Credentialing Corner

# Legal Implications and Risks of Inadequate Credentialing

- May 30, 2024
- Posted by Kristen Edwards

27 Oct

Recruiting professionals in any institute is the prime and foremost priority of the administration. Hiring well-qualified and highly skilled doctors and paramedical staff is vital in the healthcare department. Therefore, credentialing is done to get to know the qualifications and credibility of the medical practitioners.

Credentialing is made mandatory by the state health department for all the hospitals and healthcare institutes before hiring the doctors. In case of any negligence regarding credentialing, the hospital and the medical practitioner will be charged with legal allegations and may have to face serious penalty charges. Therefore, it is recommended to credential the medical practitioners with full attention and care. There is no margin of error as doctors deal with patients’ lives. Hiring healthcare providers without credentialing is a big crime, and the whole healthcare institute can be sued.

In this article, we will learn the legal implications of inadequate credentialing. We will also learn the legal standards for credentialing and licensing. This will help you to determine the importance of credentialing in the medical field.

## Understanding the Concept of Credentialing

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Verifying a candidate’s credentials involves examining their supporting documentation, including their academic records, licenses, employment history, peer reviews, behavior certifications, and training certificates. It starts with the application submission phase and concludes with application approval or denial. The hospitals perform credentialing independently or with a credentialing firm’s assistance.

Credentialing, in other words, ensures that the hospital’s medical and paramedical staff provide patients with high-quality care and services. The credentialing procedure aids in determining which applicants are suitable for the position of advanced practice providers. As of right now, credentialing is required per US healthcare department directives.

## Legal Consequences of Improper Medical Credentialing

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### 1. Malpractice Liability

Malpractice liability is the highlighted consequence because of improper or inadequate credentialing. Inadequate credentialing allows non-professional doctors to practice medicine, which can cause harm to the patients while treating them. If the patient is harmed during any treatment method, like an operation, then the patient can go for legal proceedings, and the court will look for the credentialing of the doctor. Inadequate credentialing will stain the reputation of the hospitals hiring quacks to treat the patients. Patients’ trust will be broken, creating a bad impression about the whole doctor’s community. Every patient will think a hundred times before going to the doctor because of fear of malpractice.

### 2. Negligent Recruitment of Medical Practitioners

Healthcare institutes are mainly responsible for checking the background history of the candidates before granting them jobs. Hospitals are accountable for the credentialing process of the doctors. It is necessary to do this task with precision. In case of any negligence or inadequate credentialing, the hospital will be charged with allegations of negligent hiring of the medical practitioners, and the credentialing board will overlook this matter for further investigations. Inadequate credentialing will appear in the inquiry, and then the hospital and the medical practitioners must face charges like a permanent hospital seal, imprisonment, and fines. This will damage the medical practitioner’s career, and the hospital will go under complete seal for violating the credentialing rules.

### 3. Loss of Privileges and Membership

Medical practitioners are granted medical privileges according to their expertise while hiring them for the job. When it is known that the medical practitioners have inadequate credentials for the job, the hospital abandons all the benefits, and permission to practice medicine is denied. Similarly, medical staff membership is also granted to the doctors, which will be canceled in case of inadequate credentialing. It will result in losing permission to work in the institute, which will also affect the career of the medical practitioners as the new employer will check for the background work experience.

### 4. Penalties and Sanctions

Inadequate credentialing and non-compliance can result in severe penalties and sanctions. Healthcare institutes will be charged fines like $50,000 per violation and even cancellation of institute license. Medical practitioners with inadequate credentialing can be accused of a practicing license issued by the licensing board in case of severe violations. Therefore, it is advised to do the credentialing according to the standards and policies set by the credentialing boards.

### 5. Lawsuits from Patients

When patients learn about the inadequate credentialing of the doctors within the hospital, then affected patients join and file a case action lawsuit against the medical practitioners and hospital. This results in severe actions against the hospital, and sometimes, the financial settlement between the hospital administration and patients can help to resolve the issue. Still, the credentialing boards will proceed legally against the institute for violating the rules and regulations.

## Risks Associated with Inadequate Healthcare Verification

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Inadequate credentialing of the medical staff means that the doctors and the paramedical staff need to be more competent and qualified, which will pose severe problems for the patients and the doctors. Following are some risks described linked with the inadequate verification:

### ● Patient Safety Risks

Patient safety should be the priority for all the healthcare institutes as well as the medical practitioners. If the doctors and the paramedical staff are less qualified and less skilled, it is definite that their health is at stake, and they can face severe complications during their treatment process. So, the inadequate credentialing is compromising the safety of patients.

### ● Financial Loss

Inadequate credentialing or verification of the background of the medical practitioners will lead to the imposition of fines, sanctions, and legal cases. These things will cost the healthcare institute. In addition, more finances will be required to replace the non-verified, less competent people with verified experts for healthcare duty.

### ● Damage to Reputation and Trust

The trust of patients forms the reputation of the healthcare institute. Adequate credentialing will be needed to maintain patients’ trust, as hospitals are putting patients’ lives in danger by hiring less qualified doctors and other medical practitioners. No trust between the organization and the patient will discourage stakeholders from cooperating with the institute. News on TV and social media will further add to the deterioration of the reputation of the healthcare institute. Eventually, no one will like to get treatment from a tainted and notorious healthcare institute, and the healthcare institute may have to face a severe crisis.

## Legal Standards for Medical Licensing and Credentialing

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Medical licensing and credentialing is a complex process, and each healthcare organization is supposed to do the credentialing according to set rules and regulations. These are some legal standards and policies for credentialing and licensing. These standards ensure that highly skilled and qualified medical practitioners are hired to treat patients with the best care. Some legal standards are described below:

### ● State Licensing Requirements

Medical licensing is mandatory for practicing medicine as it ensures that the medical practitioner is highly skilled and focuses on the practical skills of the medical practitioners. Each state has its licensing boards to grant practice licenses to medical practitioners. There are fixed criteria like completing a medical education degree, getting training, passing a licensing exam, and maintaining obligations for continuing education to get the license from the licensing boards. The candidate should complete these requirements to proceed with the accreditation or credentialing process.

### ● National Practitioner Data Bank (NPDB)

Before granting the license and medical privileges to medical practitioners, it is necessary to check the background records of the candidates from previous employers. This is done by consulting with the National Practitioner Data Bank (NPDB), a federal database with all the previous records. Licensing boards contact the NPDB to check the earlier forms of doctors for any malpractice history, disciplinary actions, breach of code of conduct, or criminal record. It is vital to do the verification by the healthcare institute before recruiting them and granting them privileges.

### ● The Joint Commission Standards

The Joint Commission is the independent, non-profit accreditation organization that sets the rules and regulations for credentialing. It sets the standards and makes the policies for the accreditation process to which healthcare institutes must adhere while credentialing. The Joint Commission has also set standards for granting privileges to medical practitioners according to their expertise. If a healthcare institute does not abide by the rules for accreditation, then that institute will face legal penalties, and the medical practitioner will be considered less qualified and have to face malpractice liability.

## Conclusion

Credentialing of the medical practitioners is mandatory, ensuring that the patients get the best possible medical treatment. Healthcare institutes are responsible for performing this duty while hiring medical practitioners. Inadequate credentialing leads to serious legal implications for healthcare providers and hospitals. Inadequate credentialing will result in malpractice liability, loss of privileges, penalties, sanctions, and license cancellation. Hospitals and medical providers may also face patient lawsuits and policy violation allegations.

This will result in reputational damage, break the trust bond between patients and doctors, and a financial crisis. To avoid this, healthcare institutes must follow the standards and policies made by the joint commission and licensing boards. The healthcare institute must contact the national practitioner data bank to check the doctors’ credibility and professionalism.

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