Physician credentialing, an obscure yet critical process that serves as the primary safeguard against poor care, is undergoing a high-tech revolution.
A handful of firms called credentials verification organizations are bringing efficiency to the labor-intensive chore by consolidating most of the required data. Tech-nology can expedite physician approvals for managed-care panels and hospital privileges.
For example, HCMS, a subsidiary of Deerfield, Ill.-based MMI Cos., tracks 900,000 allopathic and osteopathic physicians in a database culled from dozens of sources and updated quarterly.
Operating in an office park outside Atlanta, HCMS expects to release verified data on 220,000 physicians for 500 customers nationwide this year.
As of April, 42 credentials verification organizations had been certified by the National Committee for Quality Assurance. They derive most of their revenues from HMOs, which began credentialing in earnest after the NCQA launched its accreditation program in 1993.
Recently, commercial credentials verification organizations have launched products for physician offices, further treading on the territory of the American Medical Association's American Medical Accreditation Program (See story, p. 42).
Now even some hospitals, which have done their own credentials checks for years, are turning to credentials verification organizations. Some 16% reported having done so in a survey conducted one year ago by Chicago-based tax accounting and consulting firm BDO Seidman. Many more are expected to follow suit.
Alternatively, some hospitals and health systems are investing in their own technology and consolidating credentialing departments. A few have created in-house credentials verification organizations.
Such streamlining can free hospital staff to spend more time analyzing credentials, advising medical staff committees and developing privileging criteria, potentially improving their decisions.
But in changing established procedures, hospitals face political and legal hurdles. And while technology speeds data gathering, there is no guarantee that hospitals will improve their analysis or oversight.
Ongoing enterprise. The ability to update data continuously, along with increasing emphasis on tracking outcomes, is making physician oversight an ongoing process. A task force of the Joint Commission on Accreditation of Healthcare Organizations is examining whether its requirement that physicians be recredentialed every two years should be replaced by a system that reflects the trend toward continuous oversight.
Ultimately, a move toward systemwide privileging decisions could require hospital medical staff committees to give up authority over who practices in their facilities.
Many hospitals and systems are conducting managed-care credentialing for their affiliated physician organizations and health plans. Further adding to credentialing volume are physicians who seek privileges at more facilities to expand their managed-care business. With pressure to quickly get physicians onto managed-care panels, the standard hospital wait of three to six months won't do. And the NCQA requires HMO credentialing data to be no more than 120 days old.
VHA, which represents 24% of the nation's community hospitals, last month signed a three-year agreement with Dallas-based Sweetwater Health Enterprises to serve its members at discounted rates.
Sweetwater says it can shorten the credentials verification process to 30 days or less. Checks could be even quicker, but no one has figured out how to check on-line for previous hospital privileges, peer references and liability insurance.
Many VHA hospitals are creating their own HMOs, which requires them to meet credentialing standards of the NCQA as well as the Joint Commission, says Jeff Hayes, VHA's vice president of service development. Credentials verification organizations offer a platform for both.
Sweetwater already claims about 40 hospital customers, many of which own HMOs. "We're finding that hospitals are wanting to either outsource completely or augment their hospital-based credentialing by using our (credentials verification) services," says Sweetwater Chairman Robert French. "They're not giving up any control; they're simply looking for greater efficiencies."
On the cutting edge is San Francisco-based UCSF Stanford Health Care, which is consolidating credentials verification for its four hospitals and two medical groups.
The changes-including the use of a single on-line verification service and a standardized form for physicians-are expected to shave at least 15% from the estimated $500,000 cost of the 2,500 verifications performed annually, says Rachel Deming, the system's director of professional practice services.
UCSF Stanford plans to merge the credentialing staffs of all its facilities and create a "production line" model with experienced staff performing analyses, Deming says.
"We're going to reduce our turnaround time, and we expect to have a higher-quality product because we're focusing the most skilled people on the more-complex tasks," she says.
Hospital reluctance. But in some cases, hospitals are reluctant to give up procedures they've performed for years. That's a barrier to outsourcing and systemwide consolidation.
Art Hernandez, a vice president at Louisville, Ky.-based Aperture Credentialing, says hospitals have continued to verify credentials in-house even after their parent systems designated his firm as a preferred credentials verification organization.
The decision to outsource is not always clear-cut. For one thing, many hospitals have already invested in their own technology.
"Data is going to become cheaper over the long haul, but I think the number of (credentials verification organizations) will start decreasing because of performance and access-to-capital issues," says Wendy Crimp, director of operations consulting in healthcare advisory services for BDO Seidman. "Pricing may not be as competitive a few years from now, and you may wish you had it in-house."
Commercial operators disagree, saying that prices will decrease as credential verification organizations merge and gain economies of scale. Hernandez cites current estimates of $125 to $250 per physician for in-house credentialing vs. outsource charges of up to $125.
Some hospitals have used technology and outsourcing as excuses to cut staff, says Colorado Springs consultant Chris Mobley, immediate past president of the Lombard, Ill.-based National Association Medical Staff Services.
Even if verification is outsourced, someone needs to analyze the data, advise the medical staff and establish credentialing criteria, she says.
Medical staff services professionals "feel very frustrated that administrators don't understand what their role is," Mobley says. "They are problem-solvers. They are resource people. They are educators of the medical staff."
Uniformity. Once health systems consolidate credentials verification, they often consider the ultimate step: uniform privileging.
The issue is more significant for systems with common ownership and governance, says Joanne Hopkins, a partner in the healthcare section of Dallas-based law firm Haynes and Boone.
Many systems "want to go all the way" to centralize not just credentials verification paperwork but privileging decisions as well, she says.
The courts have deferred to hospitals to determine who practices at healthcare facilities. Additionally, the Joint Commission has given hospitals generous leeway in how they verify credentials and determine privileges.
But if a physician has privileges at just one hospital in a system, that creates potential liability for the health system board, which has ultimate approval over all privileging decisions.
At UCSF Stanford, privileging decisions eventually will be made according to systemwide service lines, Deming says.
"It makes a lot of sense to have standardized approaches and standard criteria for what we allow people to do in our institutions. We don't want to set up different levels of care or different levels of expectation," she says.
But uniform privileging is "a very ticklish area," says Lowell Brown, a partner in the Los Angeles office of Milwaukee-based law firm Foley & Lardner.
"One of the biggest problems you face is resolving conflicts when Organization A wants the doctor in and Organization B doesn't. One feels it has a better medical staff and it wants better standards across-the-board," Brown says.
One solution, he says, is to set up "core privileges" that are valid systemwide but can be supplemented with stricter standards for certain facilities.
Unexplored territory. Uniform privileging is so new that many issues haven't been explored. For example, state immunity and confidentiality laws relating to peer review may have to be circumvented to allow hospitals, medical groups and ambulatory surgery centers to share information. Patient confidentiality, which Congress is attempting to protect through pending bills, is another issue.
The payoff is shared knowledge. Brown relates the story of one system whose governing board was asked to approve privileges for a physician who had been ousted for substandard practice by a sister hospital. The hospital requesting the privileges had no knowledge of the physician's problems at the other facility.
Uniform privileging also has the unintended benefit of diminishing the influence of hospital medical staff politics, Brown says. On the other hand, facilities that operate as distinct legal organizations risk violating Joint Commission standards and even antitrust law.
Physicians in a one-system town could have a beef if they are denied privileges.
"Once you start consolidating decisionmaking power and authority, you're raising the stakes," Brown says. "A denial by a group of providers is much more devastating than denial by a single entity."