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Different Paths, One Destination

September 1, 1998
by Lindsay Smith
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Managed care administrators know that credentialing is the first step in selecting appropriate healthcare professionals for their networks. The real decision is whether to do the work in house or to outsource.

There are no easy solutions for determining the best way to verify healthcare professionals’ background, licensing and schooling. In almost every situation, the best credentialing procedure depends on the organization going through the process. You can perform in-house credentialing with an internally developed database program or off-the-shelf credentialing software. Or you can outsource the entire process to a credentialing verification organization (CVO).

But don’t make your decision in haste. First, consider: whether your organization is staffed to handle credentialing in-house; the advantages and disadvantages to using a CVO; how technology is changing the credentialing process; and how much this decision will cost.

Given that credentialing is a necessity, there’s a lot riding on your decision. But here’s the good news: There may not be a wrong direction. Paths diverge, opinions vary. What’s right for your organization might not be right for another organization.

"Whether you choose to handle any part of a business inside or outsource it, there are two main criteria: quality of the service and expense," observes Scott Simpson, president of First Credentialing Quality Assurance, a credentialing organization in Phoenix. "It’s been my perception that managed care organizations and hospitals are going back and forth. Some of them are working internally and the next year they’re outsourcing. And vice versa."

Just as the National Committee for Quality Assurance (NCQA) has put increasing pressure on managed care organizations to conform to industry standards, this group also has put more demands on CVOs. "Some managed care organizations have experienced problems when they’ve outsourced to a CVO in getting the credentialing done in a timely enough manner to conform to NCQA guidelines," Simpson says. "That’s the main reason, in this market certainly, entities that did outsource have pulled it back inside." A timely manner, according to NCQA, means completing each round of credentialing within a 120-day window.

Simpson believes competition will improve the efficiency of CVOs. "As more CVOs enter into different marketplaces, the competitive forces that will be brought to bear will force them to be more efficient," he says. "That being the case, I think that you will see more outsourcing as the cycle swings back. Once organizations can see the CVOs performing accurately and in a timely manner, there will be more of a movement to outsourcing again."

Scott Stillman, director of marketing for Computer Technology Corp., a software provider in Prairie Village, Kan., also believes that managed care organizations move between in-house credentialing and outsourcing--but for different reasons. "I think a lot of hasty decisions are made as far as outsourcing, and a lot of big managed care players are reevaluating," Stillman says. "A decision made two or three years ago to outsource is now being looked at again and [administrators] are asking, ’What are we paying now for this and what can we do this for in-house?’ I would contend that most CVOs are not as efficient as a well-run managed care organization is in using [software]."

Stillman further points out that data needs continue even after the initial credentialing is completed. "Once all the credentialing has been done, organizations still need to be able to produce directories and reports, keep up on license expirations, malpractice insurance expirations and so many other things that fall outside of what people call credentialing or verifications," he says. "They’ll usually end up with a product like ours anyway."

Technology changes
Technology becomes more and more important as CVOs, managed care organizations and hospitals go about the credentialing process. As Simpson notes, "A CVO cannot charge a lot of money to verify the credentials via primary source verification. It’s not a big-ticket item. In order for CVOs to make money, there’s an increasing reliance on technology."

For example, CVOs can query the National Practitioner Data Bank online and, in more and more cases, can do the same thing with medical, osteopathic and chiropractic boards. "You’ll continue to see more and more of that," Simpson says. "And it’s not just online technology to access the information. There’s a lot of technology being applied to actually managing the information within the CVO itself through credentialing software."

Credentialing software is an area Stillman knows well. "The last few years have seen a lot of things really take off," he says, pointing to Health Care Credentials Online (HCOL) as an example of revolutionary technology that’s aiding his customers. Before Equifax left healthcare, the company created HCOL, which was subsequently sold to MMI in Chicago.

"HCOL has verification data online that we hook up to with our product, so it’s like a CVO in that regard," Stillman says. HCOL has information on all the physicians in the country, including where the physicians went to medical school; whether they are board-certified; and whether they have their drug enforcement agency licenses, state licenses and Medicare/Medicaid sanctions.