NCQA offers managed care ‘seal of approval’ for physician groups

Certification covers quality improvement, utilization

In what could become a managed care "seal of approval" for large group practices, the National Committee for Quality Assurance (NCQA) in Washington, DC, announced a certification program for physician organizations.

For medical groups that are weary of the parade of health plan audits, that means they will have the option to streamline the process with a single survey. Certification also could become a marketing advantage in the highly competitive managed care arena.

These surveys relate to accreditation standards, such as quality improvement, utilization review, and preventive health, that health plans may delegate to physician organizations. The program does not involve medical chart review for Health Employer Data and Information Set (HEDIS) data collection.

Delegation is common in areas where capitation contracts are predominant, such as California and Minnesota. Yet, the certification program is attracting attention from around the country as a way to promote efficiency and reduce the burden of audits, says NCQA spokesman Barry Scholl.

"Physician organizations and health plans alike had been requesting we do something along these lines for quite a while," says Scholl.

Certification is not synonymous with accreditation, as it doesn’t involve an overall assessment of clinical and administrative quality, notes Scholl. Other organizations, such as the Medical Quality Commission in Seal Beach, CA, and the American Medical Association in Chicago offer physician accreditation programs.

Certification will not come cheaply

NCQA certification will be costly for physician groups. The program is primarily designed for organizations of 50 or more physicians.

The NCQA surveys will involve off-site review of documents and an on-site review by a two- or three-person team of physicians and managed care experts that lasts one to three days. Medical groups can receive certification in one or more of six categories. The cost varies according to the size of the practice, but the range is $18,800 to $23,100 for two categories and $24,200 to $31,800 for six categories.

The categories are: quality management and improvement; utilization management; credentialing and recredentialing; preventive health; members’ rights and responsibilities, and medical records.

NCQA will conduct three pilot surveys this summer and release final standards in the fall. NCQA expects to be able to conduct 25 surveys between October and December, Scholl says. Certification will initially last one year; after a second successful survey, that may be extended to three years.

Certified physician organizations will receive a Letter of Certification that they can use to advertise and market themselves to managed care organizations. However, the NCQA is developing specific language that physician organizations must follow in their advertisement.

Certification comes down to two issues for large group practices: controlling your destiny and proving your quality.

When physicians take on capitated contracts to manage the care of a group of patients, they must be able to manage their financial risk, says Richard Dixon, MD, medical director of the National Independent Practice Association (IPA) Coalition in Oakland, CA.

That why practices increasingly take on such traditional health plan functions as claims processing and utilization review, he says. "If the health plan is doing utilization review but paying out of your checking account, it has no incentive to say no," even to services that aren’t covered by the plan, says Dixon.

Even physician groups that have few capitated contracts or aren’t yet at great financial risk should consider the advantages of delegation, Dixon advises. "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. Probably the best time to begin to prepare for that is when it doesn’t matter a lot."

Consider having an open house

To cope with the audits from various health plans, some physician practices arrange an open house, when health plan representatives can review their documentation and facility. Yet those health plans may apply the NCQA standards differently, says Dixon.

"We’ve seen many instances in which two health plans are in on the same day, where one will give a very high score — a 99 — and the other will fail the group," Dixon says. "The lack of standardization about how the health plans perceive their responsibility is very confusing."

Managed care organizations retain oversight responsibility for certified physician organizations, but that won’t entail detailed annual reviews.

"[The NCQA program] cuts down on the burden and, more importantly, it standardizes the process," Dixon says.

[Editor’s note: For more information on the Physician Organization Certification program, contact the NCQA Customer Service Center, 2000 L Street, N.W., Suite 500, Washington, DC 20036. Telephone: (202) 955-5697. For a free copy of the program’s draft standards, call the POC Line at (202) 955-3562 or download them from the NCQA Web site:]