Medical Management -- Credentialing

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This is the eighth article in the Medical Management "Signature Series" by Managed Care Resources, Inc. -- articles on topics in managed care written by experts in the field. The author of this article is Roberta L. Carefoote.

There is no doubt that the National Committee for Quality Assurance (NCQA) sets THE standard for credentialing in managed care. Any search for information on the subject directs the researcher to the expectations set by this formative organization. Defined as the "process by which a managed care organization authorizes, contracts with, or employs practitioners who are licensed to practice independently to provide services to its members", credentialing simply means making sure that a practitioner is qualified to render care to patients. Each managed care organization sets its own qualifications and then structures its processes to ensure that the practitioners meet these qualifications.

This article focuses primarily on the credentialing of physicians within the managed care environment, but it also briefly addresses the credentialing of non-physician practitioners. The information is based on relevant NCQA standards and industry norms; however, it is not intended to supplant those publications produced by the NCQA. The article is intended to provide the reader with an overview of credentialing requirements and the credentialing process, including delegation of some or all of the credentialing activities. It should serve as a starting rather than an end point for someone interested in establishing a credentialing system. For those individuals or organizations interested in learning more, a quick search on the Internet will identify at least ten organizations claiming to assist the MCO with credentialing by supplying data, forms, software, or services capable of tackling all or some of the aspects of the credentialing process.

Each managed care organization (MCO) is responsible for establishing the criteria for participation within the health plan, based on the needs of the members and the standards of the MCO. While there is bound to be some variation on the specific criteria, the basic elements for a physician are likely to include the following:

• Valid and current licensure
• Clinical privileges at a hospital
• Valid Drug Enforcement Agency (DEA) or Controlled Dangerous Substance (CDS) certificate
• Appropriate education & training - i.e., graduation from an approved medical school and completion of an appropriate residency or specialty program.
• Board certification (if specified by the practitioner or required by the MCO)
• Appropriate work history
• Malpractice insurance
• History of liability claims

Regardless of the standards set (e.g. board certified, two years of experience, two million dollars of liability insurance), the MCO must put a system in place that ensures that its practitioners meet these standards before they are accepted as an active provider within the health plan. This system or process is commonly referred to as credentialing.

MCOs are responsible for credentialing all independent practitioners with whom they contract, or employ, including physicians, dentists, chiropractors, and podiatrists. The MCO is not required to credential practitioners who practice exclusively within another organization, such as the inpatient hospital setting, or free standing facilities like mammography centers, urgent care centers, or surgicenters because they are under contract with that organization and have no independent relationship with the MCO.

Non-physician practitioners undergo a credentialing process much like that of physicians. The differences lies in the requirements and therefore in the verification of select data. For example, chiropractors are not board certified and do not require DEA or CDS certificates. CDS certificates are also not applicable for dentists but DEA certificates may be applicable depending on the state in question. For the specific differences among the professional groups and the requirements of each, the reader is directed to the NCQA Surveyor Guidelines, which outline what is required for each type of practitioner and where to access such information.

As for credentialing organizational providers, NCQA is clear about MCO requirements. The MCO is to have policies and procedures that speak to the initial and ongoing assessment of organizational providers with whom it intends to contract, including hospitals, home health agencies, skilled nursing facilities, nursing homes, and free-standing surgical centers. The MCO is expected to confirm that the provider is in good standing with state and federal regulatory bodies, and has been reviewed and approved by an accrediting body. If the provider has not been approved by an accrediting body, the MCO must develop and implement standards of participation. Finally, the MCO must "recredential" the provider at least every three years by confirming that it continues to be in good standing with state and federal regulatory bodies and the appropriate accrediting body.

The credentialing process is just that--a process. It consists of a series of activities or steps designed to lead to a decision to accept or reject an individual's application to participate in the MCO as a health care provider. A simple credentialing process is outlined below:

• Application -- Practitioners expressing an interest in participation with the MCO, and/or practitioners who meet the MCO's organizational needs and administrative requirements, are invited to apply. Each applicant completes an application (credentialing) form, including a signed release granting the MCO access to key information. Each application is accompanied by a copy of the applicant's current, professional license, current, DEA registration if applicable, and the face sheet of the applicant's current professional liability insurance policy. The application for membership also includes a statement by the applicant regarding ...
  • Ability to perform essential functions of the position
  • Illegal drug use
  • Loss of license or felony convictions
  • Loss or limitation of privileges or disciplinary activity
  • Correctness & completeness of the application

• Initial Screening -- Before proceeding with the next step, the application is reviewed to determine that it is complete. If it is complete and meets the basic qualifications set out in a screening policy, it is forwarded to the Chief Medical Officer (CMO). who reviews it to determine if a preliminary interview is warranted, and if the full credentialing process is to be initiated - i.e. verification of credentials through primary sources and new provider site visit.

• New Provider Site Visit -- The applicant is notified that a new provider facility assessment and medical record keeping process audit must take place, which is conducted during the time of primary verification of credentials, and prior to the presentation of the applicant's file to a Credentialing Committee. The site visit includes an assessment of a number of criteria for which the MCO has set out acceptable performance standards including --
  • Physical accessibility
  • Physical appearance
  • Adequacy of waiting and examining room space
  • Availability of appointments
  • Adequacy of medical record keeping - which looks at how the practitioner documents his or her care, how he/she uses the documented information, how the file is organized, and how member confidentiality is maintained.
  • Quality of care - which is determined by examining medical records selected at random and comparing the care provided against MCO standards of care.

• Primary Source Verification -- NCQA stipulates that seven criteria must be verified from the primary source because they identify the legal authority to practice as well as the relevant training and experience. MCOs may choose to use an external agency to collect information from the primary sources. If this is the case, the MCO has delegated this component of the credentialing process and must assume oversight functions. The criteria that require primary source verification include:
  • Valid license to practice
  • Status of clinical privileges at the hospital designated by the practitioner as the primary admitting facility
  • Valid DEA or CES certificate, if applicable
  • Education and training of practitioners - graduation from medical school and completion of a residency
  • Board certification if the practitioner states on the application that he/she is board certified
  • Current adequate malpractice insurance according to the managed care organization's policy
  • History of professional liability claims that resulted in settlements or judgements paid by or on behalf of the practitioner.

• File Preparation -- Immediately following the initial screening, the file is prepared for presentation to a Credentialing Committee. A file is initiated for each applicant that includes --
  • Completed credentialing form
  • Results from the new provider site audit (facility assessment & medical record keeping process)
  • Primary source verification of key elements
  • Work history
  • Information from the National Practitioner Data Bank (NPDB), the relevant State Board of Examiners, and sanction activity by Medicare and Medicaid
  • Any other data relevant to the credentialing of the applicant

• Data Entry -- After all required data elements have been received, the individual practitioner's credentialing file is entered into the MCO's credentialing database and readied for presentation to a Credentialing Committee. A database assists in tracking an application's stage in the process and further assists in ensuring appropriate review of time-sensitive material (e.g. license, DEA certificate, etc.)

• The Decision -- The decision to accept or reject an individual's application is made by a Credentialing Committee. The Committee should be comprised of a range of participating practitioners who are capable of bringing technical knowledge and current medical practices to the attention of the MCO. At a minimum, the Committee reviews the files of all applicants who do not meet the MCO's basic qualifications, and they should review the list and select files of applicants who do meet basic qualifications. The confidential minutes reflect the decisions of the Committee and any relevant discussion pertaining to the decisions. All applicants are notified of the Committee's decision. A description of the appeals process should accompany all decisions not to credential practitioners.

• Recredentialing -- A recredentialing date is set for at least two years after the initial credentialing decision. In considering whether to renew the practitioner's status with the health plan, the MCO reviews information from the following sources --
  • NPDB, State Board of Medical Examiners, and Medicare and Medicaid Programs regarding sanction activity or practice limitations.
  • Member complaints and satisfaction results
  • Quality improvement and utilization management activity reports
  • Medical record reviews and facility site visit results - all primary care physicians, obstetrician/gynecologists, and high volume specialists should have site visits every two years

In addition to the above information sources, the MCO must secure an attestation from the practitioner regarding his/her ability to perform the essential functions of the position, and use of illegal drugs. The MCO must also verify from the primary source the information checked at the time of credentialing.

MCOs can and do delegate all or some aspects of the credentialing process to outside organizations. While it is perfectly acceptable to delegate credentialing activities, the MCO does not relinquish responsibility for this function and must continue to provide oversight. The first step in oversight is to evaluate the delegated entity's ability to perform the activities being delegated. Upon determining that the delegated entity can successful carry out the delegated function, the next step is to create a mutually agreed-upon document that describes the MCO's responsibilities vis-a-vis the delegated entity. The document should articulate the delegated activities, the process by which the MCO will evaluate the delegated entity's performance, and how the MCO will proceed if the delegated entity does not fulfill its obligations. Even with delegation, the MCO retains the right to approve or reject individual practitioners based on quality of care issues. Finally, the MCO must annually evaluate whether the delegated agency is conducting its activities according to the pre-established standards, to determine whether the contract will be renewed.

One of the more commonly delegated activities in credentialing is the primary source verification of select practitioner qualifications. Meeting the demand for this service are organizations known as Credentials Verification Organizations (CVOs), which will verify a practitioner's credentials for a set price. Since 1996, NCQA has been reviewing and certifying CVOs for their compliance with NCQA's Standards for the Certification of CVOs, and with its Credentialing Standards for MCOs. When a CVO is certified by NCQA it means that the MCO is exempt from the due-diligence oversight requirements specified by NCQA for all the verification services for which the organization has been certified. Certification does not guarantee satisfaction with the product or service, but it does offer the MCO protection against scarce resources being spent on activities that cannot meet the rigorous demands of NCQA accreditation. The MCO needs to be cautious in contracting with a CVO--it is possible for a CVO to be certified for some but not all of the ten essential elements specified by NCQA. For those elements where certification has not been achieved, the MCO is responsible for providing oversight.

Credentialing is a necessary and critical first step in securing qualified practitioners to render and manage the care of MCO members. Failure to adopt and use effective policies damages the reputation of managed care and undermines the very principles upon which the industry was founded. More importantly, failing to devote sufficient attention and resources to credentialing means running the risk of providing substandard care to members who put their faith and dollars in MCOs that promise to provide quality care. On the contrary, taking the time to implement effective credentialing policies and procedures demonstrates an MCO's commitment to excellence and to securing only the most qualified practitioners for its members.

For more information on Managed Care and Quality Management please contact us at (630) 325-6543 or by email at info@mcres.com .

We hope that you will join us as we explore all of the elements of medical management in the coming months. In addition, we are offering a "Signature Series" on "Managed Care Contracting". We hope that the two series combined will lessen the mystery of managed care and help level the playing field between providers and payers.

Ira H. Rosenberg

President, Managed Care Resources, Inc.

References:

National Committee for Quality Assurance, 1997 Surveyor Guidelines for the Accreditation of Managed Care Organizations

Related World Wide Web Sites:

National Committee for Quality Assurance (NCQA)

The Managed Care Resources, Inc. team has over 150 years of combined experience in the development and implementation of managed care services. Please visit our home page to learn more about how we can assist you with your managed care needs. We also invite you to contact us with questions or comments.

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