California Assembly Acts to Streamline Physician Credentialing Process

California Government Update

The California Legislature is considering a bill to simplify the process by which health insurers and plans credential providers. Currently, providers must satisfy the proprietary “credentialing” requirements of individual insurers/plans to contract with them. This generally requires submitting the same information, such as licensure, education and work history information, to each health insurer/plan, but doing so in compliance with the unique process of each.

New Credentialing Process

The chair of the California Assembly’s Health Committee, Jim Wood, introduced a bill to streamline the credentialing process earlier this year. His Assembly Bill 815 would require that the California Health and Human Services Agency (CalHHS) stand up a new state board by July 1, 2024, to certify private and public entities to credential providers by July 1, 2025. Providers that are credentialed by a certified entity would be deemed qualified to contract with insurers and plans (“jointly", “insurers”) without having to be individually credentialed by an insurer. However, health insurers would retain flexibility to contract with providers they select and would also be able to retain their own credentialing processes for physicians or surgeons who do not utilize a certified entity.

The new board would consist of representatives of health plans/insurers, physicians, surgeons and other providers, and a senior official from each of CalHHS, the state’s Department of Insurance, its Department of Health Care Services and its Department of Managed Health Care, or their respective designees.

Minimum Criteria for Certification

Under AB 815, the new board would oversee development of criteria for the certification of entities to credential physicians and surgeons by January 1, 2025. At a minimum, a certified entity would have to:

  1. Be certified by the National Committee for Quality Assurance (NCQA) as a certified credential verification organization
  2. Demonstrate compliance with the principles for credential verification organizations set forth by the Joint Commission on the Accreditation of Healthcare Organizations
  3. Document compliance with California laws and regulations applicable to physician credentialing and credentialing information

The certified entities would be funded by a fee that health plans would pay, based on the number of contracted providers credentialed.

Next Steps for AB 815

AB 815 passed the state Assembly on Friday, June 2, 2023, and is now pending in the state Senate, where it is likely to be heard by and must pass two different committees before getting to the Senate floor for a vote of the full house. If AB 815 is eventually adopted by the Senate, it then will be “transmitted” to Governor Gavin Newsom for his signature or veto. If Newsom signs it, California will be at least the fourth state to wade into how credentialing works. To date, Georgia, Oregon and Indiana have pursued similar initiatives. California may have learned from early adopters, as AB 815 proposes a credentialing body to oversee multiple entities, rather than having the state become the single credentialing body.



pursuant to New York DR 2-101(f)

© 2024 Manatt, Phelps & Phillips, LLP.

All rights reserved