Vendor Compliance vs. Vendor Credentialing: What’s the Difference?

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As a vendor, navigating business compliance for healthcare can be complex and confusing. Without the proper credentials, it’s difficult to even enter a business relationship with a healthcare system. As you continue your relationship, posing a risk as a vendor might jeopardize your business. CMS (Centers for Medicare/Medicaid Services) has strict regulations on the use of third parties that affects whether a hospital can do business with you. Initial vendor credentialing is certainly an important part of compliance requirements, but ongoing compliance is equally important. 

In this post, we’ll explain the difference between ongoing compliance and initial credentialing and why both of these are vital for keeping patients safe and healthcare spending efficient.

Understanding The Vendor Credentialing Process

Healthcare systems rely on third-party vendors for everything from printing services to medical devices to staffing agencies, and everything in between. Prior to using a vendor, a supply chain department must validate the vendor’s credentials. Vendor credentialing is how hospital systems verify third-party suppliers before deciding to purchase any type of services or products. Vendor credentialing protects patients for any external threat to their safety. This includes background checks for representatives, visitor badges, receiving the appropriate vaccines, and any necessary training at your hospital . Depending on the service you are providing to the healthcare system, what you actually might need will vary. Hospitals rely on their supply chain department administrators, or anyone involved with managing vendor relationships, to ensure that all regulations are met to protect the hospital’s patients and resources.

Not too long ago, having access to a hospital was easier. Now, there are regulations created to protect patient privacy such as Health Insurance Portability and Accountability Act (HIPAA), that require vendors and third party suppliers to provide their information to hospitals in order to verify their business. Once information is submitted into a hospital’s database and credentials have been met, your business has access to engage in business at a hospital system. Just as a physician must meet certain credentials before being employed at a hospital, third-party vendors must be regulated to access the area of the hospital they are providing business to. To have met your credential requirements means you have met all the necessary legal requirements before getting any access to engage in business with a hospital system.

Understanding Ongoing Vendor Compliance

Hospital systems also have to worry about ensuring that their vendors continue to meet regulatory standards when receiving federal funding. That’s where ongoing vendor compliance comes in. In accordance with Sections 1128 and 1156 of the Social Security Act, HHS OIG mandates that healthcare organizations do not hire or do business with “excluded or sanctioned individuals or entities.” If a hospital is found guilty of doing so, they face a $20,000 fine.

Vendor compliance is ensuring that vendors are regularly compliant with federal and state regulations on an ongoing, continuous basis. VendorProof checks around the clock that your business is in line with federal and state regulations. Healthcare exclusions represent a significant area of compliance risk for health systems. Health systems must ensure that no person and business they employ or contract with is excluded, or face severe fines and penalties. An exclusion means that person or business is excluded from receiving any money from federal or state healthcare programs. Since healthcare organizations receive federal reimbursement, not working with excluded people or businesses is a way to reduce risk and protect the integrity of taxpayer-funded healthcare. VendorProof makes this process smoother by monitoring health systems’ vendors for OIG exclusions.

Learn more about how VendorProof catches exclusions here where we explain what exclusion monitoring is and how VendorProof works.

However, being a safe and compliant vendor involves more than just being monitored against OIG exclusions. VendorProof works around the clock to check vendor compliance for owner attestations, medicare advantage program requirements, stark/physician ownership, FCPA, SOC and so much more. VendorProof can effectively help to capture your hospital system’s program requirements and distribute them to the right parties (i.e. questionnaires, attestations, etc.).

So, what's the difference?

Compliance violations cost the healthcare industry millions of dollars every year, pulling dollars from where it really matters–patient care.To protect the integrity of our healthcare system, it’s important for health systems to conduct both initial credentialing and ongoing compliance checks of their vendors, ensuring trust during the entirety of the relationship.

Think about it like this: vendor credentialing gets your foot in the door, and if you pass the test, you’re hired. But after you get in the door, having your vendor compliance up to date keeps you in the building to continue doing business with your healthcare partner year after year with the confidence that all parties involved are safe, compliant, and fraud-free. This process allows healthcare systems to feel safe to continue doing business with your company because they know you’re not introducing potential compliance risk to their organization.

We all feel safer when we are assured and protected, especially our frontline workers. Let’s all do our part in protecting our healthcare systems and the patients they serve.

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