Healthcare, biotech and life sciences companies rely heavily on external vendors to deliver critical patient services, from managing program enrollment and pre-authorization to ensuring medication adherence and data security. But navigating the complexities of these multifaceted relationships is no easy task. Lack of compliance with key business rules, inconsistent performance and program quality issues can pose significant risks, impacting the program’s bottom line, regulatory compliance and, most importantly, patient care.
The fine print matters: overlooking contractual interpretation issues or inefficiencies in your patient services agreements can trigger a cascade of negative consequences. Are unidentified billing errors draining precious resources? Is a breach of HIPAA-related data about to put you in regulatory crosshairs? Did a vendor’s inadequate staff training lead to an omission in adverse event detection or reporting? Any or all can have a devastating impact on your business.
Being certain your vendors are consistent in maintaining industry standards is crucial. Their diligence translates into more efficiency and reduced costs. On the other hand, a failure on their part can expose your organization to hefty fines, potential litigation — and lasting damage to your reputation.
The brief questionnaire below can help you gauge the overall risk health of your patient services program, including the vendors you rely on to deliver a high-quality result. These 21 yes/no questions will give you valuable insights into the potential strengths and weaknesses of your third-party relationships across nine key compliance categories.
Does your vendor regularly measure the quality of patient care against contractual standards and provide results to the program team?
Is your vendor properly updating standard operating procedure (SOP) and/or business rules (BR) documents to reflect business and regulatory changes?
Is call monitoring/scoring/calibration performed per the vendor agreement?
Is the vendor regularly performing transparent change management, internal assessments and continuous improvement efforts?
Are invoices accurate and fully compliant with the contract payment schedule?
Are all discounts and rebates appropriately applied?
Compliance Checkpoint: The Association of Certified Fraud Examiners estimates that organizations lose 5% of their annual revenues to fraud. Contract compliance audits can detect fraudulent activities such as billing for services not rendered or inflating charges, helping you prevent losses.
Do you have visibility into how the vendor handles protected health information to ensure compliance with HIPAA and other data protection regulations?
Are patient consent and patient opt-out procedures properly managed?
Has an event/incident communication protocol or timeline been established, and do you have adequate insights into overall vendor compliance?
Is there an obligation for the vendor to notify you of any key personnel or ownership changes?
Do you have adequate insight into vendor-reported performance?
Is the vendor routinely missing established performance targets?
Are performance bonuses or penalties properly accounted for?
Is your vendor training on updated SOPs/BRs and providing the underlying reporting for review?
Does the vendor have a process to ensure that training is appropriately assigned and completed promptly?
Are vendor staff completing all required training and professional development according to the contract?
Compliance Checkpoint: The World Health Organization estimates that globally, medication errors cost the healthcare system $42 billion annually. By ensuring compliance with patient safety protocols and quality standards via contract compliance audits, you can minimize the risk and associated costs of such incidents.
Are healthcare providers adequately supported when submitting prior authorization requests and appeals?
Are eligible patients properly triaged to the copay or free goods programs?
Are your copay assistance dollars properly managed and dispersed?
Does the vendor have protocols in place and a staff trained on:
Are patient records accurate, complete and maintained following contractual and regulatory standards?
Compliance Checkpoint: Prevalent’s 2023 Third-Party Risk Management Study reports that 41% of companies experienced an impactful third-party breach in the last 12 months. Regular contract compliance audits can help identify contract gaps that expose you to risk.
≥ 18 “Yes” answers: Nice job! You seem to have a strong handle on your third-party patient services contract and vendor performance. However, it's still wise to remain vigilant. As a best practice, consider including some of the above questions in your annual vendor risk or performance assessment to ensure continued compliance and optimal value.
≥ 3 “No” or “Unsure” answers: You’ve uncovered some potential areas for immediate improvement. An independent contract compliance audit can help identify and address these challenges and maximize the value you receive from your vendor relationships.
Avoiding regulatory missteps is crucial, but contract compliance is about more than sticking to the rules. A contract audit can give you a competitive advantage when executed correctly — ensuring that your third-party relationships are not just compliant but productive and value-driven:
Remember, even small inconsistencies in patient services vendor contracts or performance can have significant financial and compliance impacts.
Want to find out where you have opportunities to mitigate vendor compliance risks, uncover cost savings and enhance your patient services vendor program? Contact our Contract Compliance experts today for a complimentary risk review of one vendor agreement.
