Vendor credentialing: Still an issue

There’s a lull in the discussions about vendor credentialing. But how long will it last?

Vendor credentialing isn’t getting quite as much press as it did a year ago, but feelings continue to run deep in the vendor community. What remains to be seen is whether those feelings will bubble to the surface once the BIG issue – healthcare reform – gets resolved.

At press time, the Healthcare Industry Supply Chain Institute, a sister organization of the Health Industry Group Purchasing Association, was awaiting results of an independent study on the costs associated with vendor credentialing. (See “The Vendor Credentialing Tug of War,” February 2010 Journal of Healthcare Contracting.) It is HISCI’s hope that having concrete numbers on the table will stimulate a discussion between providers and suppliers about how to deal with vendor credentialing fairly and economically. “Anyone who has taken one high school economics class learned that the cost of making a product and selling it add up to product price,” says Marty Miller, director, health systems integration, Terumo Medical Corp., who chairs the HISCI committee on vendor credentialing.

Dialogue needed
Discussion between providers and suppliers is exactly what’s needed, says Terry Chang, M.D., director of legal and medical affairs, Advanced Medical Technology Association, or AdvaMed. In March 2009, AdvaMed and a number of other supplier and provider organizations published recommendations for the credentialing of so-called “clinical” reps, that is, those who find themselves in the immediate vicinity of patient care. Participating organizations included the Medical Device Manufacturers Association, the Health Industry Distributors Association, IMDA (the association for specialty distributors), the Health Industry Group Purchasing Association, HISCI, the Health Industry Representatives Association, the American Association of Critical-Care Nurses and the Association of periOperative Registered Nurses.

The recommendations (which can be found on the IMDA Web site at were intended for the Joint Commission, which had announced its intention to develop standards for vendor credentials. But shortly thereafter, Joint Commission discontinued work on such standards, opting to let providers, suppliers and vendor credentialing firms work things out. (Although Joint Commission does not mandate that hospitals credential their vendors, surveyors do ask for proof of vendor credentialing if the hospital has a written policy on the subject.)

Since March 2009, not much has happened. Although some AdvaMed members report that the recommended guidelines have facilitated dialogue with individual providers, “there is a general sense that much of the redundancy and wide degree of variation is still present in the system,” says Chang. “That hasn’t changed to the degree that we would have hoped for, with this type of collaborative effort.”

Indeed, suppliers bemoan the fact that providers have been unable to agree on one set of national credentialing standards, forcing suppliers to register with multiple companies to gain access to different hospitals, incurring multiple costs in the process.

“AdvaMed has a dedicated working group that is very passionate about the issue,” says Chang. “Their focus is not so much retooling, but evaluating how we can move the bar.”

How badly do providers need sales reps?
One of the underlying issues separating suppliers and providers – particularly non-clinical buyers – is the degree to which they value their sales reps. “Ultimately, we’re seeking to preserve the clinical relationship between healthcare industry reps and clinicians that allows for the best delivery of patient care,” says Chang. “We’re open to suggestions as to how to accomplish that.

“To someone who isn’t familiar or doesn’t directly interact with clinicians, it might seem alarming that someone who has a sales title would also be present during a procedure,” he says. But during procedures, technically trained sales reps are “the interactive resource to communicate the nuances and technical details of the device. With many devices having short product life cycles, some measured in months, it’s important to have someone there with that latest information.

“You could argue that it would be possible to internalize that function in an institution,” he continues. “But there’s a lack of efficiency in that. And I don’t think that’s a resource that many community hospitals could afford, that is, having someone on staff to keep up to date on all the pieces with which [clinicians interact].”

What vendors want
Vendors don’t expect an “ideal” solution to vendor credentialing, says Chang. What they would like to see is a balanced approach to it, that is, one that respects providers’ needs and goals, but that also minimizes the administrative hassles that are part of today’s systems, he says. For example, suppliers believe providers should have in place provisions to quickly – if temporarily – grant sales reps access to patient care areas for emergencies. Case in point: A patient shows up in the ER in the middle of the night with an implantable device with which the hospital’s clinicians are not familiar, and the device manufacturer’s sales rep hasn’t been credentialed. Should the rep be allowed access or not? Can the decision be made immediately?

Vendors would also like to ensure that their reps’ privacy is protected, says Chang. They want to know how and where the provider is storing personal information on reps, and how the provider is protecting it from hackers.

AdvaMed hopes that providers and suppliers can “take a step back and look at the problem providers are attempting to resolve, and then work together to find a solution that would be more efficient for everyone, yet ensure the safe and effective use of medical devices.”

One provider’s take
For their part, providers such as West Penn Allegheny Health System in Pittsburgh, Pa., have felt compelled to engage a vendor credentialing firm in order to comply with regulatory requirements imposed on them. Vice President of Corporate Contracting Dave Zimba points out that Joint Commission expects external (non-hospital) people who work in the organization to be knowledgeable about the provider’s policies, adequately trained to perform the service they offer, and knowledgeable about HIPAA and blood-borne-pathogen regulations. West Penn Allegheny’s vendor credentialing firm of choice is ProTech Compliance, a local, minority-owned business.

“When I was first presented with that regulation, I didn’t want anything to do with it,” says Zimba. But the IDN’s employees in the clinical departments started to keep their own binders on the reps calling on them, in case they were asked for documentation from Joint Commission. “That took a lot of time and effort. We really needed a system.” Today, 2,100 vendor reps are registered through ProTech Compliance.

Today, IDN clinicians and clinical directors appreciate the system, but at first, they harbored some resentment toward it. “They didn’t like control mechanisms put in place on their interactions with suppliers,” says Zimba. But now, they see that credentialing has helped control the traffic in their department, he says. “Now, instead of reps just showing up, they’re scheduled. They’re no longer able to talk to doctors as soon as they’re out of the operating room. Doctors don’t like that; they’re in the middle of their game and they don’t need to be disrupted.”

Nor has the system hurt sales reps, says Zimba, reviewing a report that shows how many reps visited the organization in the prior month. “Vendor representatives have a lot of access,” he says. “We’re not trying to govern [West Penn Allegheny employees] or tell them who they can see. But now, all representatives have ID badges, they’re authorized, and that brings better control and organization to the function.”

The void had to be filled
Zimba is well aware that vendors are unhappy with the current state of vendor credentialing. And he has helped take steps to make the process more economical for vendors in western Pennsylvania. West Penn Allegheny and its primary competitor have both contracted with ProTech Compliance to be their vendor-credentialing firm. That means that vendors can register one time with the firm and gain access to a large share of facilities in the western part of the state. Zimba also believes that the prices that vendor credentialing firms charge for their services will drop as the market matures. “In the end, it will still come down to, ‘What is the value proposition?’” he says.

Still, suppliers need to bear at least some of the blame for the current patchwork of vendor credentialing firms, processes and fees that exist in the market today, he says. “The [Joint Commission] regulation was put out there, and nobody appeared to respond.” Vendors failed to recognize the impact that credentialing would have on providers. “So people filled the void. And when that happens, you have multiple systems and multiple processes.

“We are independent healthcare organizations,” he adds, speaking of the hospital industry. “Even though we may have the same general policy, we write them differently.” Had vendors been at the table from the beginning, they might have helped craft the kind of uniform policies they now want.

Vendor registration
In January, vendors calling on West Penn Allegheny got another surprise, when the IDN began requiring that they register with RegComp Inc., a sister company to ProTech Compliance. The primary reason is that West Penn Allegheny from time to time needs to send communications to its vendors, explains Zimba. For example, the IDN might need to notify them about HIPAA updates, business associate agreements or even vendor credentialing. “But many of their addresses are buried in contracts, and many I don’t even have, if [we purchase products through] a GPO contract. My best address is the remittance address, so when I send out notices, they get pitched.”

So the registration gives the IDN easy access to vendors’ contact information, he says. And it works the other way too. Vendors now have easy access to key contact information for West Penn Allegheny employees, as well as information about contracts that are up for renegotiation, the IDN’s vendor policies, etc.

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