Suppliers optimistic about vendor credentialing

Work in Indiana and Minnesota, as well as The Joint Commission, are cause for hope

There may be a hint of light at the end of the tunnel for vendors wrestling with expensive and duplicative vendor credentialing standards, says Shawn Walker, CEO, Bay State Anesthesia, North Andover, Mass., and past president of IMDA, the specialty distributors association. Speaking at this summer’s annual meeting of IMDA,

Walker cited not only the work of the Indiana Hospital Association, but a recent clarification about credentialing from The Joint Commission, ongoing work by AdvaMed, a proposed set of credentialing standards from a major IDN, and work completed earlier this year by the Minnesota Hospital Association, as reason for optimism.

Suppliers’ dilemma
The problem for suppliers is many-faceted, according to those with whom the Journal of Healthcare Contracting spoke. For one, the cost to vendors of getting their reps credentialed grows along with the number of facilities they call on and the number of vendor credentialing firms with which they have to deal. Second, the requirements of credentialing may vary from hospital to hospital. And third, the criteria for credentialing have multiplied, which presents implications for patient safety.

“The more hospitals ask you to read and sign off on, the less likely the rep is to remember it all,” said Walker. “That can present repercussions.” What’s more, there have been reports of service personnel being denied access to certain areas of the hospital because they lacked credentials.

Several years ago, supplier organizations, including AdvaMed, a trade association for medical products manufacturers, worked with provider groups to try to iron out industry standards, says Walker. But the economic downturn and then healthcare reform forced the issue to the back burner. “But it’s starting to be addressed now,” she adds. (See related article.)

Indiana Hospital Association
Late last year, the Indiana Hospital Association drew up a set of recommended vendor-credentialing guidelines for its members in an effort to gain statewide consistency in their credentialing requirements. (The guidelines may be viewed on IHA’s website at http://www.ihaconnect.org/about/moreinformation/unlockeddocs/d97363.aspx.)

“Representatives of medical device manufacturers approached the IHA with concerns about inconsistency in the policies and practices hospitals require of them,” explains Kathy Wallace, director of performance improvement. Some examples: repeat PPD (tuberculosis skin) tests, duplicative training in life safety code issues and repeat criminal background checks.

“The companies sought a solution whereby they can comply with the necessary medical tests, background checks and training required by the various regulatory bodies, but to do so in a manner in which the requirements will not have to be unnecessarily repeated, and their personal medical and background information will be safely held,” she says. Vendors initially sought a legislative solution to address the situation.

“While the IHA opposed the legislation, we understood their concerns and initiated meetings with them to find a mutually beneficial solution.”

So last year, the IHA assembled a task force consisting of eight hospital CEOs from across the state, representing various sizes of institutions. “Our goals were to provide clear interpretation of regulatory and accrediting body requirements, and provide guidance to hospitals regarding a standard practice for vendor credentialing,” says Wallace. What followed was a series of meetings involving the CEOs, vendor representatives, supply chain executives and risk managers. “At each step along the way, we received input and tweaked our original recommendations.” Consensus was reached, and the Indiana Hospital Association board passed a resolution encouraging facilities to adopt standard guidelines.

“We found common ground much sooner than we both thought might happen,” says Wallace, referring to vendors and hospital representatives. “I think it relates back to our agreement to work as partners and understand each other’s needs.”

No universal passport
The task force did discuss vendors’ desire for a “universal passport,” that is, one set of standards and one pass that could gain them entrance into any hospital. “We understood that requiring individual [sales reps] to undergo multiple tests and/or complete extremely similar requirements for every hospital across the nation just increases the cost of supplies,” says Wallace. “That being said, every organization will have some individual requirements that must be clearly understood and acknowledged by [sales reps] in order to maintain the safety of the patients. This might include something as simple as understanding the emergency codes and exit routes. Maintaining the safety of the patient and those within our facilities is our first concern.”

The guidelines address the following areas:

• Employment verification.
• Liability insurance.
• Criminal background check.
• Immunization.
• Training in bloodborne pathogens and OR protocol (for reps in sterile areas).
• HIPAA training.
• Training in an applicable code of ethics.
• Product training/competency.
• Fire safety training.
• Training in product complaints and medical device reporting requirements.

The association concluded that the following may be omitted from recommended requirements:

• Confidentiality declaration.
• Conflicts-of-interest documentation.
• False claims.
• Gift disclosure form.
• Non-exclusion documentation (OIG).
• Office of Medicaid Inspector General (OMIG).
• Business associates agreement.
• Substance abuse testing.
• Electrical safety training.
• National patient safety goals.
• Professional certification/state licensure.
• Tissue/bone rep FDA registration/approval.

“Overall, the reaction from members has been very positive,” says Wallace. The hospital association has committed to meet jointly with the vendor community on a regular basis to review concerns from both sides. Supply chain executives will be included in those discussions.

Minnesota
While the Indiana Hospital Association was at work on credentialing, so too was the Minnesota Hospital Association. And while the association didn’t issue a ringing endorsement for vendor credentialing standards, its “Vendor Credentialing Report,” published in January, offers hope to vendors willing to read between the lines.

The report had been mandated in 2010 by the state legislature, which called for the hospital association, in conjunction with the Minnesota Credentialing Collaborative, to make recommendations by January 2012 “on the development of standard accreditation methods for vendor services provided within hospitals and clinics.” According to the report’s authors, “This legislation was in response to a legislator’s constituent concern that the vendor credentialing process was overly burdensome and that each hospital had its own unique and different set of requirements.”

As part of its research, the hospital association surveyed its members about credentialing. Of the 84 that responded, 68 percent (primarily larger facilities) reported having a vendor accreditation process in place. Of that 68 percent, 73 percent said they used a national vendor accreditation company, and 26 percent said they had an internally developed process.

Healthcare isn’t alone
The report points out that the healthcare industry is not alone in requiring vendors to be credentialed. “Food processing manufacturers, oil refineries and banking all require a very high level of security and scrutiny before a vendor representative may attempt to sell a product or service,” according to the authors. “[I]t is the hospital administration’s responsibility to manage access to the hospital campus so that everyone is safe and care processes are not disrupted.” Vendor credentialing helps hospitals achieve that goal.

“Credentialing is also a step in managing the supply chain and therefore managing costs for the hospital.”

“There is a need to manage vendor credentialing, communication, and facility access,” says Jim Van Drasek, system director materials management, HealthEast Care System, Saint Paul, Minn., and a member of the work group that helped produce the document. “This is increasingly important as we drive product and contract standardization and corporate value analysis program selection processes to ensure that those decisions are not undermined.

“The vendor management companies can provide an effective service to assist with this. However, it is the organization personnel that must ensure that we have compliance. Staff must identify vendors that are not complying and do not follow our organization’s procedures. They need to take action and communicate situations to Materials Management so that appropriate action can be taken.”

In its report, the Minnesota association encourages hospitals and healthcare systems to post their vendor requirements on their websites. But it is its second recommendation that signals openness to the concept of standardization. “[T]he current work being done at the national level to develop common standards should continue,” conclude the report’s authors. “This work by AdvaMed, providers and others in the health care industry has Minnesota participation and should be encouraged to continue. This national effort could provide a model which would facilitate vendor credentialing standards across state lines.”

The Joint Commission
Another big development in recent months was The Joint Commission’s decision to publish a “Frequently Asked Question” about credentialing on its website this spring. (See http://www.jointcommission.org/standards_information/jcfaqdetails.aspx?StandardsFAQChapterId=66&StandardsFAQId=410.) Several years ago, The Joint Commission had declined to draw up guidelines for vendor credentialing. Meanwhile, some hospitals were under the impression that the organization required them to have a credentialing system in place.

In the FAQ, The Joint Commission states that it does not require credentialing of sales reps (or “health care industry representatives,” which is the term it uses for sales reps.). But it makes clear that its primary concern is the competence of sales reps calling on hospitals, particularly those who have an impact on patient care, or who offer training and guidance on the use of medical devices.

Much of the credentialing being done today on behalf of hospitals and hospital systems addresses such things as adherence to infection control protocols, criminal background, etc., explains Robert Wise, M.D., medical advisor to the Division of Healthcare Quality Evaluation at The Joint Commission. “While these are important issues to anybody coming into a hospital, these areas do not help determine if the rep is qualified to train and advise clinicians on products and procedures.”

To that end, Wise and others at The Joint Commission held discussions with industry associations, including AdvaMed, about how vendors establish the competency of their reps in the field. “As we looked deeper, we verified that the people being sent [into hospitals] are in fact undergoing some type of internal training process,” says Wise. “The problem is, the demonstration of competency is never made by a disinterested third party, only by the party giving the training, that is, the company itself.” Nor at this time did it seem that any independent certification of competency was forthcoming. Given that, hospitals will continue to have difficulty making an independent judgment of the competency of the reps who call on them, he says.

In the FAQ, The Joint Commission cites minimum standards healthcare organizations should address for what it refers to as “non-licensed, non-employee individuals,” including sales reps:

• Ensure that patient rights are respected, including communication, dignity, personal privacy and privacy of health information.
• Obtain informed consent in accordance with organization policy.
• Implement infection control precautions.
• Implement patient safety program.

“Accredited health care organizations may choose to apply other Joint Commission standards and/or more stringent requirements for these individuals as they see fit,” says the FAQ.

Mayo Clinic
While these developments were unfolding, Mayo Clinic was at work drawing up suggested standardized requirements for the credentialing of healthcare industry reps, in hopes that other providers would consider adopting them as well. “We have always taken supplier credentialing very seriously,” says Bruce Mairose, vice chair, supply chain operations, who crafted the guidelines.

More than 10 years ago, the Rochester, Minn.-based IDN worked with pharmaceutical representatives on a similar program. “When supplier credentialing came along for the larger segment of the industry, it was a natural extension of what we needed to do, to ensure we were creating a safe and healthy environment for ourselves and our patients.”

Mairose got involved in the credentialing issue in order to simplify the process within Mayo Clinic, and to try to control credentialing-associated costs for providers and suppliers. “Keep in mind, Mayo Clinic operates across eight states,” he says. “Some are taking it upon themselves to regulate or set up their own rules; others already have unique requirements in place, which can be very complicated for Mayo. It’s important for us to manage a single program,” that is, one that can be applied in all of Mayo’s 130-plus legal entities.

Mayo faces some internal vendor-credentialing-related challenges as well. The infection control department, for example, has slightly different expectations of vendor credentialing than, say, risk management. “My thought was, if we can refine the interpretation of the requirements across our own organization, and [tap into] resources across the industry – such as the American College of Surgeons, The Joint Commission, and the Centers for Disease Control and Prevention – we’d be a lot further along,” says Mairose.

Based on the work of the Indiana Hospital Association, Mayo’s recommended guidelines spell out what the IDN expects of its suppliers in terms of immunizations, training, background checks, etc. In addition, it offers a clear “escalation process” should vendors fail to meet these expectations. “It’s only fair that we make sure suppliers are aware of our expectations,” says Mairose.

The exercise of drawing up recommended guidelines was an education in itself, says Mairose. “We found we were making some of the same errors that many in the industry do.” For example, Mayo, like other IDNs, has at times included clauses in vendor-credentialing agreements that are more appropriately handled in contracts, such as provisions regarding price increases.

Although suppliers may dream of a so-called “universal passport,” which would give them access to any and all healthcare organizations, “there will always be interpretation,” says Mairose. That said, industry guidelines can reduce some of the extreme positions that hospitals and IDNs have taken to manage their risk. In the process, vendor-credentialing costs for the entire industry – providers and suppliers – may be reduced.

Safe and healthy environment
“In terms of the cost to the supplier, I think it’s important our supply partners understand that we’re trying to create a safe and healthy environment for our patients,” says Mairose. “We’re not asking our vendors to do anything that we don’t require our employees to understand, know and do.”

The suggested standardized requirements for healthcare industry representative credentialing recognizes three classes of sales reps, each with its own set of credentialing requirements:

• Level 1 reps: that is, those who do not have access to clinical areas, do not provide technical assistance, do not operate equipment, do not enter patient care areas, and do not provide assistance or consult with patient care staff or clinicians. In general, Level 1 reps are not required to provide any credentials or documentation, though they would be required to wear a name tag and be accompanied by a credentialed representative.
• Level II reps: Those reps with access to the patient care environment excluding sterile or restricted areas. They serve primarily in a technical support role or product and service sales role. They may work in patient care areas where other visitors may be present, or they may provide assistance to or consult with patient care staff.
• Level III reps: These reps have access to the patient care environment, including sterile or restricted areas. They serve primarily in a clinical support or product sales/service role while attending or observing patient procedures.

Some provisions of the suggested standardized guidelines, for Level II and III reps, include:

• Proof of liability insurance. The guidelines call for reps or their employer or principal to provide proof of general liability insurance coverage in the form of either a certificate of insurance or a memorandum, or other written documents confirming the existence of insurance coverage through either a third-party insurer or a self-insurance program.
• Proof of criminal background check. Privacy concerns dictate that these records should be handled and maintained by the employer, says Mairose. Recommended is a letter from the employer attesting that background verification was performed for each representative upon hire and that action would be taken subsequently, if warranted. The scope of the background check should be provided as an attachment. If the rep’s employer does not perform the background check that meets the standard, a background check conducted by a recognized third party, such as a vendor credentialing company, would be acceptable.
• Recommended training credentials include: bloodborne pathogen training, HIPAA training, and product training/competency verifications. In addition, the Level II or III rep should have a letter from the employer verifying that the rep has been trained on policies and procedures consistent with a nationally recognized code of ethics.
• Level II reps would provide proof of tuberculosis testing and immunization against influenza, while Level III reps would provide proof of those as well as immunization against MMR, varicella or chickenpox, tetanus/TDaP, and hepatitis B, or declination.

The following would be excluded from credentialing of general healthcare industry reps, per the recommended guidelines:

• Written acceptance of a confidentiality declaration, conflict-of-interest documentation, or false claims (all of which are contained in the code of conduct, on which reps are trained, or which are better suited for contract terms).
• U.S. Department of Health & Human Services Office of the Inspector General (OIG) non-exclusion documentation (applicable to individuals and entities currently excluded from participation in Medicare, Medicaid and all other federal healthcare programs.) Rationale for this exclusion: This is better suited for a contract term; an attestation by the representative does not eliminate the requirement for the healthcare provider to comply with these regulations. Mayo does its own checks on an ongoing basis.
• Business associate agreement, unless the rep or employer meets the definition of a business associate. Rationale: A rep is not authorized to sign a business associate agreement on behalf of his or her employer.
• Substance abuse testing. Only the National Institute of Drug Abuse five-panel drug screen should be required and only at the time of hire, unless prohibited by law, recommends Mairose. If there is cause for additional drug screening, the rep’s employer is required to follow its drug screening process.
• Electrical safety training. Rationale for exclusion: Reps are not employees of the healthcare organizations upon which they call, and some liability would exist if they were to act.
• Fire safety training. Though general awareness of fire safety is recommended, reps should not be required to train on each healthcare organization’s fire safety protocol, per the recommended guidelines. Rather, they should follow the instructions of the staff.
• National Patient Safety Goals. Rationale for exclusion: These are intended for healthcare professionals, not for sales reps. (On another note, while important to the organization, Mayo does not require representatives to read its strategic plan, says Mairose.)
• Professional certification/state licensure. Rationale for exclusion: This is only relevant for those practicing medicine, and/or it is covered in the definition of “contracted clinical healthcare industry representative,” says Mairose.
• Tissue/bone rep FDA registration/approval. Rationale: This is appropriate for very specific reps only.
• Business- or contract-related terms. These should be negotiated at the time of the business agreement.

“The real inherent value of the recommendations is in creating a critical mass within the industry to implement them,” says Mairose.