An MCO that exercises reasonable care in credentialing and monitoring its providers reduces its risk of liability of a malpractice suit by one of its members. There are many managed care accrediting organizations. They also have a specific set of standards for PPOs and managed Behavioral Health Care Organizations. They have recently broadened their focus to accredit MCOs. MCO accreditation is important to many MCOs because the value of accreditation is looked upon as an indication to the public of the MCO's devotion and commitment to the principles of quality and continued improvement of services.
Some states require HMOs to be accredited.
Many health care purchasers require or encourage accreditation before they will sign on with an insurer. MCOs must also provide a full list of due process rights to a provider whose membership is denied, modified, suspended, or terminated. There are many reasons why an MCO can decide to deny, modify, suspend or terminate a provider's participation. These reasons, however, must be based on the reasonable belief by the MCO that the action would interfere with the physician providing the best quality of health care services. In order to render such a major decision, the MCO must obtain the facts, make a reasonable decision once all the facts are known, notify the physician of the decision, and offer the provider hearing procedures to file his appeal if he chooses.