insights from Ludi

Contract Management Systems: What They Do (and Don't Do)

Posted by Michelle Harmon on Apr 19, 2017 8:59:21 AM

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Hospitals and their many contracts have long been determined as a problem to manage. Several organizations have created top-of-the-line software for hospitals to eliminate paper, wasted time, and automated preparation for those looming threats of an audit.

Contract management systems offer secure warehousing, filing, notification of expiring deadlines, and report writing capabilities further management analysis of existing contracts. What they don’t do for hospitals and physician contracts is manage the complex hourly math that is written by attorneys and management teams to fairly reimburse their physician(s) for the various administrative duties that fluctuate throughout a monthly time period and most certainly within a 12-month budget.

Even if you have a contract management system, the filing and the warehousing component of your physician contracts has issues. Amendments are added (or not) and physician contracting is still done in silos. You can’t warehouse what you don’t know, add, or count.

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With our extensive database on how physicians get paid, we have seen it all, payments are all over the place depending on the type of agreement and alignment strategy for the physician. We have cataloged 24 separate payment mechanisms for physician administrative time. Those include one physician vs. a group, a minimum payment vs. a maximum payment, shared group payments, and stipends vs. hourly payments. That’s just to name a few.

Physician administrative contracts are based on active participation with the physician and this is accomplished through a physician documenting her time and her duties. These hospital partners (aka physicians) are incredibly busy; taxed more and more throughout their day with other activities that need to happen including patient care – their main priority. It’s not an unrealistic issue to have a busy or harried physician write non-compensable duties on their time log, submit it, and have it paid. This carries with it technical violations and fines. A simple occurrence and simple to miss. This causes “backtracking” for paperwork, communication, and payment. It’s also an issue for audit purposes and most generally aggravates your physician partner who may or may not understand what she did incorrectly.


Contract management systems would never catch these “easy to make” daily operational mistakes as they are not created to do so, their priority is to house the paperwork as a record. The paper is actually “alive” and having easy transparent storage is only solving half the equation of the business issues. Complex physician arrangements require a software solution that automates their operational parameters to ensure compliance and accuracy for the exchange of remuneration. It also requires an easy to use physician interface so hospitals don’t further creatively torture their physician partners.

Shocking Stats on Physician Contract Pitfalls

Topics: time management, physician contracts, contract management systems