Clause Verify: Validating Healthcare Vendor Compliance

Healthcare providers must comply with federal and state laws that prohibit doing business with vendors that have engaged in fraud, are unlicensed, or have engaged in other illegal activities. The Social Security Act excludes these vendors from being paid by healthcare organizations and enables the imposition of $10,000 fines for each prohibited item or service furnished.

The U.S. Department of Health and Human Services Office of Inspector General recommends that exclusion checks are performed prior to contracting with a vendor and on at least a monthly basis thereafter.

However, onboarding vendors and continually checking their compliance status is a costly, time-consuming process, and one that is often prone to error. This is why, according to one estimate, Health and Human Services has recently issued over $27 million in civil fines and monetary penalties to more than 250 healthcare organizations.

Collecting and validating even basic vendor information is a pain point for healthcare providers.

A recent survey found that only 60% of healthcare organizations were able to locate Employer Tax Identification Numbers for their vendors. Another industry estimate found that it can easily take nearly 400 hours to onboard a supplier, with a minimum of about forty five hours to capture vendor data and conduct general verification checks.

Why Vendor Onboarding and Management is Such a Problem

Onboarding and properly managing vendors is costly due to poor data governance at healthcare organizations. It results from:

• vendor information being spread across multiple internal ERP, accounts payable, and other systems
• data about vendors constantly changes due to suppliers moving locations, overturn in personnel, and changes in ownership
• inconsistent data about vendor identity and other fundamental information
• inability for data updates to automatically sync across systems

Validating Vendor Data: Prior to Onboarding and On an Ongoing Basis

The Verify solution from Clause can improve compliance and reduce costs from vendor onboarding and management after a contract is signed. Clause is a digital platform that can validate the data in vendor agreements and other documents in real time.

For healthcare organizations, Verify is able to check whether vendors are on an excluded list prior contracting and on a monthly or other ongoing basis afterwards. Verify checks against official systems of record from:

• the OIG List of Excluded Individuals and Entities
• the General Services Administration’s Excluded Parties List System, and
• the 37 states that provide exclusion lists.

Clause Verify also reduces errors in vendor data by checking important data in an onboarding document against systems of record. This data includes:

• company legal name and address
• tax IDs
• bank account details
• data about licenses, permits, and credentials.

As a result, Clause Verify improves vendor compliance and helps to prevent inaccurate or inconsistent data from being entered into a healthcare organization’s systems in the first place. For example, Clause can prevent a document from being signed or approved if data is not first validated for compliance and accuracy.

DocuSign Integration

DocuSign users can easily add Clause’s vendor data validation functionality to their existing procurement workflows, such as using DocuSign for onboarding acknowledgements and approvals and signing a vendor contract.

As shown in the screenshot below, by using Clause Verify a DocuSign workflow can be created to only allow the approval or signature of onboarding documents if data about the vendor is accurate and indicates that doing business with the vendor is permitted.

After the documents are finalized, Clause can continue to periodically check the supplier’s data without requiring manual effort and to prevent inefficiencies.

To learn more about implementing Clause Verify in your healthcare organization contact sales@clause.io.