The document discusses the importance of provider credentialing services for managed care organizations (MCOs), which involve the verification of healthcare providers to ensure they meet the necessary qualifications. Credentialing helps manage risks, achieves accreditation, and provides legal immunity under the Healthcare Quality Improvement Act (HCQIA). Overall, effective credentialing is essential for MCOs to reduce malpractice liability and enhance their reputation in the healthcare industry.

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Credentialing
For physicians and office administrators, credentialingisa necessary iniquity in
order to partake in managed care plans.Managed care organizations such as
health maintenance organizations (HMOs),preferred provider organizations
(PPOs) and physician/hospital organizations (PHOs) must successfully select and
retain qualified health care providers who willprovide quality services to their
subscribers. Thisprocess of selection and retention isknownascredentialing.
Provider Credentialing Services isthe process of review and verification of the
information of a health care provider who isinterested inparticipating with a
managed care organization (MCO). Reviewand verification includes: current
professional license(s), current Drug Enforcement Administration and Controlled
Drug Substance Certificates, verification of education, post-graduate training,
facility staff privileges and levels of liabilityinsurance.
Managed Care Credentialing
The fundamental purpose of Provider Credentialing Services isto ensure that
applicants meet the minimum requirements for a requested status and to
determine whether the application credentials are appropriate for the requested
privileges within the MCO.Laws,regulations, and accreditation standards
increasingly require MCOs to carry out the same level of credentialing that
hospitals have long been required to carry out. Effective credentialing, and fair
hearing and appeal processes allprovide several advantages for an MCO.These
advantages, at a minimum,include: riskmanagement, accreditation, immunity
from providers lawsuitsunder the Health Care Quality Improvement Act and
positive marketing to those seeking to purchase health care policies,consumers,
andpotential member providers.
RiskManagement
Under the theory of negligent credentialing, MCOs are responsible and can be
heldliable for exposing an injuredsubscriber to an unqualifiedprovider by failingto
conduct a proper credentialing review.They also undertake the riskthat
subscribers can lookto collect damages when the subscriber isinjured due to the
malpractice of a provider deemed later to be unqualified. An MCO that exercises

3. reasonable care incredentialingand monitoringitsproviders reduces itsriskof
liabilityof a malpractice suitby one of itsmembers.
Accreditation
Inits inception, NCQAused to limitits accreditation to HMOs,but has recently
expanded to accredit Credentialing Verification Organizations (CVOs), Behavioral
Health Services Texas and Physician Organizations. JCAHO,which started out as a
facility accreditation organization, accredits alltypes of MCOs through its health
care network accreditation program. They also have a specific set of standards
for PPOsand managed Behavioral Health Care Organizations. The AAHCConly
accredits organizations that specialize in carrying out utilization reviews.They
have recently broadened their focus to accredit MCOs.Finally,the smallest
accreditation group, the QMC accredits medical groups and Independent Practice
Associations (IPAs).MCO accreditation isimportant to many MCOs because the
value of accreditation islooked upon as an indication to the public of the MCO
devotion and commitment to the principles of quality and continuous
improvement of services. Some states require HMOsto be accredited. Many
health care purchasers require or encourage accreditation before they willsign
on with aninsurer.
Immunity Under HCQIA
Another reason for an MCO to implement and perform proper credentialing isto
qualify as a "health care entity" under the HealthCare Quality Improvement Act
(HCQIA).Most HMOsqualify as "health care entities" and many PHOsandPPOs may
also meet this definition ifthey provide health careservices.
The immunity conferred by the HCQIAisbroad. Itprotects the MCOscredentialing
committee members, and any other MCO committee members engaging in
credentialing-related activities, including covering committee members with
respect to credentialing decisions. The immunity can help to avoid suits against
an MCO by a physician adversely affected by a credentialing decision, including
suits for defamation and abuse of process. The immunity does not protect a
health care entity fromany civilrights claims.
Positive Marketing
Credentialing and managed care definitely share a strong relationship. With
effective and thorough credentialing, MCOs are able to prosper and grow. Italso
provides several benefits to MCOs,which include a decrease inliabilityriskfor
malpractice and negligent credentialing, strong accreditations, immunitiesfrom
physician lawsuits,and positive marketing. While effective credentialingtakes time
and effort, most MCOsfeel that itsbenefits clearlyoutweigh the costs.

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