Unlocking the Importance of Contract Audits: 5 Key Reasons

Last week we posted an article on the ideal frequency for contract audits at your healthcare organization. This week we are going to look at the importance of contract audits to the compliance program.

Contract audits are a crucial tool for healthcare organizations to understand and evaluate their physician contracts. The purpose of a contract audit is to review the terms and conditions of the contracts to ensure that they are being executed in accordance with the agreement and comply with relevant laws and regulations.

The Vital Importance of Contract Audits:

Here are just a few reasons why your hospital should prioritize clinician contract reviews:

Compliance

Identify any areas of non-compliance with applicable laws and regulations, such as the Anti-Kickback Statute, Stark Law, and other state and federal laws. Audits can help discover potential violations and allow organizations to take corrective action before any legal issues arise.

Mitigating Legal Risks

Regularly performing contract audits can help healthcare organizations identify and address potential legal risks related to clinician contracts. By making certain that contracts are properly drafted, organizations can help avoid disputes and litigation related to compensation, termination, and non-compete clauses.

Financial Accountability

Conduct clinician contract reviews to ensure that healthcare organizations are meeting their financial obligations to clinicians. It also helps assess the financial performance of the physician contracts, including the amount paid for physician services and the reimbursement received for those services.

Audits done with physician medical billing software like TimeSmart.AI can help identify any discrepancies in physician timesheets or invoices, compensation, and billing practices, which can help prevent potential financial losses. This information is crucial for making better-informed decisions about budgeting and resource allocation.

Read: Navigating the Numbers: Payment Transparency Auditing in Healthcare Organizations

Quality of Care

Evaluate whether the contracts with physicians are aligned with the goals of the hospital for providing high-quality, patient-centered care. This information is important for ensuring that quality targets are being met and that patients receive the best possible care.

Relationship Management

With contract audits, you can build positive relationships with your clinicians, identify areas of potential conflict with physicians, and assess the overall relationship between the hospital and its physicians. By ensuring that contracts are fair and transparent, organizations can help build trust and mutual respect with their clinicians, leading to increased job satisfaction and improved retention.

Based on conversations with contract experts and compliance professionals that our team continues to have, these are just a few of the reasons that speak to the importance of contract audits for the optimal functioning of healthcare organizations. By understanding the importance of, and staying on top of your clinician contracts, your healthcare organization will likely be able to attract and retain top-quality physicians and also maintain a strong reputation in the industry. 

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