Provider Credentialing Services: Provider Credentialing Services is the process of review and verification of the information of a health care provider who is interested in participating with a managed care organization (MCO).

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Credentialing
For physicians and office administrators, credentialing is a 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 will provide quality services to their
subscribers. This process of selection and retention is known as credentialing.
Provider Credentialing Services is the process of review and verification of the
information of a health care provider who is interested in participating with a
managed care organization (MCO). Review and 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 liability insurance.
Managed Care Credentialing
The fundamental purpose of Provider Credentialing Services is to 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 all provide several advantages for an MCO. These
advantages, at a minimum, include: risk management, accreditation, immunity
from providers lawsuits under the Health Care Quality Improvement Act and
positive marketing to those seeking to purchase health care policies, consumers,
and potential member providers.
Risk Management
Under the theory of negligent credentialing, MCOs are responsible and can be
held liable for exposing an injured subscriber to an unqualified provider by failing to
conduct a proper credentialing review. They also undertake the risk that
subscribers can look to collect damages when the subscriber is injured due to the
malpractice of a provider deemed later to be unqualified. An MCO that exercises

3. reasonable care in credentialing and monitoring its providers reduces its risk of
liability of a malpractice suit by one of its members.
Accreditation
In its inception, NCQA used to limit its 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 all types of MCOs through its health
care network accreditation program. They also have a specific set of standards
for PPOs and managed Behavioral Health Care Organizations. The AAHCC only
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 is important to many MCOs because the
value of accreditation is looked 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 HMOs to be accredited. Many
health care purchasers require or encourage accreditation before they will sign
on with an insurer.
Immunity Under HCQIA
Another reason for an MCO to implement and perform proper credentialing is to
qualify as a "health care entity" under the Health Care Quality Improvement Act
(HCQIA). Most HMOs qualify as "health care entities" and many PHOs and PPOs may
also meet this definition if they provide health care services.
The immunity conferred by the HCQIA is broad. It protects the MCOs credentialing
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 from any civil rights claims.
Positive Marketing
Credentialing and managed care definitely share a strong relationship. With
effective and thorough credentialing, MCOs are able to prosper and grow. It also
provides several benefits to MCOs, which include a decrease in liability risk for
malpractice and negligent credentialing, strong accreditations, immunities from
physician lawsuits, and positive marketing. While effective credentialing takes time
and effort, most MCOs feel that its benefits clearly outweigh the costs.

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