What to include in a delegation agreement

In managed care credentialing, delegation is defined as a formal process by which an organization gives another entity the authority and responsibility to perform certain functions on its behalf through a contractual arrangement. For health plans that wish to delegate components of its credentialing process to another entity, NCQA and URAC require several elements to be in place, including a predelegation assessment, a delegation agreement, and oversight assessment activities. Regardless of what credentialing activities are delegated, accreditors still hold the health plan responsible for the full credentialing of its providers.

The delegation agreement must be mutually agreed upon between the health plan and the delegated entity through a dated and binding document, which may be a standalone contract or an addendum to an existing agreement. This agreement must contain various elements to support the arrangement,
including the following:

• Responsibilities regarding delegated activities: The activities performed by the delegated entity must be described in sufficient detail to ensure clear understanding by both parties, as well as what will continue to be performed by the health plan in either specific or general terms (e.g., all credentialing activities not identified as the responsibility of the delegated entity).
• Reporting requirements: The delegated entity must report its credentialing activities to the health plan at least semiannually. The agreement must outline the process by which this reporting will occur and the information to be reported. This reporting must happen even if the delegated entity is accredited. However, credentials verification organizations do not have the same reporting requirements, as they do not make credentialing decisions.
• Performance evaluation and remedies: The agreement must describe how the health plan will monitor and assess the performance of the delegated entity. If the delegated entity is not meeting expectations as outlined in the agreement, the various actions available to the health plan must be described, such as a corrective action plan or termination.
• Right of final determination: The health plan retains the right to make a final decision about any provider within its network, including those for which credentialing has been delegated. Actions may include approval, suspension, or termination.
• Protected health information (PHI): In the event that the use of PHI is included within the delegation agreement, additional elements are required within the contract.