The Joint Commission’s contract services requirements have been around for a while. However, survey findings in this area still occur frequently as we saw throughout 2022. So, we thought a brief refresher on this topic might be helpful.

Evaluating Contract Services: A Leadership Requirement

TJC covers requirements for contact services in the Leadership chapter in both the Hospital and Behavioral Health Care and Human Services standards. Specifically, LD.04.03.09 states: “Care, treatment, and services provided through contractual agreement are provided safely and effectively.”

Be aware: This standard applies only to contracts for the provision of care, treatment, and services to patients/clients. It does not apply to contract services not directly related to patient care – for example, grounds maintenance or fire alarm inspections. In addition, it does not apply to contracts for consultation or referral.

So, why the emphasis on leadership oversight of contract services? TJC’s position is that organizations should provide the same quality of care regardless of whether they’re providing the service directly or through contractual agreement. In essence, it’s leadership’s responsibility to ensure they provide these services safely and effectively.

Joint Commission Contract Services: Requirements and Strategies for Compliance

Let’s review the key Joint Commission contract services requirements in LD.04.03.09. In addition, we’ll provide some strategies for complying with those requirements. 

Element of Performance (EP) 1: “Clinical leaders and medical staff have an opportunity to provide advice about the sources of clinical services to be provided through contractual agreement.”

Strategy for Compliance: The best way to show your clinical leaders and medical staff had input on selecting the contractor is to put this topic on the agenda for your leadership and medical staff meetings. Then, document the discussion and decision in your minutes. 

EP 2: “The hospital/organization describes, in writing, the nature and scope of services provided through contractual agreements.”

Strategy for Compliance: Make sure your contracts clearly describe the type and scope of services the contractor will provide. If you have an existing contract that’s vague re the scope of service, you can develop an addendum to the contract that’s more specific. Just make sure the contractor signs the addendum. 

EP 3: “Designated leaders approve contractual agreements.”

Strategy for Compliance: Make sure the contract shows the signature of the individual responsible for signing this contract and also the date. (Surprisingly, we’ve seen contracts in the Document Review Session that had the typed name of the hospital leader who was to be the signatory but no actual signature.)

EP 4: “Leaders monitor contracted services by establishing expectations for the performance of the contracted service.”

Strategy for Compliance: Essentially, this is where “the rubber meets the road” with this standard. You as the contracting entity must develop performance expectations – i.e. performance measures – for the contract service. These can relate to timeliness, accuracy, customer satisfaction or other criteria.  

As an example: A performance measure for a contract lab service could be “XYZ Lab Service will report STAT test results within one hour of receipt of the specimen.” For a contracted art therapist: “Will conduct two art therapy groups per week and document notes for each group according to the documentation guidelines of ABC Behavioral Health Hospital.” 

In addition to specific performance measures, it’s also important to gather information from patients and staff re any problems they’ve encountered with the contract service. For example: “During the past 12 months, have you received any complaints from patients or staff regarding XYZ services? If yes, please explain.” 

EP 5: “Leaders monitor contracted services by communicating the expectations in writing to the provider of the contracted services.”

Strategy for Compliance: The intent here is clear. You as the contracting entity must inform the contractor of the performance measures you’ll be using to evaluate their performance. (By the way, we’ve seen surveyors cite this issue many times in their reports.)

You can do this either by including the performance measures in the contract itself. Or, you can include this as an addendum to the contract. However you choose to do it, you need documentation you’ve communicated this to the contractor. 

EP 6: “Leaders monitor contracted services by evaluating these services in relation to the hospital’s  expectations.” 

Strategy for Compliance: To meet this requirement, you’ll need data showing you’ve evaluated the contract service against the performance measures. So, you’ll need to set up the data collection process and determine what individual or committee will review this data. 

For example, a Medical Staff committee would be the likely group to review data on a contract lab service. For a contracted music therapist, the Clinical Director might be the likely reviewer. 

TJC does not specify the frequency of data collection. However, it’s wise to collect this data throughout the year; quarterly if feasible.  That way, there’s an ongoing real-time picture of how the contractor is performing. 

Keep in mind TJC requires that “leaders” evaluate the contract service. Thus, the governing body should review a report (with accompanying data) on the performance of contract services. We recommend this occur at least annually. 

Meeting this element of performance for the actual evaluation of contract services is the most challenging part of this standard. It’s also the one surveyors cite most frequently. As a result, it’s worth the time and effort to structure your contract evaluation process effectively. 

EP 7: “Leaders take steps to improve contracted services that do not meet expectations.”

Strategy for Compliance: This EP only applies if your contract service is not meeting the performance expectations you set for them. In that case, TJC expects you to take action. Furthermore, they actually spell out a few options: 

• Increase monitoring of the contract service
• Provide consultation or training to the contractor
• Renegotiate the contract terms
• Apply defined penalties
• Terminate the contract

The important take-away here is if the data shows problems with the contractor’s performance, you as the contracting entity need to take action. And you should document that action in minutes, email, or other communication. In short, you don’t want a situation where you’re continuing the services of a contractor who is clearly underperforming. 

Joint Commission Contract Services FAQs

TJC has some helpful FAQs on contract services. Check out the following:

• Contracted Services – Organization’s Responsibilities
• Contract Services – Performance Monitoring of System/Corporate Contracted Services
• Contract Staff – Applicability of Human Resources Standards
• Human Resource Standards – Applicability to Contracted and Volunteer Personnel

Barrins & Associates Consultation

We routinely include a review of contract  services during our Mock Surveys and Continuous Readiness Consultations. As always, we’re prepared to support your ongoing survey readiness and best practices for regulatory compliance.