Vendor Compliance

As healthcare systems roll out vendor credentialing programs, it’s important to understand what is and is not within the individual rep’s authority to agree to.

Vendor credentialing in healthcare mixes the credentials of individuals with their employers, but the average employee cannot enter into agreements on behalf of the employer.

All in all, suppliers want to provide the information their buyers need, but there are a few items occasionally requested in vendor credentialing programs that give supplier management pause: 

Anything that Affects Contract Terms –The account representative doesn’t have the authority to sign off on anything that modifies contract terms.   Healthcare buyers sometimes take the launch of a vendor credentialing program as the chance to slip in termination clauses, but that’s not appropriate.   If it’s important enough to modify a contract, it should be included in the contract proper.

Penalties – Penalty clauses for violating a hospital policy that state the contract could be terminated or require termination of the employee.   Again, if it’s that important, it should be negotiated as part of the contract.  

Business Associate Agreements – Account representatives are not in the position to accept a Business Associate Agreement.   This is even more significant now with the expansion of HIPAA requirements in relation to business associates in relation to the Stimulus Plan.   (In brief by February 2010, business associates must meet the same security and privacy standards as the healthcare provider.)  

Indemnity –   Account representatives typically are not directors of their employers so they have no authority to approve indemnification or liability agreements.  

An inherent value of vendor credentialing programs is a central view of the status of all the desired characteristics of the supplier company as well as account rep.   So if you can’t ask for these essential agreements, what can you do?

Store the Document – Your vendor credentialing program is a great tool for information management.   Leverage the tool to store the document and automate expiration alerts.   Healthcare systems can certainly ask the representative to add the current attestation of the already-negotiated-indemnity coverage to the system.   Just don’t ask them to personally sign off on the agreement.

Add Vendor Credentialing to Your On-boarding Process – The line between what the rep can agree to and what the company can agree to is crisper during the contract negotiation phase.   Articulate your vendor credentialing program participation requirements as you are negotiating the contract.   That way each side walks into the relationship with a clear understanding of expectations.   Appropriate supplier management can sign off on entity-to-entity level requirements, and the account representative can focus on what they do best – serving the customer.