Physiatry Practice Management Resources

Recently there has been an upsurge in the number and frequency of inquiries regarding adverse credentialing decisions -- i.e., decisions in which a managed care organization (MCO) disapproves a physician's application to become a part of a panel, or refuses to renew an existing physician's contract and kicks them off a panel. This upsurge can be attributed to a number of factors including the passage of time (resulting in an increased number of reviews), legislative changes mandating periodic credentialing and the influence of supply and demand in the marketplace.

Adverse credentialing decisions can have adverse consequences for both the sender and the recipient. This article addresses adverse credentialing decisions from the perspectives of both the MCO and the physician. From the physician's perspective, we will explore ways to avoid an adverse credentialing decision and what to do if one is received. From the MCO's perspective (and remember: there are physician controlled MCOs!), we will discuss possible pitfalls of decredentialing and how best to limit them.

Most "how to" articles start with an anecdote--this one being no exception: A large, reasonably successful family practice servicing an elderly and indigent population was referred to the credentialing committee of a large MCO for quality reasons. The process started when the medical director arrived at a scheduled site visit to a practice. Upon arrival, he was placed in a cramped, windowless office to await his meeting with the doctor, who arrived nearly half an hour late. Following their meeting, a number of charts were pulled based on billing profiles and related criteria. Documentation was reviewed to assess both quality of care and medical necessity.

The medical director found significant deficiencies in both the documentation as well as the quality of care delivered (which may or may not have been related to the documentation problems). Based on the medical director's findings, the MCO's credentialing committee recommended termination of the physician's contract. Following receipt of notice, the physician requested a hearing.

Upon our review of the charts in question and an interview with the physician it was apparent to us that the MCO had ample grounds to terminate the physician's contract. Since the MCO was a significant source of revenue for the physician, we determined that it would be best for the physician to acknowledge the deficiencies at the hearing and ask for an opportunity to remain on the MCO's panel. We also went armed with a prepared written statement pursuant to which the physician agreed to undertake significant remedial action (including the engagement of an on-site consultant for a period of time) and to waive all further rights of appeal. The MCO agreed to give the physician a year to clean up his act.

Credentialing has always been a fact of life for physicians--hospital staff privileges are just one example. But with the advent of managed care, the process and criteria have taken on increasing importance and complexity. However, following a few simple rules can help the physician navigate these waters with comparative ease, even when the weather gets rough.

Practice good medicine.As hackneyed as this sounds, following this simple rule will address most, if not all credentialing issues. And, in many instances, it is precisely the kind of behavior an MCO is trying to encourage. Under the rubric of practicing good medicine falls proper documentation, adherence to standards of care and the like. When the physician does these things, the potential for an adverse credentialing decision is greatly diminished.

The medical director can be your ally.Most physicians exhibit a visceral reaction to the medical director. On the cynical side, they can make or break a practice by decredentialing the practice's physicians. But medical directors serve an increasingly legitimate role in assuring quality care and keeping costs down. And under managed care, the role of medical director isn't about to go away any time soon. So the medical director should be treated with the dignity and respect that a referring physician would be afforded.

Ask for help.Many MCOs have staff who can provide guidance and advice--for free. Just be very careful about what is disclosed because there is no confidentiality privilege in this relationship (as there would be with a physician/patient or client/attorney). When in doubt, consult counsel.

Don't bluster.When faced with a decredentialing action, a physician's first instinct is to sue. Chances are, though, that the MCO has the law on its side. As long as its credentialing policies and procedures are complete and up-to-date, and are not implemented in an arbitrary fashion, the only beneficiaries of such blustering are the lawyers. The better approach is one of conciliation. If you think termination was arbitrary, seek counsel first, then bluster.

Follow through.If you get caught red-faced, make a commitment to clean up your act and then follow through. It is in everyone's interest that the quality of the care you deliver improve, and if threatened decredentialing is what it takes, so be it.

Decredentialing can have very serious legal and business ramifications for a physician beyond a potential loss of income. It requires a report to the various reporting databanks (including the National Practitioner Data Bank). It can affect hospital staff privileges, malpractice rates and even the outcome of professional liability actions. While the rules outlined above provide general guidelines that will serve most physicians adequately, any physician faced with decredentialing should proceed carefully.

Also, MCOs must follow specific legal guidelines in promulgating and enforcing credentialing criteria. Failure to follow these guidelines gives rise to remedies for physicians that can alter the outcome of a decredentialing action. These are best explored with counsel. Having a lawyer on your team will not intimidate an MCO into changing its course. It will, however, ensure that the MCO is not gaming the system, and that you are being treated as fairly as the rules allow. On the MCO's side of the table, credentialing and decredentialing are double edged swords. One the one hand, credentialing is becoming increasingly important from a business and liability perspective. Among the factors to which MCOs must respond are financial and organizational pressures on MCOs leading to cut-backs of varying degrees among contracting physicians, court decisions finding MCOs liable for acts and omissions of their contracting physicians, pressure on MCOs from consumers for more accountability and better quality of care, and numerous legislative efforts to address abuses (real or perceived) by MCOs.

On the other hand, decredentialing a physician opens an increasingly large can of worms. We are all familiar with the multitude of factors which have led to the creation of highly adversarial relationship between physicians and MCOs. When you layer on top of that the adverse financial impact to physicians who are decredentialed, it's no wonder decredentialing decisions are being fought with increasing frequency and fervor.

The first major stumbling block likely to be encountered by an MCO is the result of an historical accident. Years ago, many physicians were enrolled under significantly looser credentialing standards (a license and malpractice insurance were enough) either because MCOs were attempting to fill panels or because they were apt to rely on the credentialing mechanisms of hospitals. While standards have been substantially tightened since then, they are also inconsistent with standards that were applied on the front-end selection. Such inconsistent application can leave a decredentialed physician feeling angry and bewildered and muttering words like "call my lawyer."