What is Hospital Vendor Credentialing?

Without vendors, hospitals and small healthcare centers will not have the equipment, supplies, and technology needed to deliver patient care. In the vast and intricate healthcare system, vendors are individuals or entities that provide goods and services to medical facilities, ensuring their proper functioning. 

However, before a payment contract is signed between the hospital and its prospective vendor, the hospital management must vet the vendor’s credentials to ensure that they meet the quality and compliance standards set by the government and regulatory authorities. This process is known as hospital vendor credentialing. 

Let’s take a look at the importance, benefits, requirements, and process of vendor credentialing for hospitals to understand how it impacts care delivery throughout the healthcare space. 

What Does Hospital Vendor Credentialing Entail?

Hospital vendor credentialing is a comprehensive and tedious vetting process that involves the verification of third-party vendors’ compliance and qualification certificates and accreditations. Any supplier or contractor that is not a direct part of the hospital but has been hired for the provision of specialized goods and services needs to be credentialed as a safety and quality measure. 

Vendors who are frequently credentialed by the hospitals include:

• Service technicians 
• Nursing staff 
• IT specialists 
• Durable medical equipment (DME) suppliers 
• Pharmaceutical companies  
• Prosthetic and orthotics representatives 

During the hospital vendor credentialing process, the healthcare organization’s administrative staff thoroughly verifies the vendor’s work and education background, drug use history, immunizations, professional licenses, educational certificates, compliance certificates, criminal records, and insurance coverage. 

Importance of Vendor Credentialing for Hospitals

So, why must third-party vendors undergo hospital vendor credentialing? Let’s look at it like this. Would you purchase drugs or medical equipment from an unverified source/supplier if your own life or a loved one’s life was at stake? Will you hire a nurse or a pharmacy worker without inquiring about their qualifications or medical licenses? 

The answer is no because, in healthcare, you are dealing with human lives. You want to make sure that only the best and the most skilled workers are hired for the job and entrusted with patient care. Without a thorough vetting process, you cannot ensure the highest quality and safety standards during care delivery. 

Hence, hospital vendor credentialing is important for:

Avoiding Legal Actions 

Allowing uncredentialed vendors and their representatives inside a hospital and giving them access to resources, databases, and patients can lead to legal infringements. Vendors that have not been checked for adherence to government rules and industry regulations can trigger health and safety concerns, leading to class action lawsuits against the hospital and its management. 

For example, when a hospital allows an uncredentialed DME supplier to provide and furnish non-disposable medical equipment in patient wards, the equipment may turn out to be faulty or low-quality. In such a case, any harm that may come to the patient will result in legal action against the hospital as they failed to credential the vendor.  

Ensuring Operational Efficiency 

Hospital vendor credentialing establishes a system that enhances operational efficiency at the healthcare facility. It ensures that every single person or company linked to the hospital is doing its best to deliver healthcare excellence, whether through direct patient care, technological support, medical equipment, or prescribed drugs. 

Moreover, when vendors are properly documented, and their information is regularly updated, the hospital’s admin staff knows who to contact and how to reach them in case of an emergency, e.g., a cyberattack that may compromise protected health information (PHI). 

Eliminating Supply Interruptions

Hospital vendor credentialing can also clear bottlenecks in the supply chain. Credentialed and contracted suppliers have a duty to send the stock to their partner hospitals first, even if the stock is limited. Moreover, hospital staff can quickly turn to pre-credentialed backup vendors if the primary supplier is unable to deliver goods and services on time. 

Credentialed vendors will try to eliminate all possibilities of supply chain disruptions to maintain their market dominance, certifications, and accreditations. Their reputation matters the most to them and is translated into the quality of goods and services they deliver to the hospital.  

Benefits of Vendor Credentialing for Hospitals

Hospital vendor credentialing, the process of complete checks and balances on third-party vendors, is beneficial for the healthcare organization, its staff, and the patients. The positive impact of this system can be felt on the financial and operational performance of the hospital in terms of increased patient satisfaction, reduced litigation, and improved risk mitigation, as explained below.  

Quality Maintenance

The primary purpose of vendor credentialing for hospitals is to assure the highest standards of quality in the goods and services acquired from contracted vendors. Vendors that cannot meet the set quality standards and do not have ISO certifications to back their claims are eliminated from the credentialed pool. Their applications are immediately rejected. 

Patient Safety 

Substandard goods and services are a threat to patient health and safety. The hospital vendor credentialing process ensures only those individuals or companies are allowed to conduct business with the hospital and be in charge of patient care who have a clean criminal record, authentic educational and work history, and the necessary licenses and registration to prove their credibility. 

Regulatory Compliance 

A vendor that adheres to regulatory compliance has an overall effect on the hospital’s compliance measures and can save it from heavy penalties and fines. For example, a medical equipment and device supplier that follows all the necessary protocols and has passed all the regulatory audits will only provide FDA-approved products to the hospital, thereby ensuring that the hospital meets FDA’s guidelines, too. 

Data Protection 

Hospital vendor credentialing also enhances data protection. Credentialed vendors are usually HIPAA and HITECH-compliant and follow all the necessary procedures to safeguard confidential information. For example, a health IT consultancy that manages the hospital’s EMR and EHR systems will install firewalls and ensure that all files are password-protected and end-to-end encrypted to prevent data breaches and leaks. 

Risk Mitigation  

A hospital could face several kinds of risks. It may face supply shortages, cyberattacks, physician exodus, or revenue leakages, all of which will affect the normal functioning of the hospital. However, the process of hospital vendor credentialing minimizes such risks. You know that a qualified, skilled, government-authorized, and tried-and-tested pool of off-site professionals is ready to become an extension of your team when needed. From trainers and educators to IT specialists and suppliers to pharmacologists, these vendors can meet most kinds of ad-hoc needs. 

Common Hospital Vendor Credentialing Requirements

The hospital vendor credentialing requirements vary from organization to organization and even within facilities that fall under the same management. Every hospital has its own requirements for credentialing vendors, and they may continue to improvise based on the need. However, some prerequisites for vendor credentialing remain common across the board. These include:

• Verifying the vendors’ educational and work history
• Checking the authenticity of their certifications and accreditations
• Ensuring that their licenses are valid and renewed on time
• Confirming their training and professional certifications 
• Obtaining their drug screening results 
• Checking their criminal record (malpractice, frauds, fines, lawsuits, etc.)
• Obtaining their vaccination history
• Checking information on their insurance coverage 
• Compliance checks at federal, state, and local level
• Individuals and companies that wish to undergo hospital vendor credentialing must provide the required documentation with their application form. The entire process could take weeks or months, depending on the criteria that the hospital has set for vendor credentialing. 

Hospital Vendor Credentialing Process

The hospital vendor credentialing process is typically managed in-house. However, due to the rapid expansion in the healthcare landscape, several hospital vendor credentialing companies have come into existence to handle the multi-pronged process meticulously. 

The process generally begins when a vendor expresses interest in a partnership with the hospital. The vendor is asked to complete and submit an online application with soft copies of all the required documents, e.g., certificates, licenses, affiliation letters, etc. The credentialing team reviews the application, verifies the documents, and conducts interviews or site visits to assess the vendor’s credibility. Once satisfied, the hospital’s management invites the vendor to sign a contract. 

The vendor’s complete information is maintained on a cloud-based database (the vendor management system), and updates are requested when personal details or contract status is revised.  

Hospital Vendor Credentialing by State

There are no set rules or regulations for hospital vendor credentialing at the federal or state levels. As we have mentioned, the lack of standardization has compelled every hospital to make its own rules and set up its unique hospital vendor credentialing requirements, further confusing the vendors and complicating the process. 

However, several voices are calling for the states to regulate vendor credentialing. In September this year, the Consortium for Universal Healthcare Credentialing launched a drive to standardize the hospital vendor credentialing process throughout the healthcare space in a bid to reduce interruptions in patient care. But, it is all still a work in progress. 

MediBill MD Vendor Credentialing Services for Hospitals

Don’t let the complications slow you down. If setting up an in-house vendor credentialing unit is keeping you away from your primary responsibility – delivering healthcare excellence to your patients, it is time to outsource hospital vendor credentialing to professionals. 

Hospital vendor credentialing companies, like MediBill MD, efficiently complete the entire process and ensure that only the best of the best are credentialed and onboarded to be your partner in need. 

At MediBill MD, we offer tailored medical credentialing services to hospitals, which include thoroughly vetting the vendor’s profile, verifying their safety, quality, and compliance records, and negotiating favorable contracts to optimize the operational efficiency and financial performance of the facility.