15 steps to negotiating an IT vendor contract

Most hospitals in the U.S. have implemented an EHR, but over time, updates and new systems will be necessary. As the market becomes more complicated, hospital administrators may need legal counsel to help them draw up the best vendor contract.

Dawn Crumel, a partner with Shipman & Goodwin, headquartered in Hartford, Conn., shared tips for negotiating health IT agreements at the American Health Lawyer Association's Physicians and Hospitals Law Institute in Las Vegas. Ms. Crumel, a partner with the firm's health law practice, advises clients on ACOs, population health, health IT and telemedicine, among other medical legal issues.

1. Have IT professionals map out all the organization's health IT assets, its goals for functionality and purchases that will further those goals.
2. Ensure that the legal and IT teams work closely together so there are no miscommunications.
3. Remain cautious of hidden costs in health IT agreements.
4. Clearly outline the individual responsibilities of both the organization and the vendor.
5. Document the process in detail to minimize disputes over any facets of the technical specifications, user manuals, training materials or liabilities.
6. Ensure that the licensing agreement is broad enough to include current uses and future uses.
7. Do not implement the system before acceptance testing, where the system is tested across the spectrum, so the organization is not stuck with a system that does not comply with its documentation.
8. Carefully consider before implementing upgrades or enhancements, which may be offered for "free" from the vendor but cost more than is wise to implement.
9. Decide on a payment schedule, considering payment in installments may ensure a better result in stages of implementation, such as after acceptance testing.
10. Clearly define what downtime means in the contract, both short-term and longer-term, and document the process of capturing downtime to avoid disagreement as to what counts as downtime.
11. Know which standard the software operates on so it will meet interoperability standards and will work with the current technology the organization implements.
12. Be informed on where the data will be stored, whether it is in a data warehouse or in a cloud, especially if the data is breached.
13. Discuss having a vendor perform a self-audit to save the organization time and cost to supervise the vendor's term compliance.
14. Lay out the terms of data acquisition if the contract is terminated, where the data will be transmitted and ensure against the loss of data.
15. Consider negotiating with more than one vendor to give the organization leverage with vendors to reduce cost.

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