Is an M&A in Your Organization's Future? Be Ready for What's Next for Your NCQA Survey

By Nancy Ross Bell, RN

Estimated time to read:  4 minutes

Take heed that some predictions for healthcare trends are pointing towards an increase in mergers, acquisitions, and consolidations (MAC) in 2024. While many quality professionals leading NCQA activities may have never been involved with a MAC, your role is critical should one occur. Knowing how to prepare and when to seek guidance is vital to your organization maintaining its NCQA Accreditation status. Read this blog for highlights on the MAC process.

What are MACs?

NCQA collectively refers to MACs as mergers when corporations reorganize. Examples of mergers you may encounter include:

• Two organizations form one new entity and establish a new brand identity
• One organization purchases all or part of another organization to gain control
• An organization affiliates with another entity

MHR Confirmed With NCQA

It’s not unusual for organizations to have unique situations, especially in the complex environment of MACs. Here is a situation in which we asked NCQA’s Policy area for clarification.

Q: An organization with three wholly-owned subsidiaries sold a portion of one subsidiary to a new Joint Venture entity; this partially sold entity was no longer a “wholly-owned” subsidiary. Can the partially-owned subsidiary still be included in the organization’s NCQA Accreditation SSME survey?

A: NCQA confirmed that partially owned legal entities are not eligible for SSME Accreditation; only wholly-owned subsidiaries may be included in an SSME survey. The new Joint Venture would need to come through its own NCQA survey and would not be able to be included in the organization’s SSME survey.

Tip: Assess if the new entity previously had any sister company relations that would now be considered delegation, as it is no longer a wholly-owned subsidiary of the same corporate family.

Why Now?

Broad drivers fueling healthcare MACs include:

• Administrative burden reduction
• Digital technology/artificial intelligence
• Financial incentives
• Integrated delivery networks and strategic growth
• Behavioral healthcare innovations
• Regulatory changes
• Remote Patient Monitoring (RPM) coverage
• Value-based care models to improve quality
• Virtual care demand

 Why Does It Matter?

Even if your organization is not directly involved with a MAC, you could be impacted by downstream contracts or information-sharing arrangements.

If your Accredited organization is directly involved, be prepared to notify NCQA of changes, including:

• Branding/Marketing of products or service areas
• Centralization or consolidation of functions
• Corporate structures
• IT systems and data collection methods
• Legal entities
• Membership numbers (members, individuals, patients)
• Population Health Management programs and activities
• Products and product lines
• Provider networks and access
• Service areas
• Staffing and Leadership 

Notification to NCQA is critical as modifications in legal entities, service areas, centralization of functions, licensure, networks, and HEDIS/CAHPS reporting units could change how you apply for your next NCQA survey.

NCQA-Accredited Organization Notifies NCQA

An NCQA-accredited organization must submit written notice to NCQA at [email protected] within 30 days or earlier of the date following a MAC or reorganization.

Include in the written notification:

• Information listed above and supporting document
• Your organization’s NCQA Accreditation status and expiration date
• Entities involved with the MAC and their NCQA Accreditation status
• Dates, as appropriate
• Acquisition date: when the purchase or transfer is closed, including assets and members
• Consolidation date: when a plan stops performing its functions, and the remaining plan begins performing the function fully
  • Merger date: when two or more separate legal entities become one
  • Reorganization date: when the new entity, dissolution, or corporate restructuring plan is effective

NCQA Discusses Pending Transaction with the Organization

NCQA and the organization will discuss the potential impact of a pending transaction on its Accreditation status and schedule a MAC survey as appropriate. 

NCQA may conduct a MAC Survey within six months of a merger or consolidation of an Accredited and Non-Accredited entity. In addition to the information in the notification, NCQA may review a subset of standards impacted by the merger. NCQA may consider a new entity unaccredited and require a Full Survey. A pass/fail methodology is used for a MAC Survey, and the new entity must earn 80% of the applicable points for each standard category.

Refer to NCQA's Appendix on MAC for a complete list of required documents, the file review process, and the standards under review. For health plans, it is Appendix 3, and for MBHOs, it is Appendix 4 of the 2024 standards.

Instead of a MAC Survey, NCQA may evaluate NCQA-Accredited organizations for their continued compliance under a Discretionary Survey and validate the appropriateness of the organization’s ongoing Accreditation. An organization’s Accreditation status could change as a result of the Discretionary Survey.

Refer to NCQA’s Policies and Procedures of your standards for a complete description of the Discretionary Survey process.

How Should You Prepare for Surveys and Maintain Accreditation?

When it comes to MAC or Discretionary surveys, your preparation now includes consideration of your future operations with less familiar entities, procedures that may not yet be explicitly defined, or working on plans with future implementation dates.  Both pre-and post-merger documents are considered relevant, and the look-back period for file reviews (CM, UM appeals and denials, CR) includes the time since the merger.  Still, you must maintain your Accreditation status and ensure members, individuals, and patients are not negatively impacted. 

Create an action plan and assign accountability to:

• Review the plan to notify members and providers
• Develop interim procedures for approving care
• Decide how inquiries about the MAC are escalated
• Create new committee structures and descriptions
• Revise program descriptions
• Update your population assessment and population health management (PHM) strategy
• Evaluate credentialing statuses of providers
• Revise delegation agreements to include new legal entities
• Develop new materials and website content
• Compare medical policies
• Revise operating policies and procedures
• Evaluate new systems for information integrity

What’s the Impact of Not Passing a MAC or Discretionary Survey?

A new entity that fails the MAC Survey receives Denied Accreditation status.

Not passing a Discretionary Survey can result in your organization’s Accreditation status being revoked or suspended.

Remember, the costs for all surveys are the organization's responsibility according to NCQA’s pricing policies at the time of the survey.  

NCQA MAC Resources

Refer to NCQA’s policies for MAC in your respective standards:

Health Plan (HP) Accreditation: Appendix 3

Health Equity (HE) Accreditation: Appendix 4

Managed Behavioral Health Accreditation: Appendix 4

Case Management (CM)  LTSS:  Appendix 3

Credentialling Verification Organization (CVO): Appendix 5

Utilization Management Accreditation: Appendix 4

Health Information Product Certification: Appendix 3

Wellness and Health Promotion Certification/Accreditation: Appendix 5

Other

Predictions on 2024 Healthcare M&A Trends: What Leaders Need to Know

2024 Predictions: Unveiling the Future of Healthcare Mergers and Acquisitions

Call to Action:     

• Contact your MHR Consultant to discuss a forthcoming MAC prior to the arrangement becoming effective so that MHR can help you strategize legal entity structure and auto-credit for delegation.
• We will:
  • Strategize the best legal entity structure to maximize auto-credit
  • Review all documentation
  • Audit files
  • Assess your delegation/sub-delegation agreements
  • Score the standards under review
  • Coach your team on preparing for your survey
  • Advise on sustaining accreditation as a new entity 

Contact Susan K. Moore at susan@managedhealthcare resources

Follow MHR on LinkedIn:

https://www.linkedin.com/company/managed-healthcare-resources-inc/

Connect with or Message Susan on LinkedIn:

https://www.linkedin.com/in/susanmooremi/

MHR follows a quality review process for all blogs. This blog on Mergers, Acquisitions, and Consolidations was reviewed by Kimberly Carpenter Petit. Please read more about Kim and the other MHR Consultants on our website. 

MHR: Driving healthcare quality one NCQA accreditation at a time

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