Monday, January 17, 2011

What EHR Contract Issues are Important?

EHR contract negotiations should based on the fact that your practice, and not the vendor, is responsible for maintaining your patient records.  Anything that could inhibit your access or use of patient information will cause you problems and may compromise patient health.  Unfortunately, most EHR contracts do not recognize your obligations or accommodate your situation.

Contracting for an EHR actually consists of three portions: the business deal, key contract issues and contract details.  This article will focus on essential business issues and key contract issues.

The business deal is the basis for the implementation effort and your financial arrangement.  Unfortunately, many contracts do not adequately establish either.

Licensing – Most EHR vendors base license components on the number of entities (Ex. Clinic and a separate ASC), number of users, providers, or even a combination of factors.  The licensing portion of the agreement has to account for situations that require flexibility such as part time providers and staff as well as locations that may be used only once a week. As important, the contract should be clear on the cost of adding additional users or providers in the future.  Everyone and anyone who works in your practice will need access to the EHR.

Support Costs – In order to receive future enhancements as well as get assistance resolving problems, vendors charge a periodic support fee.  The typical support fee runs 15% to 30% of the license cost.  Note that you cost analysis should include the support fee for several years when comparing various products.  Support fees typically start when you receive the software or even sign the contract.  As a practical matter, you are not really in the position to need support until you are taking advantage of the product.  As important, support fee escalation should be addressed in the contract.  The fee escalation should be capped at a set percentage or a cost benchmark such as the consumer price index. 

Scope of Work – Many vendor contracts lack details on the implementation strategy and plan.  Without such a plan, the estimate of cost and hours are subject to a wide range of implementation decisions.  As important, your practice may not be clear on the level of effort and work items that you will be responsible for.  The contract should explain the division of responsibilities that services estimates are based on as well as include options that you may want to take advantage of in the future.  For example, evaluation of PQRI compliance or Meaningful Use measures may not be worthwhile until you have fully deployed the EHR and all doctors are directly working with the EHR.  Similarly, a train-the-trainer strategy assumes that selected practice staff will be training the rest of your employees.  The selected staff will need adequate time to learn the EHR as well as time to train the rest of your staff.  If you cannot adequately free up your staff and switch to additional vendor training, you training costs could be much higher than the train-the–trainer based quote.

Payments - The financial arrangement can be complicated by a number of vendor and practice issues.  In EHR purchases, the product and continuing support costs can be confusing.  Basic EHR license charges can be accompanied by a variety of charges for add on modules, clinical content for your area of medicine, and service subscriptions.  Typical vendor contracts include substantial payments upfront when signing the contract and for delivery of software.  In many cases, you may have paid for the software months before you may even see it on your system.  Payments should be triggered by EHR implementation milestones including training, completion of setup and even EHR Go Live.
Many EHR contracts consist of page after page of terms and conditions that may be difficult to comprehend and manage.  Some major issues to consider include:

Support - Once a vendor has chosen to stop supporting your EHR, you will need to move to another EHR product.  Even if you are willing to use an unsupported product (which is not recommended), you cannot run the risk that you will not be able to get a problem solved or recover your information.  Support should be offered for at least 5 years from the date you start using the EHR and the vendor should provide sufficient notice on stopping support services to allow you to move to another product.

Certified EHR – In the event that you are purchasing an EHR to take advantage of the Stimulus Incentives, you will need to buy a product that is a Certified EHR.  EHR certification is not a one-time event, but a continuing process that may require future enhancements and development.  Meeting continuing EHR Certification standards should be a part of the support responsibilities of the vendor.

Exit Strategy - Although changing EHRs is a difficult process, a number of practice and vendor issues could trigger such a change.  Mergers, acquisitions, changes in business and a number of other events could necessitate a change to your EHR.  Unfortunately, most vendor contracts have a variety of triggers which empower the vendor to terminate your EHR use including copying materials, allowing non-employees to access the EHR, and even moving your office.  In general, your ability to terminate the contract is of limited use since it is so difficult and expensive to move to another EHR.  In order to protect your practice, you need to eliminate or minimize the termination triggers.  Additionally, the agreement should require the vendor to support your move to another EHR and allow sufficient time for the selection and implementation of another product.

Selecting and implementing an EHR is a complex and demanding process which requires a wide range of management and organizational changes.  Such an effort requires a balanced contractual relationship with your vendor that provides your practice with the basis for a results oriented vendor partnership to meet the evolving technology requirements of the healthcare industry.
© Sterling Solutions, 2010

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