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Employee Credentialing: Medical Practice Liability for Doctors


This week we take a look at this growing area of exposure for medical practices and some basic credentialing-compliance best practices.

A wide variety of medical practice employees, including doctors, nurses, and various clinical assistants, must be very specifically credentialed based on both the specifics of your practice and third-party payer contracts. This week we take a look at this growing area of exposure for medical practices and some basic credentialing compliance best practices.

While I understand the ever-growing list of compliance issues facing American medical practices can be onerous, the good news is that many others have already faced and helped systematize many key issues your practice faces. As with nearly every other practice-related risk we have examined for doctors, addressing this serious issue starts with a few simple steps:

1. Have a specific written plan to determine and verify all the required credentialing compliance of each employee and to keep them in compliance. This applies to both statutory compliance required by law and any compliance you require as a vendor that bills third parties under very specific and financially onerous contractual requirements;

2. Make someone accountable for managing this process and check on that management at least quarterly;

3. Implement appropriate specialty insurance coverage where possible to help protect against any gaps or errors; see our previous articles on RAC Audit insurance and our wider look at medical practice liability insurance essentials.

For busy practice-owning or practice-managing physicians, even the process of determining who must be credentialed can be a daunting process. There are a variety of outside professional resources available to aid in this process generally known as credentialing organizations or which operate under the wider banner of HR and employee background-check services, many of which have accredited certified provider credentialing specialists that interact with your office and staff as outsourced compliance experts.

While this process can be managed internally with the right training and discipline by a variety of existing administrative staff, there is professional help available at nearly every scale, from small practices to hospitals. To my eye, the biggest benefit they offer is that the very best of them go beyond providing a mere snapshot of your current credentialing; they offer a long-range plan to improve and maintain it and help you actually implement it. These organizations also offer several other advantages over doing it internally:


They are typically better equipped to respond quickly to staff changes including on-boarding of new staff or doctors, and help identify and verify the steps to bring any new staff into compliance;

They often use software systems that are more consistent and reliable than the DIY systems implemented by most practices internally, like the typical Excel spreadsheet;

They manage credentialing proactively instead of reactively and can help avoid loss of time, efficiency, and revenue when doctors or staff are taken out of the office to complete massive amounts of CME all at once on a short deadline;

The integration of their software systems is often time and cost efficient in wider areas, like insurance credentialing and can help manage a variety of functions including background check compliance, immunizations and hospital privilege policy compliance, to name just a few.

Whether managed internally or outsourced, the issue of credentialing must be addressed in a reliable way as a top priority as part of your personal and business asset-protection plan. This is just a partial list of the possible bad outcomes of failing to do so:

a. Potential civil and criminal liability for billing third-party payers that contractually require specific credentialed care providers;

b. Loss of revenue due to failure to comply and substantial disruption of practice cash flow if an audit or questions arise. Once an error is identified in one area of your billing practices, expect other areas, even non-related ones with lower compliance burdens, to be examined;

c. Reputational damage, stress, and substantial legal fees easily in the five- or even six-figure range;

d. Significantly increased medical malpractice liability for not providing care at a reasonable standard if a non-credentialed employee is anywhere in the chain of treatment for an aggrieved patient. This gets worth; I’d guess that it’s also a good reason for your liability carriers to exclude an event or reduce applicable coverage.

As always, the key is to act now, while you have time and cost-effective options and before any lapses in coverage are brought to light by a third party. The responsibility and financial jeopardy is ultimately that of the practice owner no matter if the matter is handled internally or not.

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