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Use vendor contracts to draft your EHR project plan

HIM Connection, July 11, 2006

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Use vendor contracts to draft your EHR project plan

When you and your EHR steering committee work with vendors to negotiate contracts-whether a software/services development contract, license agreement, support services agreement, or business associate contract-discuss project planning from the beginning.

If you've already negotiated a contract and didn't touch on the planning aspect of your project, you may want to revisit the agreement because "a well written contract is, in fact, based on negotiations [in which] a great deal of the project planning is discussed," says Richard Marx, JD, founder and president of Patient Command, Inc., an Internet-based medical records company in McLean, VA.

Your negotiations should address

• how to phase-in training as the system is installed
  
• how the new system will change workflow
  
• when deadlines will be met
  
• how the project managers will cooperate and coordinate with the vendor

"If you don't have it in the contract, then the contract isn't ready to be executed," Marx says. Keep in mind that a contract should

• explain parties' responsibilities
  
• identify performance expectations
  
• allocate risks
  
• provide incentives and penalties
  
• supply dispute resolution procedures
  
• create dispute resolution standards
  
• establish legal compliance

If you do cover these bases in your contract, you are ready to organize a solid project plan, says John Christiansen, JD, president of Christiansen IT Law in Seattle. From the list of essential contract elements, you can see that you can develop a timeline in relation to the series of deadlines. Tie this together with your budget so when the vendor achieves a particular phase of the agreement on time, you pay the vendor.

You can even reward the vendor for early performance with more money, suggests Marx. And if the vendor misses a deadline, you could reduce payments according to a schedule-depending on how late that particular deadline is met.

Keep in mind that meeting each subsequent deadline depends on the success of earlier deadlines. Extend later deadlines if there is trouble during the beginning phases of the project.

Editor's Note: This article was adapted from the newsletter Electronic Health Records Briefing.

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