What happens when payers and providers interpret contract terms differently? Or revenue cycle teams miss critical details buried in the fine print? Contracts between healthcare providers and payers are supposed to make each party’s responsibilities crystal clear. In reality, that isn’t always the case. Hospitals face costly consequences if they fail to comply with payer policies, yet often struggle to monitor payment accuracy when it comes to being paid on time and in full.
That’s why good contract management matters. Ensuring both parties are reading from the same page protects providers from unmet expectations and revenue loss. As Timothy Daye, Director of Managed Care Contracting at Duke Health Integrated Practice, puts it, “It’s about getting paid correctly per your contracts, so you don’t leave money on the table.”
With increasing pressure to manage costs, hospitals are rethinking how they manage contracts. This article looks at why a more strategic approach – built on contract management software – is essential.
Why hospitals need a contract management system
Medical plans receive around three billion claims each year, according to the latest CAQH index report. At that scale, even small discrepancies in contract terms can have a major financial impact for providers seeking reimbursement. In Experian Health’s 2024 State of Claims survey, 73% of providers said claim denials were increasing, while 77% were seeing more frequent amendments to payer policies. These changes can catch providers off guard, especially when contract terms aren’t clearly documented or regularly updated.
For hospitals, the challenges in managing payer contracts include:
Complex negotiations: Providers handle thousands of contracts with multiple plans and provisions, all subject to changing regulations. Without proper oversight, managing these negotiations can be time-consuming and overwhelming.
Limited data analysis and outdated processes: Effective contract management depends on accurate, up-to-date data. Yet many organizations still rely on poorly defined manual systems that lack the analytics and real-time insights needed to evaluate contract performance, forecast revenue or support strategic decision-making.
Conflicts over claim denials: Underpayments and denials are among providers’ biggest challenges, with payers reportedlyinitially denying 15% of all claims. Disputes over claims, payments, and contract interpretations strain relationships and disrupt revenue cycle performance.
A robust contract management system, using purpose-built software, brings structure to the negotiations and helps build effective and transparent working relationships with payers. Some of the benefits include:
1. More accurate reimbursements and fewer underpayments
Automated oversight of payer contracts makes it easier to find discrepancies between the amounts billed and the rates agreed in payer contracts. Contract management software helps providers avoid missing out on reimbursements because of buried contract clauses and supports contract-based appeals to recover underpayments.
2. Better terms and stronger relationships with payers
Contract management software for hospitals allows revenue teams to evaluate contract results and use that information to assess proposed terms for new contracts. This puts providers on a stronger footing in negotiations and allows them to agree to more favorable terms. More effective communications and quicker dispute resolution also improve provider-payer relationships.
3. Faster, more efficient workflows at scale
Finally, automated workflows combine more accurate data to process claims faster, leading to a more predictable revenue cycle. They also lower administrative costs and allow staff more time to prioritize other patient-facing and revenue-building activities.
Key features of hospital contract management software
Not all solutions offer the automation, data or expert support to make the above benefits a reality. Experian Health’s Contract Manager delivers all three. Here’s how it works:
A team of contract analysts assesses the organization’s contract terms, fee schedules and payment policies to clarify what’s required and when.
Accurate rates and authorization rules are populated automatically to minimize pricing errors and reduce manual effort.
Contract mapping and claim valuation logic reduces the risk of audits and penalties, while automated alerts help providers ensure their contracts comply with current healthcare regulations.
Configurable online dashboards give staff immediate access to reimbursement reports, so they can compare expected and allowed amounts and monitor performance.
Unlike manual systems, contract management software can be easily scaled for organizations of any size. Because it integrates seamlessly with existing hospital information and practice management systems, Contract Manager can audit claims for a medical group or a large health system with one solution. When paired with Contract Analysis, healthcare providers get added negotiating power by getting the data needed to assure terms that optimize reimbursement.
Discover how Experian Health’s Best in KLAS Contract Manager solution helped Boston Children’s Hospital resolve underpayments, work with payers to resolve issues and errors, and more.
Choose the right hospital contract management software
Managing payer agreements may not be the most visible part of the revenue cycle, but its impact is significant. Minor contract discrepancies can quietly erode margins. As providers work to control costs while maintaining care quality, hospital contract management software has become critical in securing fair reimbursement rates and auditing payer contract performance with confidence.
Providers should choose a solution that allows them to verify payment accuracy, resolve disputes faster and prevent lost revenue through unnecessary claim denials. The solution should also deliver real-time visibility into contract compliance and reimbursement trends so revenue cycle teams can stay ahead of policy changes and protect margins.
Experian Health’s Contract Manager and Contract Analysis solution continuously audits payer contract performance and applies current reimbursement rules for Medicare and other payers, for the most precise pricing. It ensures staff have accurate data to hand to conduct contract-based appeals and communicate clearly with payers.
For these reasons, Contract Manager was named Best in KLASin 2025. It’s a proven choice for hospitals seeking to reduce revenue leakage and strengthen payer relationships at scale.
Find out more about how Experian Health’s hospital contract management software helps providers take control of reimbursement and protect their long-term financial health.
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