Adult man read and watch document work at homeWhat role should disability and absence management leaders play during software contract reviews? While some believe this type of responsibility is outside the traditional lane of leave management professionals, this type of subject matter expertise is critical to ensure security compliance, gaps in scope of software functionality, and surprise costs during software implementation.

And contract review starts as soon as an employer has finished due diligence in the selection of case management software. This is a key piece to the process that can influence success or failure, which is why disability and absence managers, who will use the software, are critical contributors. Attorneys and contract specialists, who are normally at the table, may not understand the nuances of the leave management process, and information technology (IT) leaders should not make decisions about system requirements, scope, and configuration of case management software without disability and absence managers in the mix. The employer and vendor legal teams may squabble over something that has no relevance to the primary goal for the software or skip over critical issues related to project scope. It is important for these team members to receive guidance from disability and absence management leaders as they navigate the contract review and negotiation process for documentation software.

Things to Consider Prior to Contract Review and Negotiation

  1. Establish a contract review team: Members may include leaders from these departments: clinical operations, information technology, disability and absence management, finance, and legal counsel. Contracts should not be signed unless they have been reviewed by an experienced attorney. Other team members may include, on an ad hoc basis, information technology security, human resources (HR), procurement, and training.
  2. Develop an orientation to the software for team members who are new to the project: Spending 15-20 minutes to orient team members to the software with a visual presentation will save hours of confusion, questions, and rework. Don’t assume team members understand the difference between case management software and an electronic record. If your system doesn’t do any claims management or billing, emphasize that.
  3. Determine IT security requirements: A review of the security functions of the new software should be conducted prior to contract review. If you don’t have an inhouse security team, you can outsource penetration testing. IT team members need to clearly understand any inputs or interfaces with HR file uploads, portals for employees and managers, and other providers and vendors. A schematic or drawing of inputs as well as outputs will help the IT team.
  4. Establish bottom-line requirements for the vendor relationship: What factors would cause you to walk away from an agreement if you and the software vendor come to an impasse over contract language? While most issues can be resolved, it is important to determine where you need to stand your ground. Vendors will compromise if they want your business.
  5. Clarify implementation costs: These costs are typically paid when the contract is signed. If you are not able to capitalize the implementation costs all at once, some vendors allow you to spread the costs over the initial contract period.
  6. Review the draft scope of work (SOW): This outlines the modules purchased, implementation time frames, user acceptance testing, delivery of training, and support during the go-live period. The SOW may be a contract addendum or a separate document accompanying a service order or purchase order. The vendor should develop a clearly worded SOW. It is critical to review all elements and compare them with what was presented in the sales cycle. The number of clinical and administrative end-users must be accurate and allow for projected growth. Omissions from the scope can be problematic and costly if modules are added after the contract is signed.

Attorneys and contract specialists, who are normally at the table, may not understand the nuances of the leave management process, and information technology leaders should not make decisions about system requirements, scope, and configuration of case management software without disability and absence managers in the mix.

Special Guidance for Disability Management Leaders

Recognizing that the world of leave management is unique, pay special attention to these pieces of the contract.

  • Term and termination: Most contracts have a three-year contract length. Autorenewal is acceptable as long as you understand the notice you must give prior to it. Educate your legal team about the desired relationship. A vendor might see it as a business relationship whereas you see it as a long-term partnership.
  • Sale and acquisition of software vendor: This is the era of smaller software companies merging or being acquired. Outline what terms survive the contract if a company is sold or goes out of business, no matter how the vendor sales team tries to convince you that will never happen.
  • Intellectual property: Many organizations are actively seeking ways to avoid paper. A vendor may help you transform your employee questionnaire, forms, and letters into electronic format. The contract should outline what intellectual property you own. You may be guiding a smaller vendor to customize functions for your organization, which they may incorporate into future releases. Are you prepared to share your workflow with competitors? If not, limit the type of intellectual property the software vendor may share.
  • Availability and downtime: When the system is down, your team will need to document work on paper, which will entail additional documentation time and follow-up scanning or data entry. Excess downtime causes frustration and lowers productivity. Downtime should be no greater than 2%. Your vendor should guarantee the availability, downtime and back it up with performance guarantees. They should pay a penalty if downtime is excessive. Get that guarantee in writing. You will be responsible for developing your own downtime forms and these should mimic electronic data entry to ensure regional and national compliance.
  • User acceptance testing (UAT): Unless you or your team members have significant experience with a software version, you will not have the competence to design scripts for UAT. These scripts include clinical scenarios for entering fictitious data into each module to ensure the data is being captured as intended. Insist that the SOW that the vendor is responsible for furnishing a UAT script for each of your software modules.
  • Training: Will the vendor conduct training or perform train-the-trainer exercises and require your team to conduct training according to your specific configuration? Do you have internal training resources or do you need to hire a consultant to conduct the training? Training resources should be clearly outlined during the contract period.
  • Go-live support: The contract should specify the period when you have go-live support to make configuration changes and corrections to workflows. Many issues are not recognized during UAT and will need attention during the go-live phase. Make sure these timeframes are documented, and you have adequate time to correct problems. If a software vendor offers two weeks of support after go-live, double it and ask for four weeks.
  • Post go-live support: The contract should specify the cost of support after the go-live period to avoid the need to purchase a block of consulting time to fix any outstanding problematic functionality.
  • Governance: The contract can include a governance clause that entails forming a group of leaders from your organization and the software vendor to oversee implementation. This is a good structure if you have a complex implementation at a large number of sites. For less complex implementations, the contract can specify that the governance group convenes on an ad-hoc basis to solve difficult problems as they occur.

Reviewing Standard Contract Terms

Your legal team will have a contract review checklist. Legal and IT security teams will pay special attention to contract sections including term and termination, liability, insurance requirements, and technology errors and omissions. Ensure your IT security team is focused on disaster recovery and system redundancy, physical security, vulnerability management, IT operational performance and resilience, and cyber security. They should report any concerns found during penetration testing, or broader critical infrastructure protection testing. Your teams should share concern with written limitations of which people in the vendor company have access to your organization’s protected health information. All may be interested in the vendor’s system and organization Controls (SOC 1), which is focused on financial reporting.

Special Considerations

Government contracts may require employee background checks that may be out of scope with the software vendor’s HR policy. This issue should be identified and addressed at the beginning of the contract discussion.

Prepare a summary of contract terms and special considerations for senior leaders who will sign the contract. Authorized signers should be knowledgeable about the terms for which they are legally responsible. You can educate them with a simple slide deck.

Some organizations review a contract in one day, which does not provide thorough and adequate review and discussion. Some employers can take up to one year for contract review, which delays implementation. Do not let a vendor coerce you into a short review cycle because of end-of-quarter quotas and pricing deadlines. Take the time you need to meet your individual systems and organizational requirements, and ensure this decision is made prior to vendor negotiations so everyone understands the process and who will be involved.