What is Vendor Credentialing? Your Complete Guide | symplr

Vendor credentialing is the process hospital administrators go through of vetting third-party suppliers and sales reps before purchasing items or services from them. It’s a key part of an administrator’s responsibility to ensure that rules and regulations are maintained, both for the protection of patients and a hospital’s resources. Vendor credentialing is typically managed by the organization’s supply chain department, and is driven by directors of supply chain or materials management. However, administrators of vendor credentialing can include many people within a facility - basically anyone responsible for managing access to the facility or maintaining relationships with vendors.  

Administrators need to focus on the primary task of managing a healthcare facility so healthcare professionals can provide the best care and medical treatments to their patients. As such, they rely on outside sources for some tasks and services that would be too complicated and time-consuming to manage in-house.

After meeting credentialing requirements, vendor representatives are given access to areas of the hospital, depending on which areas are relevant to their services.

There is a similar credentialing process physicians need to go through before they are hired at a healthcare facility. Whereas healthcare providers are required to prove that they are licensed medical professionals, vendor credentialing is another form of verification that evaluates third party suppliers, so it regulates the access of goods and services as well as individuals to a hospital.  

Hospitals need to screen third party vendors carefully to ensure that they meet all necessary legal and insurance policy standards before doing business with them. 

It helps to use all available resources in this process, including government sources that clearly list vendors that are pre-approved and those that have been banned from doing business. Many hospitals have turned to vendor credentialing software to streamline this process.   

Let’s take a look at why vendor credentialing is so important. We’ll also provide some guidelines for successfully navigating this process as well as tips for improving the process, overall. 

Why is vendor credentialing important?

Vendor credentialing is necessary for a number of reasons. Often times, the supplies vendors provide are used for patient treatment. Regulatory standards are necessary, because the quality of vendor services can affect patient health outcomes. In turn, this can impact the legal and financial standing of a healthcare facility. 

Compliance violations cost the healthcare industry millions per year and provide risks to a Healthcare Facility’s lasting profitability. Compliance violations also often undermine the trust of the local community, which is not only a financial but a reputational liability. Trust, when lost, is often hard to regain.  

When vetting vendors, it’s important to ensure that they aren’t excluded from specific healthcare coverage plans before services are provided. 

Medicare and Medicaid as well as private insurance companies often have strict rules about the provision of third-party services to patients. Hospitals run the risk of facing penalties or fines if they violate these rules. They may also face legal repercussions if vendors fail to meet legal standards. This can take place when hospitals do not undergo correct procedures in the credentialing process.  

Particular requirements will vary, depending on the type of vendor. However, generally, a vendor’s approval will require some form of background check, verification of required training, approved immunization records, proof of liability insurance etc. 

What are the benefits of vendor credentialing in a healthcare system?

Vendor credentialing is absolutely necessary to ensure that hospitals maintain compliance with regulations and healthcare rules, whether government or private. Major regulators include the Joint Commission, the ACS, DNV, COA and the NCQA. 

A vendor credentialing system helps track these regulations and focus in on the ones that are relevant to a particular vendor. This makes the process quick and reliable.  

It also helps ensure the safety of patients and provides better health outcomes. Careful vendor credentialing results in a higher standard of care and better service to the community. 

Undergoing careful vendor credentialing is not a choice for hospital administrators. It’s an absolute necessity. 

There are a number of ways of conducting hospital vendor credentialing. For the most part, administrators have turned to a software solution. This allows them to streamline both the actual vetting and approval process as well as its ongoing organization.

Who has to go through the credentialing process?

Vendors, suppliers and sales representatives should be screened before getting access to certain areas in a hospital and before entering into contract. Additional populations who may need to be credentialed can include researchers, contractors, consultants, nurses, students, staff and volunteers. Keep in mind, there needs to be a front-desk process to identify individuals as they attempt to enter. This is made far easier and effective when using professional vendor credentialing software.  

Here are some basic guidelines to consider in the hospital vendor credentialing process.

  • Commercial Multiple Peril (CMP) liability stems from hiring or doing business with those who are on a list of “excluded individuals.” Hospitals may need to vet not only their own staff, but the staff of the vendors they do business with as well. 
  • Limiting liability requires maintaining familiarity with OIG’s List of Excluded Individuals and Entities (LEIE). A screening process needs to be put in place to avoid violations. This requires an understanding of the extent of the screening process required as well as knowing how screening standards should be maintained in ongoing contracts. 
  • Administrators need to understand which vendor items and services are governed by the LEIE. Keeping up-to-date with vendor credentialing requirements is crucial. 
  • They need to understand the various credentialing regulatory bodies, their requirements, overlaps and functions that affect their facility or healthcare system. 
  • They need a plan for documenting vetting processes as well as for managing communications with government overseers and any other responsible outside parties. This includes self-reporting potential violations, if they occur. 


How does vendor credentialing benefit providers, staff and patients?

Vendor credentialing helps benefit healthcare providers, staff and patients in a number of ways. It helps ensure that hospitals meet government rules and regulations, which minimizes the probability of legal infringements. 

Failure to abide by laws and regulations can result in fines and potentially even criminal charges. This helps explain why vendor credentialing is currently on the rise. 

Patients may also have legitimate grounds to file lawsuits in cases where banned vendors or vendor services have been provided.  

What kind of credentialing problems do healthcare facilities face? How can software help solve them?

Hospitals face a number of challenges in the attempt to accurately maintain vendor credentialing standards. It’s difficult to keep up with changing regulations, especially given that there are different regulatory bodies. It’s also hard to maintain ongoing compliance, given the possibility for staff changes in vendors. Added to this are the complications found in Medicare and Medicaid vendor requirements and restrictions. 

Basically, the only way to efficiently navigate this regulatory process is by using a database that cross-references and synthesizes all this information, so administrators can get instantaneous information about vendors and individuals as well as regulatory updates.

This is where a vendor credentialing service can be helpful, not only in saving resources on administrative tasks but also in terms of helping maintain credentialing standards.  

Software eases the process of managing vendor credentialing requirements. 

What should facilities look for when evaluating credentialing software?

Just as you would evaluate your vendors carefully, it’s important that a vendor credentialing service have several key things:

  • Customizable Credentials to account for the unique regulatory requirements a hospital may be subject to. This includes vetting vendors as well as staff. 
  • Compliance Reporting to make sure administrators are aware of new updates. This keeps information readily available internally. It also facilitates much easier reporting to regulatory bodies. 
  • Excellent Support helps ensure that software on-boarding is quick and easy and that training is provided so staff can use the platform sufficiently. 
  • Streamlined User Experience including dashboards that are easy to use, providing real-time updates and lists of people on site.
  • A Check-in Process that identifies vendors quickly at the front desk, so administration knows who they are and which areas of the hospital they have access to.
  • Corporate Accounts for larger vendors interested in managing of the credentialing process on their end. 

Check out our vendor credentialing software to do things the symplr way! 

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