Let's Get Down to Contract Basics
Status and Renewal Types – Basic Facts
Regardless of size or medical specialty, healthcare facilities require certain types of contracts with varying states or "Status", which are assigned by the managing entity, and "Renewal Types" which have been agreed upon contractually. The "Status" of these healthcare contracts is important in order for a viewer to understand the state of the relationship without the need to do research. Agreements also contain contractual renewal terms which need to be adhered to in order to manage expiration date activities. Here's a list of "Status" and "Renewal Types" being used by healthcare organizations in the Healthy Contracts CLM intended to be informational and not exhaustive.
WHY IS STATUS SO IMPORTANT?
The goal of a good contract management solution is to provide users and viewers with the most easily understandable and logical data available. The state of an agreement is more than "Current" or "Expired" and "Archived". Users want to know more and need to have data immediately without going on a hunt to find the right provision to read and interpret.
SHOULD CONTRACT OWNERS CONTROL THE STATUS?
This is a question that must be answered by the system administrator in the healthcare organization using the solution. The Healthy Contracts CLM makes this option available for owners and system administrators alike depending on the process requirements and preferences of the organization.
Active - Evergreen Active - Intial Term
Active - In Review Active - Month to Month
Active - Not Renewable Active - Perpetual
Active - Renewal Term Archived
Expired One-Time Purchase
WHY IS RENEWAL TYPE SO IMPORTANT?
Unlike "Status", the renewal type is agreed upon contractually and must be reflected in the day to day management of the relationship. You should be able to have an infinite list of renewal types based upon the language in your agreements and have the ability to add new renewal types to your database settings. The Healthy Contracts CLM is built to do just that with standardized or custom renewal type nomenclature with the ability to add new types as the need arises.
Auto-Renewal - Initial Term Auto-Renewal - Multi-Year
Auto-Renewal - 1 Year Perpetual
Not Automatic Not Renewable
Written Written - Limited
SHOULD I USE A SOLUTION WITH FLEX "STATUS" AND "RENEWAL TYPE" FEATURES?
Unquestionably, absolutely, 100%, not one bit of doubt YES! The days of being limited by the rigidity of your contract management solution are long gone. The Healthy Contracts CLM was designed and created by healthcare contract geeks just like you and we are available for a demo anytime you like.