Licensure, credentialing, and privileging

Published on 07/02/2015 by admin

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Last modified 22/04/2025

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Licensure, credentialing, and privileging

R. Scott Gorman, MD and Carol B. Garrison, CPMSM

Health care organizations—such as hospitals, health plans, and provider networks—must be certain that individuals who provide health care services for their respective organizations are fully qualified, competent, and able to perform those services. This process includes not only evaluating an applicant’s licensure and reviewing credentials, but also granting specific privileges to that provider. The determination of both provider qualifications and competency is essential if a health care organization is to provide safe competent care while avoiding lawsuits, bad publicity, and financial loss.

Licensure is the process whereby a government board or agency reviews a provider’s education, training, background, and any ethical concerns and, if the standards are adequately met, thereafter grants the provider the right to provide health care services within its jurisdiction. The government views licensure as its primary mechanism of protecting the public from substandard care. The requirements for licensure vary from state to state and sometimes include specific education requirements. Additionally, some states require supplemental competency testing if the provider is several years past formal medical training, received his or her medical training outside the United States, or is not board certified.

Credentialing is the process of assessing and verifying the qualifications of a health care provider to obtain appointment to a medical staff or to be approved as a provider in a health plan or health care network. Although many of the requirements for credentialing are similar to those for licensure, each health care organization determines its own criteria and processes. The health care organization may therefore set standards and expectations for quality, safety, and other performance measures that go beyond licensure standards.

Privileging is the process of evaluating the training, experience, and current competency of an individual to perform specific medical services as a part of a medical staff. Privileges are detailed and specific, and providers may only offer medical services in those areas in which they hold privileges. For most requested privileges, the designated individuals within the health care organization will review the provider’s education and training, past clinical performance, malpractice history, and the number of cases performed. An organization’s decision to limit a provider’s privileges can be grounds for legal action by the applicant or require the organization to submit a report to the applicable state or federal regulatory agency and, therefore, must be done with great care and consistency. Today, most health care organizations also employ a process of ongoing concurrent review after the granting of privileges to ensure that competency is maintained.

How health care organizations credential and privilege providers

The specific processes for credentialing and privileging are delineated in a combination of the health care organization’s medical staff bylaws, rules and regulations, and policies and procedures. For legal and regulatory reasons, it is essential that the processes are clearly outlined and precisely followed. Otherwise, the health care organization may have a limited ability to correct or dismiss providers due to inadequate performance.

In most health care organizations, the data collection involved with credentialing and privileging is performed by individuals specifically designated by the organization. These individuals may function solely as credentialing/privileging personnel, or this function may be part of the broader services provided by medical staff services. Following the collection of data, a credentialing or personnel committee or designee reviews the data and makes recommendations to the governing body. In acute care hospitals, the medical executive committee is responsible for forwarding recommendations to the governing body of the health care organization, which is ultimately responsible for the decisions concerning staff membership and clinical privileges.

The information used in licensure, credentialing, and privileging comes from a variety of sources. To decrease the risk that an individual will submit falsified documents for review, licensing boards and health care organizations check information through a process known as primary source verification. This means that verification of an applicant’s education, training, experience, work history, board certification, licensure, malpractice history, and legal background check must be obtained directly from the originating source. Although this process can be time consuming, much of the information is now available on secure Internet sites.

At times questions, concerns, or issues (i.e., “red flags,” such as incomplete or inconsistent information found on the application form) confront those who are reviewing an application. Among the red flags that cause the greatest concern for reviewers are the following:

• Conflicting information between the information provided on the application and the information received in the verification process.

• Unexplained gaps in time. Organizations may determine what time period is considered an acceptable time gap between transitions (e.g., a time gap between training programs or when relocating). Unexplained or extended time gaps are considered a red flag and require additional information.

• Frequent moves from location to location or practice to practice. This situation not only can make competency evaluation for privileging difficult, but may also suggest problems in other areas, such as poor interpersonal skills, health problems, issues with a state licensing board or agency, or excessive malpractice claims.

• Negative references or reference requests that are not returned. References can be a powerful source of information, but because applicants have a tendency to select individuals who will give a positive review, a negative response is particularly important.

• Unanswered questions on the application. Although an omission may be a simple error, it can also signal an effort by the applicant to hide something.

• A large number of liability suits. Recently, the number of lawsuits associated with a provider has become linked to his or her ability to communicate with patients as well as competency.

License renewal, reappointment, and continuation of clinical privileges

No longer is it acceptable for licensing bodies or health care organizations to simply “rubber stamp” a health care provider’s request for licensure renewal, reappointment to a health care organization, or continuation of clinical privileges. Regulators as well as medical staff leaders expect the renewal process to be every bit as rigorous and perhaps more evidence-based than was the initial licensure, appointment, or privileging process. This rigor is supplemented by the data that can be collected on a provider during the previous practice period. Not only can the information collected during initial licensure, appointment, and privileging be reassessed, but new information may now be available. This information may include the following:

Gathering this information can be a complex and sometimes difficult task, but it is necessary if a health care organization is to make the reappraisal process meaningful in terms of patient protection and institution liability.

Perhaps of greatest importance during this reassessment is the ability to more reliably assess providers’ competency to continue to provide the services specified in their initial privileging. This competency is usually assessed through a review of cases performed and success and complication rates and an assessment of competency by peers or the individual’s department chair. To demonstrate an individual’s competency, most health care organizations have established criteria, which may include the number and type of procedures performed. When possible, objective data should be used in this evaluation process because any limitation of privileging may greatly affect the applicant provider’s ability to continue her or his practice of medicine.

Delegated credentialing

Delegated credentialing is the process used when a health care organization outsources or delegates the credentialing responsibility to an outside vendor or credentialing verification organization (CVO) or another health care organization. Often this involves a health insurer or health care network delegating the credentialing to a participating provider group within the health plan or network. The participating provider group or CVO, rather than the health insurer, performs the credentialing process. This process assumes that the participating provider group or CVO is capable of performing the credentialing process and meets the standards set by the delegating organization. Not only does this arrangement obviate the need for the outsourcing organization to perform the detailed work already being done by the provider group or CVO, but it also means less work for the practitioners who would otherwise be burdened with additional, often duplicative, paperwork.

If health care organizations that delegate credentialing are serious about protecting their patients and decreasing their own liability, they must include oversight of the provider group or CVO. The health care organization that delegates credentialing must set standards for the delegated credentialing process that includes a periodic audit of the credentials files and policies and procedures of the provider group or CVO. Review of quality, safety, patient satisfaction or complaints, liability, and other specific data should be included. Only those outsourced provider groups or CVOs that meet these standards are allowed to continue with delegated credentialing status. In most circumstances, the final decision about whether a provider is credentialed by a delegating health care organization rests not with the outsourced group or CVO, but with the health care organization itself.

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