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California Health Plans to Share Audits of Physician Credentials

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Purchaser-Led Effort Removes Unnecessary Costs from the System

San Francisco, CA, April 8, 2002 - In an effort to reduce the burden placed on medical groups by physician credentialing audits, several of California's largest health plans have agreed to test a standardized tool to do the audits. They have also agreed to share results with each other, so that every plan does not have to audit every group with which it contracts. For medical groups, the result will be less confusion about what steps to take to improve credentialing—and fewer audits.

While costly, physician credentialing safeguards consumers by ensuring that physicians are adequately trained to care for patients; it also looks at complaints, satisfaction and utilization. Health maintenance organizations in California typically delegate credentialing to the medical groups with which they contract, assuming a legal obligation to audit the credentialing annually. The result has been a confusing variety of audit processes and many audits.

"In 2000, four of California's major health plans conducted 777 credentialing audits of 150 medical groups," said Diane Stewart of the Pacific Business Group on Health (PBGH), a health care purchaser coalition. "That's a lot of unnecessary cost that purchasers would like to see taken out of the system, and we appreciate the willingness of the plans to help find a solution."

Stewart manages the Credentialing Oversight project, a public-private partnership sponsored by PBGH and the National Committee for Quality Assurance (NCQA). The project is testing the feasibility of health plans sharing standardized audits at no cost on a secure Web site. Considering that more than 100 of California's largest medical groups contract with at least three of the state's four largest plans, the idea makes sense.

The project team includes six health plans—Aetna, Blue Cross of California, Blue Shield of California, CIGNA, Health Net and PacifiCare—three oversight agencies, six medical groups and NCQA. The agencies are the federal Center for Medicare and Medicaid Services, the Department of Managed Health Care and the Department of Health Services.

On March 4, PacifiCare became the first health plan to share a standardized audit with other plans. In the next two months, PacifiCare will post reports on about 50 medical groups online, where other plans can freely use them in lieu of conducting their own audits. Aetna and Blue Shield will also begin posting audits soon. In the fall, Blue Cross of California, CIGNA and Health Net will also participate in the project.

"Shared audits represent industry collaboration at its best," said Gordon Norman, MD, medical director of PacifiCare. "They enable PacifiCare and other plans to honor their commitment to providing consumers access to the best physicians—but do so with a minimum of intrusion on medical groups. The result is doctors spending more of their time on patient care."

The health plans are using the same audit "tool," an online questionnaire covering both Medicare and commercial credentialing standards. The tool was developed by the Credentialing Oversight team, including representation from NCQA and from the plans and delegated medical groups. It asks whether physicians have been checked for such things as board certification, loss of license or admitting privileges, malpractice history, and drug use. It also monitors the medical group's credentialing process.

With medical group approval, completed audits are posted on the Web site of the Industry Collaborative Effort (ICE). ICE is a collaborative of health plans, providers, employers, and regulatory agencies that seeks to both improve and simplify the regulation of the health care industry. Posted audits can be accessed only by other health plans, using a pass code. Once an audit is posted, any health plan belonging to ICE can access and use the audit during the six-month pilot.

All oversight agencies and NCQA agree that sharing data is acceptable as long as each health plan retains responsibility for which medical groups it delegates credentialing to. The tool is under review by DHS to determine whether it satisfies recently announced changes in Medi-Cal credentialing standards.

Medical groups are likely to welcome the practice of shared audits. One medical group was recently audited four times in a two-week period. On a 100-point scale, its scores ranged from 67 to 96. What's worse, the medical group was left with four different lists of recommended—and sometimes contradictory—improvements.

The Credentialing Oversight project is part the Physician Group Oversight (P-GO) Improvement Project, an ongoing effort to improve the efficiency of physician group oversight in California. P-GO is a partnership of NCQA, the California HealthCare Foundation (CHCF) and the Pacific Business Group on Health. It is supported by a grant from CHCF.

Pacific Business Group on Health (PBGH), a major non-profit coalition of 48 purchasers, is dedicated to improving health care quality and availability while moderating cost. Its members annually spend nearly $4 billion to provide health coverage to approximately 3 million employees, retirees and their families. PBGH seeks to promote health plan and provider accountability and to provide consumers with standardized, comparable data to make the best health care decisions at all levels of care. PBGH also operates PacAdvantage, a small group purchasing pool providing health insurance to 147,000 employees and their families in more than 13,000 small employers in California.

The California HealthCare Foundation, based in Oakland, is an independent philanthropy committed to improving California's health care delivery and financing systems. CHCF's Quality Initiative serves as a catalyst for improving the quality and accountability of health care in California through public reporting of performance measures and advancement of improvement and patient-safety efforts.

Clark Miller
Senior Communications Manager
Pacific Business Group on Health
Telephone: (415) 615–6302
E–mail: This e-mail address is being protected from spambots. You need JavaScript enabled to view it


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