Keeping track of contract renewals can be tedious, but there are many techniques medical practices can use to simplify the task.
Keeping track of contract renewals can be tedious. Whether practices renew such contracts all at once, or throughout the year, there are techniques to simplify the task.
A healthy practice is one that manages its contracts (vendor contracts, service agreements, and leases) well. Many physicians and practice managers, however, are running nonstop and have never taken the time to track their practice’s contracts. Just as clinical pathways promote organized and efficient patient care, effective contract management promotes organized, efficient, and cost-effective practice management.
There is actually a fairly simple method for headache-free contract tracking. I have found that using an Excel spreadsheet in conjunction with Outlook tasks is a proven system to accomplish this. Many contracts are auto-renewing (known as “evergreen”), meaning that once they are signed, they don’t terminate after a certain period but rather continue in effect. Most people get so busy with their practice that after signing the contracts, no one is diligent about reviewing the agreements on an annual basis.
Here are the key items to include in the spreadsheet:
1. A list of all of your contracts
The spreadsheet should contain all contracts, including leases such as property leases and copier leases as well as service agreements and vendor maintenance agreements such as janitorial, landscape, etc.
2. The date each contract is up for renewal
The first date to be listed on the spreadsheet is the date the contract is up for renewal. Be sure to make a note if the contract is auto-renewing and if this is the case, a separate “notification trigger” date should be included.
3. Notes regarding mandated price increases
When reviewing the contracts, take note of any automatic price escalators and if this is part of the contract, a brief note should be included in the spreadsheet. The purpose here is to remind you next year that this contract not only is coming due for renewal, but also has a mandated price increase. This will allow you time to negotiate, shop around, or cancel your current agreement.
The spreadsheet is a central repository for summary details of your contracts/agreements/leases.
After you create the spreadsheet:
Make note of any of the dates included in the spreadsheet in your Outlook calendar. Outlook gives you the ability to effectively manage contract milestones via automated alerts. Based on the dates you have listed in the spreadsheet, you can set up reminders to negotiate rates (taking advantage of renegotiation windows to improve terms); cancel if so desired (without triggering any fees); or put it out for bid (if reminders are set up with enough advance notice).
Going above and beyond:
It is also advisable to digitize the contracts and store them as well as the spreadsheet on a shared drive where access can be granted to select members of the practice. When setting up the Outlook reminders, you may also want to ensure that more than one person receives the alerts.
Setting this up for the first time can be time-consuming and with busy practices that are often short-staffed, this may be something worth getting a consultant to set up for you initially. Then, you can monitor it yourself on an annual basis.