Eight Common Physician Credentialing Mistakes

Charlie Falcone

By Charlie Falcone, CEO, Verisys.

If you find credentialing uninspiring, consider this cautionary tale. In a frequently cited negligent credentialing case, an Illinois jury awarded the plaintiff nearly $8 million dollars when the patient’s foot had to be amputated due to damage caused by the operating physician who had not completed his 12-month podiatric surgical residency and was not board certified.

Although physician credentialing may seem like a tedious administrative task, poor execution can result in serious consequences. Credentialing mistakes lead to financial losses on provider services, delays in claim reimbursements, fines or penalties, exclusion from federally funded programs, and harm to patients. Credentialing lapses can expose a healthcare organization to malpractice suits and accreditation problems. Deviating from best practice credentialing procedures puts organizations at risk for claims of negligence that could allow a lawsuit to move forward.

Best practice physician credentialing is the process in which a practitioner’s credentials are obtained, assessed, and fully verified. The proper credentialing steps can be complex and time-consuming but are a fundamental responsibility of hospitals and healthcare facilities.

To mitigate risk to your organization, avoid these eight common physician credentialing mistakes made by practitioners and the facilities that credential them.

Mistake No. 1: Relying on limited staff and administration.

Physician credentialing, also known as medical or provider credentialing, is a laborious process that requires precision, attention to detail, and patience. All certifications and licenses must be verified for every provider who administers services to patients. Depending on its size, a healthcare organization could be required to verify the employment histories and qualifications of hundreds or even thousands of physicians. This includes each practitioner’s education, medical training, residency, licenses, as well as any certifications issued by a board in the physician’s area of specialty.

Properly credentialing every single individual is an enormous amount of work for a team to handle. Hospitals or health systems may not allocate adequate resources or staff to complete the medical credentialing process, resulting in lost revenue and stressed, overworked staff who are more likely to make mistakes.

Mistake No. 2: Having incomplete physician enrollment applications.

The average physician enrollment application requires an overwhelming amount of information and data. Failing to accurately fill out the application in its entirety causes delays in reimbursement and denial of claims.

Mistake No. 3: Allowing a physician to treat patients before credentialing is completed.

Courts have ruled that hospitals can be held liable when a physician falsifies his credentials. In one of the earliest negligent credentialing cases back in 1981, a Wisconsin jury found the hospital 80% responsible for permanent nerve damage suffered by a patient due to a hip surgery gone awry. Although the surgeon falsely claimed in his application that he had privileges at nearby hospitals, the hospital’s urgency to book cases and its failure to verify credentialing led to accepting responsibility for the majority of damages.

Mistake No. 4: Not updating and verifying information.

Healthcare practitioners need to renew their licenses and credentials on a regular basis, according to the laws of the state in which they practice. Initial credentialing and recredentialing every three years ensure that healthcare physicians are up to date with their board certifications and licenses. When hospitals fail to stay on top of recredentialing, it could lead to physicians and facilities performing services they’re not certified or licensed to perform. This creates the potential for negative patient outcomes, which can lead to expensive malpractice lawsuits.

Mistake No. 5: Covering up prior adverse action.

Failing to disclose an adverse action is a serious oversight by any physician, but it is also the responsibility of a healthcare organization to conduct screenings for prior disciplinary actions with a thorough background check. It’s critical that hospitals and healthcare organizations verify credentials against a wide array of databases such as exclusion, sanctions, and debarment lists. It’s important to use a trusted source that pulls data from primary sources. The Office of Inspector General (OIG) exclusion list is one such source to screen against.

Mistake No. 6: Failing to report adverse actions.

Physicians are required to report adverse actions, such as license revocation; exclusion from third-party programs; and suspension or voluntary relinquishment of medical staff membership, clinical privileges, or state or federal DEA licenses. Hospital and health systems will be held accountable for a physician’s omission. Therefore, due diligence requires background checks to identify both current and historical adverse actions be performed.

Mistake No. 7: Failing to report adverse actions to the National Practitioners Data Bank (NPDB).

Physicians and facilities that fail to report adverse actions to the NPDB withhold critical information needed to complete medical credentialing. The NPDB requires reporting of the following actions:

Mistake No. 8: Failing to take peer review activity seriously.

Information provided in a peer review or investigation should be taken seriously and be evaluated as part of the credentialing process. Peer references can shed light on the capabilities and competencies of a physician that you cannot glean from simply checking her education, training, or license status.

Although physician credentialing may be tedious, the process safeguards healthcare facilities against risk and noncompliance. Thorough and ongoing physician screening is critical to avoid costly negligent credentialing and malpractice claims. Rushing this process leads to missing information, errors, and delays in reimbursement. As healthcare regulations evolve and credentialing requirements become more complex, healthcare facilities must be proactive in updating their credentialing processes to avoid making mistakes that put patients and themselves at risk.

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