Industry insight into FCRA-compliance and its benefits to healthcare organizations.

Transcription

1 White Paper Industry insight into FCRA-compliance and its benefits to healthcare organizations. April 2012 LexisNexis Health Care Credentialing Excellent Certification in License to Practice, Malpractice Claims History, DEA Registration, Medicaid/Medicare Sanctions, Medical Board Sanctions, Work History, and Education and Training Risk Solutions Screening

2 I. Introduction In health care, confirming the credentials of medical professionals is crucial. The faster you do it, the faster you can put them to work treating patients and, ultimately billing for services. Unfortunately, the credentialing process is often slow and cumbersome, involving numerous inquiries, manual phone calls and the occasional back-and-forth with the medical professional being credentialed to clarify any incorrect or inaccurate information. Today, many organizations are opting to outsource this task to specialized providers who can help them: 1) accelerate the process; 2) standardize credentialing workflows; and 3) enhance compliance with industryspecific regulations. Because of the benefits of outsourcing, health care organizations are leveraging outside expertise to move more quickly to onboard staff. When an organization outsources this service, the FCRA (Fair Credit Reporting Act) gulates the collection, dissemination and use of information used in this context. Read more about the FCRA The Federal Trade Commission Website, os/statutes/fcrajump. shtm, contains valuable information for businesses and consumers. It also contains detailed information about the Fair Credit Reporting Act. This document seeks to inform the industry about the FCRA and its implication on health care credentialing, the advantages it provides organizations and medical professionals and the potential impact of non-compliance, along with sample FCRA consents, forms and related documentation. II. The FCRA and its implications on health care credentialing The FCRA is a federal law that regulates how consumer information is collected, distributed and used. When it comes to screening initiatives such as background checks and health care credentialing, organizations should know that the FCRA: Only applies only to background checks conducted by third parties that are in the business of regularly conducting such checks., generally known as consumer reporting agencies (CRAs). Requires disclosure and consent when requesting a consumer report for employment purposes. Applies to screenings performed on job applicants and current employees. Here s a more simplified interpretation: If healthcare credentialing is performed internally by an organization, the FCRA does not apply to the credentialing process. If credentialing is outsourced to a third-party provider known as a CRA (Consumer Reporting Agency) the FCRA is applicable and must be followed. 2

3 Adhering to the FCRA carries minimal cost or burden to the health care organization. And yet they receive the bounty of compliance helping to ensure more accurate data is provided on the right individual for sound and actionable decisions. Leading third-party providers and CRAs are firmly rooted in FCRA-compliant procedures when applied to credentialing. Why organizations prefer an outsourced, FCRA-compliant health care credentialing process Outsourcing Benefit Faster credentialing Process consistency Enhanced health care industry compliance Comprehensive FCRA compliance Outsourcing Feature Leverages a team of dedicated credentialing professionals vs. internal resources with multiple responsibilities Standardizes credentialing workflows for improved, more consistent and accurate results vs. internal processes that change based on workload Easily addresses credentialing standards set forth by: The Joint Commission on the Accreditation of Healthcare Organizations (JCAHO) The National Committee for Quality Assurance (NCQA) Fulfills state and federal laws regarding the use of consumer information by providing guidance, all appropriate disclosures, consents, documentation and adverse action notices required of the employer Competitive Advantage Place professionals faster Service clients more efficiently Quickly bill for services rendered Place professionals faster Service clients more efficiently Quickly bill for services rendered Hire the best talent to deliver superior client services Strengthen and protect brand integrity Hire the best talent to deliver superior client services Strengthen and protect brand integrity 3

4 III. Four simple steps to FCRA compliance Of course you should consult your own legal counsel to ensure compliance wit the FCRA and other applicable law. FCRA compliance for health care credentialing involves four key steps. The process promotes the fair and equitable use of an individual s personal information and provides them with recourse to dispute or correct any incomplete or incorrect information being reported about them by a CRA. Step 1: Providing disclosure and obtaining written consent. Disclosure must be provided to medical professionals in a separate document. However, employers may include a disclosure within a job application package as an added notice. In most jurisdictions, the consent can be phrased so that it applies not only to consumer reports related to the job application, but also to any credentialing reports that might be obtained after commencement of the employment relationship. While there is no requirement that consent language be contained in a separate document, it must be conspicuous. What is a Consumer Reporting Agency (CRA)? An entity that gathers and distributes information about consumers for credit evaluation and certain other purposes, including employment. LexisNexis Screening Solutions is a CRA. Step 2: Communicating certification to the consumer reporting agency. The following information must be communicated to the CRA. This is usually done through the contract process during account set up with that provider. Disclosures and consent have been made and obtained. Pre-adverse action disclosures will be made if required. Additional investigative consumer report disclosures will be made if applicable. Further disclosure concerning investigative consumer reports will be made if requested. Information in the consumer report will not be used in violation of any applicable Federal or state equal employment opportunity law or regulation. Step 3: Provide notice before adverse action. For the purpose of health care credentialing, an adverse action is deemed to have occurred when there has been as a denial of employment or any other decision for employment purposes that adversely affects any current or prospective employee. If adverse information is found in a consumer report, a written notice must be provided to the applicant. The notice must include: Copy of the consumer report. Summary of rights prescribed by the Federal Trade Commission. Statement that adverse action is contemplated. 4

5 Step 4: Provide notice after adverse action. If an organization takes an adverse action based in whole or in part on information contained in a consumer report, it is not required to explain to the medical professional which part of the consumer report influenced the adverse decision. However, a written notice must be provided to the medical professional that includes: Contact information for the CRA.. Statement that the CRA is not the decision-maker. Statement of right to obtain a free copy of the consumer report. Statement of right to dispute consumer report. IV. Potential impact of non-compliance Lawsuits and regulatory enforcement actions are the most tangible consequence of violating any federal and state consumer protection laws, including the FCRA. If settled or lost, the litigation costs, penalties and damages can cost anywhere from hundreds of dollars, to well into the millions, depending on the jurisdiction, the situation and the law(s) violated. In addition, lawsuits divert valuable time and resources away from daily business tasks particularly in small businesses. Other negative effects of non-compliance lawsuits can include: Court injunctions that can impact internal resource allocation by requiring organizational changes to processes and access. Brand degradation, from publicity. Diminished workplace morale, which impacts productivity. Difficulty attracting quality job candidates, due to negative reputation. V. Conclusion Outsourcing the health care credentialing process is a smart strategy that offers measurable benefits starting with increased process efficiency that helps organizations more quickly place health care workers. However, an immense value-added feature is the comprehensive FCRA compliance that accompanies an outsourced process. Leading thirdparty providers can automate practically all aspects of FCRA compliance to provide health care organizations with a multi-dimensional, employee-friendly process that strengthens brand integrity to advance organizations within the broader, highly competitive health care industry. 5

6 For more information: Call (inside the U.S. and Canada) or (outside the U.S. and Canada), or visit lexisnexis.com/screening About LexisNexis Risk Solutions LexisNexis Risk Solutions ( is a leader in providing essential information that helps customers across all industries and government predict, assess and manage risk. Combining cutting-edge technology, unique data and advanced scoring analytics, we provide products and services that address evolving client needs in the risk sector while upholding the high est standards of security and privacy. LexisNexis Risk Solutions is part of Reed Elsevier, a leading publisher and information provider that serves customers in more than 100 countries with more than 30,000 employees worldwide. Our screening solutions assist employers, non-profits and multi-family housing managers with making quicker and more confident applicant selections based on industry-leading background checks and drug testing. Nevada Private Investigator s License Number LexisNexis screening solutions are consumer reporting agency products provided by LexisNexis Screening Solutions Inc. Due to the nature of the origin of public record information, the public records and commercially available data sources used in reports may contain errors. Source data is sometimes reported or entered inaccurately, processed poorly or incorrectly, and is generally not free from defect. This product or service aggregates and reports data, as provided by the public records and commercially available data sources, and is not the source of the data. LexisNexis and the Knowledge Burst logo are registered The trademarks enclosed of information Reed Elsevier is Properties not intended Inc., as used legal under advice license. and should Other not products be interpreted and services or relied may be upon trademarks as such. The or registered legislative trademarks environment of their is constantly respective changing companies. and Copyright you should 2012 consult LexisNexis. your own All rights legal reserved. counsel before NXR taking 0312 any action.