HealthSystems Direct LLC

Contract Evaluation

The idea of a standard contract is dead. With the constant evolution of managed care entities, the sharing and shifting of financial risk (and the sometimes not-so-sensible allocation of administrative responsibilities), contractual issues have taken on increasing importance. Legal assistance is always wise; however, legal assistance is not the only step in contractual evaluation. The details of implementing the contract often frustrate the best intentions. Thoroughly delineating responsibilities, regulatory issues and compliance verification, as well as the realistic internal capability evaluation of both parties, are only the first steps taken to maximize the chance of successful implementation.

Evaluating business relationships in the current environment requires an eye toward the future developments of HCFA, NCQA, State Insurance and Health Departments, and market trends. Many “deals” have been terminated because of culture, and existing or newly created, regulatory or certification conflicts. Time and resources are squandered on a contract that will never be effectively implemented because of what should have been a foreseeable conflict that would arise during implementation.