Dental software contract negotiations: How to do it right

Not long ago I was hired by a three-provider medical practice to help them negotiate their electronic health record (EHR) and practice management system contract. I can still hear the tone of the software vendor CEO as he told me that he would love to accommodate us, but he would need to pay his attorney to modify the contract and he couldn't afford to do that for a small, three-provider deal.

Just a few months earlier I had been hired by a large group practice to negotiate its multiclinic contract with the same vendor, and the vendor didn't have any qualms with that client about modifying the contract to meet their requests. I proceeded to tell the vendor I didn't understand why a small practice interested in their product should have less contractual rights than the larger practice I represented, and I made it clear that if the vendor continued to feel this strongly about it, then we would be happy to take our business somewhere else.

Healthcare IT expert Michael Uretz.

Healthcare IT expert Michael Uretz.

In the long run, the vendor did wind up accommodating the contract requests I had for the three-provider practice.

In another instance, I co-chaired a national committee on EHR contracts that comprised both vendors and purchasers. During the meeting, one of the vendors noted that while larger group practices typically engage in contract negotiations, most of the time smaller practices accept the contract they are given, no questions asked.

Whether your practice is small, medium, or large, you have an obligation to avoid executing one-sided vendor contracts. Too often I have seen practices that think they have the chosen the correct software and received a good deal sign on the dotted line without fully reviewing and questioning their contracts. This can be a recipe for trouble after your check is cashed.

You can either take the time to review and question the contract yourself or hire a professional to assist you; either way, getting the right contract that protects all your interests in both the short- and long-term is essential to your future success. Also, be aware that not all medical or dental practice attorneys have the skills to negotiate a dental software or EHR contract, as sometimes this takes very specialized knowledge.

In addition, I believe that it is just plain wrong for any vendor to feel that, in the course of doing business, they are willing to negotiate with a large group but not extend the same courtesy to a small practice. I do understand that a contract for a larger group practice can be more complex than a smaller practice (I have negotiated both types), but this shouldn't dismiss certain basic contractual rights that a small practice should have.

I can't tell you how many times over the last few years that software vendors, when asked to restructure language in their contracts and agreements for small practices I have represented, told me that they have been in business for many years and no one has questioned their contracts before. This is just their way of not wanting to hassle with a practice that is not representing big revenues. If it is true that nobody had questioned their contracts before, then why not be the first? Just because they haven't been questioned about their contracts previously doesn't always mean they are acceptable contracts.

In addition to the software itself, your contracts and agreements can lay out the rules of the road for such important matters as implementation, custom service, and support. Even the sharpest providers and administrators who normally might review and negotiate contracts in their comfort zone tend to leave matters related to IT products and services to their vendors. Remember, vendors have their own interests at heart, just as you do. The only difference is that they are typically the ones structuring the contracts and agreements, and if you don't take control and hold them accountable for what's in those documents, you may have to pay for it down the line.

There are the mechanical aspects of negotiating a contract, and then there are human aspects. Once your practice implements the software you have chosen, most likely you will call on the vendor to work with you on issues that crop up. So you will be somewhat dependent on their willingness to be your partner long term. Prior to purchasing the software, you have many opportunities to see how the vendor might engage you on a personal level in terms of recognizing your needs. Do they get you all information you request on a timely basis? Are they proactive, consistently reaching out to you to see if they can help? Do they listen? Are they willing to engage you in discussions regarding their contracts and agreements and what you need regarding this? Or, do they take the "my way or the highway" approach?

In the long run, it is not just how a vendor's product performs, but how they take care of the practice when things don't necessarily go as planned. The attitude of your vendor and their willingness to engage in reasonable contract negotiations with you can tell a lot about their potential for the long-term partnership you need to be successful with your dental software and dental EHRs.

Mike Uretz is a 30-year software veteran and nationally recognized healthcare software and EHR expert who has consulted with hundreds of practices and multiclinic groups to help them properly evaluate and select their software solutions, structure and negotiate contracts, and provide management and oversight for their implementations. He is the founder and editorial director of DentalSoftwareAdvisor.com. He can be contacted at [email protected].