Special Report: Credentialing

Florida law foreshadows big change in credentialing for hospitals nationwide

Sunshine State mandates standard verification program for all providers

Your credentialing activities may be in for a sea change. Pay attention to what’s happening in Florida, because "the eyes of the nation are upon us," in the words of Lucy Gee at the Florida Department of Health in Tallahassee. "They’re watching to see how we do it. There are a lot of people who wish this had happened a long time ago."

On May 1, Florida’s legislature enacted a statute that mandates a standardized credentials verification program for physicians.1 Credentialing activities have increased significantly in the wake of health care reform, the law points out, and those increases have resulted in a wasteful and cumbersome duplication of credentialing activities among hospitals, medical societies, managed care organizations, and other entities. The statute, effective July 1 this year, is meant to alleviate duplication by providing a system for collection, validation, maintenance, and storage of physicians’ core credential data within the State Department of Health.

Physicians are required to designate which private credentials verification entity (CVE) they want to use. Then they must submit their core credentials data — professional education, peer references, licensure, board certification, institutional affiliations, professional liability insurance, Medicare sanctions, and legal violations — to that company. Florida’s statute mandates that all CVEs perform primary source verification of all credentialing information submitted to them. The department and designated CVEs will thereafter rely upon the accuracy of the data received from each other.

After submission of the data via a standardized application, physicians are responsible for providing corrections or updates within 30 days after any change occurs. If verified by a private CVE, the data are passed on to the Department of Health. Hospitals that employ or contract with the physicians must obtain credentials data on them from their designated CVEs or from the Department of Health. The new statute forbids a hospital from attempting to collect duplicate core credentials data from a practitioner or a primary source if the information is already on file with the Department of Health or with any CVE. The statute shields Florida hospitals from liability for reliance on any data obtained from a CVE.

Sounds reasonable, right? But there’s a rub, and not everyone is in favor of the new legislation. Becky Watson, CMSC, CPCS, president of Florida Association Medical Staff Services (FAMSS) and assistant to the senior vice president and chief medical officer at St. Vincent’s Medical Center in Jacksonville, is one who questions the new statute’s benefit to hospitals.

"For managed care companies, it’s great because it meets their needs," says Watson. "For physicians, it’s wonderful because they fill out one application, submit it to the state, and they’re done at least until their situation changes. A uniform statewide application is a good idea, but what are hospitals going to get out of this?"

FAMSS has worked toward a central repository of practitioner information for four years. But Watson questions the kind of information hospitals are going to obtain from the repository. "Hospitals, too, want to get out of the duplicate credentialing business," says Watson. This is demonstrated by the fact that most health care systems have created central credentialing offices and come up with their own successful methods to reduce duplication. But, she says, hospitals need different types of information from that required by managed care companies, not only because the Joint Commission on Accreditation of Healthcare Organizations in Oakbrook Terrace, IL, requires it, but also to avoid big payouts for negligent credentialing or risk-management issues.

"We credential above Joint Commission standards," says Watson, "and this legislation will not change that process." Managed care companies, governed by National Committee for Quality Assurance (NCQA) guidelines, only have to verify a physician’s highest level of training — if the physician is board-certified, they only verify that. They don’t have to go back to medical school, internship, residency, and so on.

"We verify everything about the physician from the time he or she completes medical school to the present — medical school, internship, residency, all the hospitals he’s had privileges at, and several peer references," says Watson.

But won’t the CVEs be providing all that information when the hospital asks for it? She says the new law does not specify the end result of the verification process. "Until we know what we will be receiving from the private CVE or the Department of Health, hospitals cannot assess how beneficial this law will be for us."

Here’s what could cause a problem for hospitals: Florida’s statute requires that CVEs be nationally accredited. The Catch-22 here is that the Joint Commission does not accredit CVEs, but NCQA and the American Accreditation HealthCare Commission (AAHC), formerly known as URAC, do. CVEs are going to follow NCQA or AAHC requirements for gathering information. CVEs can state that they "are recognized by the Joint Commission," as does Professional Credential Verification Service in East Lansing, MI, but that’s misleading because the Joint Commission doesn’t accredit CVEs, Watson explains.

"If the CVEs are going to follow only NCQA or AAHC credentialing standards," she says, "their data won’t meet the needs of hospitals. According to the new statute, we’re going to have to purchase the data anyway. What we purchase will just be an unnecessary piece of paper to put in the file. Then we’ll still have to credential as we usually do to satisfy Joint Commission standards."

Patrick Reymann, JD, an attorney with Buckingham, Doolittle & Burroughs in Akron, OH, and an expert on credentialing, agrees: "Florida’s new statute may just be adding a step to a hospital’s credentialing process.

"If that is the case," says Watson, "we’ll see our costs for credentialing going up." CVEs charge $100 to $400 per report, depending on the amount of information they validate.

Will Florida’s law affect other states?

How will this affect your job if you live and work outside Florida? "I think other states are going to follow this trend," says Daniel Burton, JD, an attorney with Foley & Lardner, a law firm with offices in Tampa. Florida’s new legislation is not a new idea, he explains. Hospital systems have been internally centralizing their credentialing for years. When a physician has privileges at one hospital within a system, he or she can also practice at another hospital within that system.

"The legislation makes a lot of sense and will save time and money as long as it is judiciously applied. A lot of resources are expended by individual institutions duplicating core information from physicians, and that can be more easily done from a centralized location," claims Burton.

Watson says Florida’s statute will have an impact upon other states even if they don’t follow suit right away. If the database is kept current, as mandated by the law, managed care companies in other states will realize the same benefit as Florida companies if they purchase the data from the private CVE. Hospitals also will have the benefit of the central repository of information, which will expedite their application completion process. But it remains to be seen whether the new verification process will benefit hospitals in other states, just as it remains to be seen in Florida. Reymann advises hospitals outside Florida to beware: They do not enjoy the same liability shield that Florida hospitals do.

Burton points out another factor connected to the new statute. Any time a state becomes a repository for personal records, he says, some fear that the state will use the information for other purposes not contemplated when the legislation was passed. "It may not be the case here, but it’s something that can happen," he says.

Hospital Peer Review asked Watson if any other states have standardized credentialing statutes like Florida’s. She says a few states have voluntary programs. Arkansas’ program is administered through the state licensing board; Hawaii’s is a joint venture between a local insurer and three major hospitals; Alaska’s is run through the state’s Medical Staff Services and credentials the majority of physicians in Alaska.

Reference

1. Florida 1998 House Bill No. 4515; 455.557.