Managing a hospital’s supply chain involves a whole lot more than ordering supplies. It encompasses managing the relationship with every entity that sells to you or has a material influence on your organization.
Several years ago, the definition of a vendor changed. It now includes salespeople and every person or company that has both direct and indirect contact with the patient population. This means that your organization is responsible for both the health and financial consequences every time a person walks into your facility to provide a service: from telling your providers about the latest medicine, to performing maintenance work on your computer infrastructure, to collaborating with leadership about hospital expansion. In order to ensure the safety of their constituents, quality of care, and financial health, most facilities require that all such vendors be credentialed.
Several years ago, the definition of a vendor changed. It now includes salespeople and every person or company that has both direct and indirect contact with the patient population.
Vendor credentialing is time-consuming and must continually be performed to make sure an individual or company’s status remains compliant with their requirements – which increases the administrative burden of conducting the proper checks. Unfortunately, many facilities think they are in compliance with credentialing because they depend on the integrity of their vendors’ employers to do things like check the Office of Inspector General (OIG) List of Excluded Individuals and Entities (LEIE) for healthcare exclusions (monthly) and confirm that current employees have required vaccinations. The price of that assumption can be very high.
For example, in 2016 a hospital in Exeter, New Hampshire, reached a settlement with a staffing agency that failed to warn them of a vendor representative that caused a hepatitis C outbreak. A contributing factor to the access the individual had to patients was that, without temporary staff credentialing requirements, the employee was placed in his role despite being terminated from a previous role for a failed drug test. In addition, his certifying agency did not revoke his certification after the failed drug test. The hospital’s reputation suffered, and it was involved for years in very costly litigation and mediation with its patients, the staffing agency, and the certifying agency.
It’s also important not to overlook others a facility engages, even if their employees never set foot in your office or facility.
It’s also important not to overlook others a facility engages, even if their employees never set foot in your office or facility. For example, performing monthly healthcare exclusion checks against the OIG’s List of Excluded Individuals and Entities (LEIE) and all other primary source exclusion lists is a must. Unfortunately, if not managed appropriately, a supply chain manager simply wouldn’t know that they are doing business with an excluded individual and/or entity until after a problem was identified. By then, it’s too late to avoid the consequences, which, monetarily, could be as high as
Another possible consequence of dealing with an excluded supplier or individual is the repercussion of improperly submitted claims under the False Claims Act. In February of 2017, the Department of Justice increased the penalty range for improperly submitted claims from $10,957 to $21,916 per claim.² The new range has more than doubled the original fines set in 1986. Understandably, many organizations are simply not in a position to risk such hefty financial damage.
Of course there are consequences to a hospital’s finances and reputation when they fail to take the necessary precautions that vendor credentialing involves, but there are repercussions to workflow and efficiency as well. Vendor representatives’ unplanned (or unapproved) visits can create unnecessary and disruptive distractions for staff, and some could even create safety concerns by wandering into unauthorized areas.
There are many motivations for creating a robust vendor credentialing system: avoidance of fines and litigation, preservation of reputation, and creating an orderly work environment are just a few. Building an efficient and compliant vendor credentialing program not only decreases liability while promoting safety, but it also gives your vendors an opportunity to demonstrate that they’re willing to partner with you and comply to the policies of your hospital, which is a positive foundation on which to build a business relationship.
Learn more about how we can help you construct an efficient and effective vendor credentialing program.
¹ 42 CFR §§ 1001.1901(b)(3) and 1003.102(a)(2)-(3)