Economic credentialing

Economic credentialing - issues and answers

Definition
Economic Credentialing is the use of economic criteria unrelated to quality of care or professional competence in determining a physician's qualifications for initial or continuing hospital medical staff membership or privileges. (AMA Policy H-230.975)

History
Current economic trends in healthcare have caused hospitals to base credentialing decisions on the level of a physician's referrals to that hospital. Some hospitals have established "conflict of interest" policies or "loyalty oaths" to ensure that physicians will refer their patients to that hospital or risk losing their hospital privileges. Through these policies or "loyalty oaths", some hospitals have refused to grant staff privileges to physicians who own, have financial interests in or have leadership positions with healthcare entities or refer patients to competing healthcare entities.

AMA action
The AMA opposes the use of economic criteria unrelated to patient care to grant privileges. In December 1999 the AMA asked the Office of Inspector General (OIG) to issue a fraud alert on this emerging practice. The AMA had several conferences with the OIG over the ensuing two years regarding the request and in September 2002 submitted another request for a fraud alert. The AMA met with OIG in November 2002 to develop the solicitation for comments published in the Dec. 9, 2002 Federal Register.

In the December notice, the OIG asked the public to comment on certain credentialing practices including:

1. Whether hospital privileges are "remuneration"?
2. What are the implications of a hospital's denial of privileges to a physician who competes with the hospital?
3. Should the exercise of discretion by the hospital affect the analysis under the anti-kickback statute?
4. Can privileges ever be conditioned on referrals, other than minimums necessary for clinical proficiency?
5. What is the effect of credentialing restrictions that apply only to members of a group practice?

The AMA's September, 2002 request to the OIG and its response to the solicitation for comments can be accessed at:

(PDF files below require Adobe® Reader®)

AMA's Draft Comments to the OIG (PDF, 21KB)

Dec. 9, 2002 Federal Register, 67 FR 72894 (PDF, 43KB)

September 2002, AMA Letter to the OIG (PDF, 20KB)

Strategies

The AMA believes that the practice of conditioning a physician's medical staff privileges on an agreement to refer patients only to that hospital is a violation of the anti-kickback law and that privileges are of "value" and often used by hospitals as an inducement to refer patients to that hospital. Whether called loyalty oaths or conflict of interest policies, the effect is the same. These practices have been implemented in many hospitals across the country and negatively impact a physician's prerogative regarding patient care as well as patient choice.

1. Develop bylaw provisions which clearly articulate membership and privilege criteria, including a provision prohibiting economic credentialing.
2. Medical staff membership and privileges may be granted, continued, modified, or terminated by the Board only upon recommendation of the medical executive committee for reasons directly related to quality of patient care and other provisions of the medical staff bylaws, according to the procedures set forth in these bylaws. Under no circumstances shall economic criteria unrelated to quality of care be used to determine qualification for initial or continuing medical staff membership or privileges. (AMA Physicians Guide to Medical Staff Organization Bylaws, 2nd Edition)
3. Encourage medical staff involvement in the development of medical staff development plans and strategic planning activities.
4. Encourage medical staff involvement in the development of conflict of interest policies.
5. Encourage membership in AMA and the Organized Medical Staff Section (OMSS) and in order to raise awareness of the many issues affecting medical staffs and to utilize the legislative and advocacy activities. Notify the AMA of economic credentialing practices or policies implemented by hospitals.
6. Establishment of a dispute/conflict resolution process in the medical staff bylaws whereby the medical staff and hospital governing body can discuss and resolve issues that affect the medical staff.

The comment period on the OIG's proposal has been closed since early 2002. At this time, the OIG has not issued any final guidelines. The AMA continues to encourage the OIG to act, and closely follows developments.

For further information, contact the OMSS staff office or call the Health Law Division at (312) 464-4631.