What Is Delegated Credentialing? The Pros and Cons

Credentialing is like a twisted bowl of spaghetti. With so many layers, requirements, and evolving regulations, it’s no wonder thousands of healthcare organizations feel lost in the sauce. While delegated credentialing adds another layer, it might help your healthcare organization get providers credentialed and enrolled more quickly. Yet, you could be left asking yourself, “What is delegated credentialing?”

Delegated Credentialing Explained

As explained by the National Practitioner Data Bank (NPDB), delegated credentialing happens when one healthcare organization authorizes another to carry out the credentialing of its healthcare practitioners. For instance, a Preferred Provider Organization (PPO) may assign this responsibility to a hospital. This process involves more than just verifying credentials; the entity to which the task is delegated, such as the hospital, must assess the qualifications of providers and make credentialing decisions on behalf of the original healthcare entity, like the PPO.

Delegated Credentialing Pros and Cons

Pros: What Are the Benefits of Delegated Credentialing?

Delegated credentialing can be a win-win strategy in many cases. While health plans are backlogged with verifications and enrollments, healthcare organizations want to speed up the credentialing process to get providers in front of patients sooner. Here’s a quick list of the benefits of delegated credentialing for both health plans and organizations.  

Health Plans Benefit From…

• Time and Resource Efficiency: It helps save both time and resources for health plans understaffed or overwhelmed with new enrollments.
• Cost Reduction: Outsourcing credentialing to a delegate can help to cut costs, without having to hire new staff internally.
• Faster Network Participation: It reduces the turnaround time for network participation, allowing more providers to get enrolled sooner.
• Managing Provider Volume: Enables management of a higher volume of providers to support network growth.

Healthcare Organizations Benefit From…

• Quicker Provider Enrollment: It significantly cuts down the time required for provider enrollment, often completing the process in less than two weeks.
• Faster Turnaround for Network Participation: This leads to timelier reimbursements from payers, making financial planning easier.
• Efficient Resource Utilization: Depending on the terms of agreements, practices can reduce the time and resources spent on provider enrollment.
• Enhanced Provider and Patient Satisfaction: New providers can quickly begin their work, directly benefiting patient care and satisfaction.

Cons: What Are the Downsides of Delegated Credentialing?

Any contractual agreement brings expectations and obligations. This means that both parties will be held to a certain standard, or the delegated credentialing contract will be terminated. While not necessarily a con, there is some added pressure in delegated credentialing, shared between health plans and organizations.

Risk of Oversight: The delegating entity, or health plan, might lose some control over the credentialing process. This can lead to potential oversights if the delegated entity does not maintain high standards.

Dependence on Third Parties: Relying on another organization for credentialing creates a dependency, which can be problematic if the delegated entity faces operational challenges.

Monthly Reports: Most payers will require their delegates to submit a credentialing status report, or provider roster, monthly.

Provider Roster Formats Differ: Different payers might have varying standards and formats for credentialing, including the monthly roster reports. This can quickly lead to chaos and confusion if staying organized is not a top priority.

Responsibility of Decisions: As the NPDB states, “Delegated credentialing goes beyond credentials verification, because the delegated health care entity (e.g., the hospital) is responsible for evaluating practitioners’ qualifications and making credentialing decisions on behalf of the delegating health care entity (e.g., the PPO).” WIth this responsibility of credentialing decision, comes increased liability should something go wrong.

NCQA Accreditation Requirements: Most health plans will require delegates to be NCQA compliant, the standard health plans follow for credentialing. Obtaining NCQA accreditation for healthcare organizations takes an investment of time and effort.

Subject To Performance Evaluations: Health plans will evaluate their delegated partners periodically, therefore, all documents must be up to date at all times without any gaps of information. 

NCQA Audits: In addition to evaluations administered by health plans, delegated healthcare organizations must undergo routine audits by the NCQA to ensure the delegate is compliant with state and federal credentialing guidelines.

Tools for Teams With Delegated Credentialing

With the right credentialing software, a delegated team of credentialing specialists inside a healthcare organization can manage their tasks with greater ease. With the responsibility that delegation brings, you want to ensure your team has what they need to stay on top of credentialing. Several tools can help to streamline a delegated credentialing process.

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Credentialing Software: Specialized software for credentialing that houses all provider information in one location for easy status updates.

Automated Exclusions Monitoring: Today’s credentialing software enables credentialers to set up automated exclusions monitoring (OIG-LEIE, SAM, and state-specific), saving time and preventing listed providers from practicing when they shouldn’t.

Organized Enrollment Tracking: If multiple payers have delegated credentialing to you, digital workflows and checklists are vital to ensure you are following the correct process and verifying documents according to the contract.

Digital Tracking and Reporting: It’s too time consuming to use spreadsheets for monthly status reports and rosters. Pre-formatted reports that can be generated in real-time make monthly roster submissions possible.  

Automated Reminders: Post-it notes or manual reminders you have to set yourself will not suffice for delegated credentialing. Use a software that keeps track of deadlines with notifications automatically sent to providers, credentialers, and admins.

Contract Management Systems: Essential for managing agreements between delegating and delegated entities, dates of implementation, responsibilities, and standards.

Weigh Your Credentialing Options

Delegated credentialing presents both opportunities and challenges. You need to weigh these factors against your organization’s specific needs and capabilities. Whether you’re completing delegated credentialing or now, software can help you to simplify what you can without compromising quality. 

See how credentialing software can help in this short video.