Do you have the managed care seal of approval’?

Delegated credentialing doesn’t come cheap

Payers may begin asking for your practice’s managed care seal of approval once the new Physician Organization Certification program of the National Committee for Quality Assurance (NCQA) in Washington, DC, fires up competition in the managed care market.

With costs already cut to the bone, certification promises to become a hot marketing tool for medical groups of more than 50 physicians. The NCQA will certify medical groups in up to six categories that mirror managed care organization accreditation standards:

• quality management and improvement;

• utilization management;

• credentialing and recredentialing;

• preventive health;

• members’ rights and responsibilities;

• medical records.

Managed care organizations that delegate these administrative and clinical functions to physician organizations would not need to conduct annual on-site audits, although they would still retain oversight responsibility. Delegation is most common in capitated contracts, where medical groups take on financial risk and also accept some traditional managed care administrative duties, such as utilization review and physician credentialing.

For medical groups, NCQA certification promises fewer time-consuming reviews of their records and practices.

"It’s going to unburden us dramatically," says Cliff Ossorio, MD, chief medical officer of UniMed, a Burbank, CA-based division of UniHealth, which manages IPAs and medical groups encompassing some 7,500 physicians. UniMed hopes to become one of the first physician organizations to receive NCQA certification.

"It’s going to allow us to have an almost consulting level of support [from surveyors] so we can improve our processes and we can get better at our delegated functions," says Ossorio.

But this accountability doesn’t come cheap. Depending on the size of the practice, the cost of NCQA certification ranges from $18,800 to $23,000 for practices pursuing certification in two categories, to $24,200 to $31,800 for those seeking certification in all six categories.

NCQA was flooded with calls from interested physician groups when it issued the draft standards this spring. Pilot surveys of three physician organizations began this summer, and final standards are expected shortly. The first certification surveys will take place this fall. (For more information on surveys and applications, see box above.)

Why would physician practices want to take on the duties of a managed care organization? Because their money is at risk.

"If the health plan is doing utilization but paying out of your checking account, it has no incentive to say no," explains Richard E. Dixon, MD, medical director of the National IPA Coalition in Oakland, CA, and a member of the NCQA Physician Organization Certification Work Group that helped design the program.

"Every physician group needs to prepare to take on as much delegation as it can," he says. "That is a matter of deciding it’s going to control its own risk and not leave that to someone else."

Delegation has been commonplace in California and other regions of the country with high managed care concentration. Managed care organizations have typically maintained oversight responsibilities, which means they conduct individual, detailed reviews.

To reduce the burden, practices sometimes hold an open house, during which they open their records and invite various health plans to schedule reviews at the same time.

"We’ve seen many instances in which two health plans are in on the same day, where one will give a very high score and the other will fail the group," says Dixon. Both are applying NCQA accreditation standards, but in a different way, he says. "The lack of standardization about how the health plans perceive their responsibility is very confusing."

Under the NCQA program, a team of physicians and managed care experts will conduct on-site surveys spanning one to three days. Initial certification will last one year, and after a second review, certification may be extended to three years.

Certification standards directly parallel the NCQA accreditation standards for managed care organizations. For example, one standard in the category of "members’ rights and responsibilities" requires physician organizations to have written policies and procedures "for the timely resolution of member complaints and appeals."

Ossorio cites "quality improvement" as the most important of the six certification categories because it requires comprehensive assessment and improvement of patient satisfaction, customer service, and clinical issues.

By launching Physician Organization Certification, NCQA is influencing the evolution of the managed care market. Delegation may increase now that the NCQA’s uniform review reduces both the burden and concerns of physician groups and health plans, predicts Dixon.

"It sends a clear message that NCQA recognizes that it is proper and acceptable for medical groups to serve those delegated functions [under managed care contracts]," he says. "That is terribly important for physician organizations."

For medical groups that have worked hard to improve systems and prove their quality, NCQA certification provides another way to show them off. At Physician Specialty Corp., an Atlanta-based physician practice management company, an internal quality improvement committee audits medical charts and conducts facility assessments.

Three health plans have delegated utilization review and quality improvement to the practice management firm. "All of this boils down to one simple fact: Insurance companies need to make sure our patients are being given the best possible care," says Rosemary Matthews, Physician Specialty Corp.’s director of managed care. "If this is one way for it to be done, then I’m for it."