In most healthcare systems, contracts dictate daily operations, including what is reimbursed, which supplies are approved, how vendors are held accountable for service levels, and what actions are taken when performance falls short. The problem is that many of those contractual terms still reside in PDFs, rather than being integrated into enterprise systems. According to World Commerce and Contracting, contract-related data is scattered across an average of 24 different systems, making it difficult to track obligations, identify risk, or respond quickly when requirements change. In a margin-constrained environment, that disconnect doesn’t just slow teams down; it increases exposure to noncompliance.
Few industries face more regulatory oversight than healthcare because of providers’ direct involvement with the public sector. Government agencies are not only watchdogs of clinical and commercial practices – they are also major payer partners through Medicare, Medicaid, and other programs, using policy and purchasing power to shape provider operations. The result is constant regulatory churn that must be reflected in contract language and processes. When agreements are disjointed across local drives and disparate systems, it becomes labor-intensive to identify impacted contracts, negotiate updates, and implement new terms consistently across the organization.
Defensible compliance starts with contract intelligence
The stakes are real. In 2024, the U.S. Department of Justice filed a False Claims Act complaint against a Tennessee-based health system, alleging Stark Law violations related to physician compensation arrangements that exceeded fair market value, along with insufficient documentation to substantiate the value and performance of services. Cases like this can expose providers to significant civil penalties and repayment obligations when the underlying documentation and approvals aren’t defensible.
Contracts define who a provider does business with and on what terms. Disjointed systems and weak and inconsistent contracting controls over what is included in those agreements can quickly translate into significant financial and reputational exposure. Even when issues don’t rise to the level of regulatory enforcement, healthcare providers may lose weeks assembling missing documentation to demonstrate compliance during audits. Those burdens compound as health systems merge and consolidate to stay competitive.
Healthcare providers are increasingly turning to AI-powered contract intelligence to close this gap. A modern contract management solution can streamline intake, drafting, and approvals; however, its most critical role in healthcare is strengthening governance by ensuring the right language, documentation, and approvals are consistently captured post-signature.
From audit scramble to audit readiness
Audit readiness, in other words, can’t be treated as an event. It has to be a repeatable contract operations discipline. Contract intelligence helps providers achieve this by transforming compliance from manual document chasing into automated and standardized workflows that provide a single source of truth.
Here are three practical ways contract intelligence can help healthcare providers stay compliant in a highly regulated environment.
- Standardize and centralize contracts. Compliance improves when contracts are centralized and digitized, enabling providers to quickly identify clauses affected by new or changing regulations. Contract intelligence also standardizes templates with pre-approved clauses and fallback language for HIPAA, Stark-related rules, and other regulated terms before signature. The result is greater consistency across facilities and jurisdictions, and fewer deviations that later surface as audit findings.
- Embed governance into workflows. AI-supported workflows route high-risk agreements automatically to the appropriate reviewers, require documented approvals for deviations, and preserve a clear audit trail for defensibility. This makes compliance defensible by design, rather than being dependent on institutional memory or manual oversight – which is increasingly difficult to sustain when teams are stretched.
- Continuously monitor compliance. Staying compliant isn’t only about setting up pre-signature controls. It’s about how agreements are managed over time. Contract intelligence provides ongoing visibility into regulatory obligations, renewal and termination windows, reporting requirements, and clause-level exceptions across thousands of agreements. With automated alerts, providers can address issues proactively – reducing audit scramble, strengthening oversight, and reinforcing trust with regulators, partners, and patients.
For hospitals, compliance isn’t confined to the legal department. It plays out in reimbursement, physician arrangements, vendor performance, and day-to-day operational decisions. As teams are asked to do more with less, the risk isn’t only that a contract contains non-standard clause language. The larger risk is that hospitals cannot consistently and quickly prove that the right terms, approvals, and supporting documents were in place when payers dispute, regulators inquire, or auditors arrive. Contract intelligence makes compliance scalable. In today’s environment, that isn’t a nice-to-have; it’s operational resilience.
Learn more about how Icertis helps healthcare providers mitigate risk and improve compliance with AI-powered contract intelligence here.
The post Charting Audit Readiness: 3 Ways to Reduce Compliance Risk with Contract Intelligence appeared first on Becker's Hospital Review | Healthcare News & Analysis.
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