Dental EHR Contracts: Reach Mutual Agreement

The electronic health records (EHRs) vendor contract is negotiable from beginning to signing. It is important that any practice involved in patient health small, medium, or large understand this. Everything is negotiable. If a vendor is unwilling to work with you, then seek out another that will.

“EHR contracts must include adequate protections, safeguards, and other rights reserved for the customer, in the event that the vendor defaults or otherwise fails to perform to the provider’s satisfaction” (2011).

Many things need to be considered when evaluating potential vendors to select as your EHR supplier before signing the contract. It would do an organization good to seek counsel for legal advice and review.

The license: what type will you choose? There are many to choose from such as shrink-wrap, site, enterprise, and software as a service.  What will the terms of the agreement encompass? This might be perpetual or renewed annually, for example.

The warranties might be hit or miss, but they are a crucial part of the agreement. Failure to establish good warranties could leave a provider without a certified EHR and therefore miss out on the federal incentive.

Limitation of liability and indemnification clauses tend to be tough to negotiate, but don’t leave it out. A failure in this area, such as a breach of privacy and confidentiality could have disastrous effects on the practice, not to mention the federal fines that accompany such a breach. Also, vendors may try to obligate providers to agree to indemnify them especially from third-party claims. This should be avoided since it could adversely affect the providers.

Negotiating a price and payment plan should be weighed carefully. It is recommended that a plan that measures performance milestones be negotiated. This way the vendor is paid incrementally over the course of installation, support services, and maintenance.  Vendor financing is also an option, but be cautious to engage. This could potentially put the provider in a precarious position with the vendor in control.

Should problems arise such as a breach of contract, the customer, and not the vendor, should be able to terminate the agreement. Only under extreme circumstance should the vendor be allowed to terminate the contract. Both vendor and provider can come to mutually negotiated terms and have a successful relationship.

Lessons learned:

  • Everything on an EHR contract is negotiable.
  • Contracts must include adequate protections from installation, breach of HIPAA, and termination, for example.
  • The type and terms of the license need to clearly and specifically spelled out.
  • Create customized contract terms to avoid the vendor’s boilerplate language.
  • Have it written that the contract can be terminated for any vendor failures to comply with applicable laws.
  • Always have warranties. These can protect you from issues such as system problems, software viruses, unauthorized access and meeting meaningful use.
  • Verify the contract provides for indemnification and warranties.
  • Take caution in vendor-financing and tailor contracts accordingly.
  • If a vendor will not work with you, select another.
  • Seek legal advice and review from reputable and knowledgeable professional services.


Fox, S. J. and Schick, V. (2011, March). Gaining contract advantage with EHR vendors. Healthcare Informatics, 28 (3); 53-57.