URAC Core 17 -- Delegation Contracts

A sticking point for many applicants over the 6.5 years I've been conducting URAC audits and/or advising URAC applicants, delegation contracts require more attention than most aspects of a URAC accreditation application. The standard reads:

CORE - 17 - Delegation Contracts
"The organization enters into written agreements with contractors that:
(a) Specify those responsibilities delegated to the contractor and those retained by the organization;

(b) Require that services be performed in accordance with the organization's requirements and URAC standards;

(c) Require notification to the organization of any material change in the contractor’s performance of delegated functions;

(d) Specify that the organization may conduct surveys of the contractor, as needed;

(e) Require that the contractor submit periodic reports to the organization regarding the performance of its delegated responsibilities;

(f) Specify recourse and/or sanctions if the contractor does not make corrections to identified problems within a specified period;

(g) Specify the circumstances under which activities may be further delegated by the contractor, including any requirements for obtaining permission from the organization before any further delegation; and

(h) Specify that, if the contractor further delegates organizational functions, those functions shall be subject to the terms of the written agreement between the contractor and the organization and in accordance with URAC standards. "

A few things to remember:

• If your delegate is URAC-accredited, this is the only standard that applies to that delegation relationship.
• Subsection (b) is explicit about the agreement requiring that the delegate comply with URAC standards. A clause requiring the delegate to comply with your organization's standards (which, of course, comply with URAC standards) is not enough. Similarly, a clause requiring that the delegate comply with another accreditor's standards (e.g., NCQA) is not enough. However, a requirement that the delegate comply with "applicable accreditation standards" is sufficient.
• Subsection (c) is another tricky one. Put simply, your contract must have a clause which confers an affirmative obligation on your delegate to let you know when circumstances have changed such that it can no longer perform the functions it's supposed to perform under the agreement. This is separate from the reporting obligation under subsection (e). Be explicit about this requirement on your delegate.
• Subsections (g) and (h) are distinct requirements. Restated, (g) requires that your agreement describes what the delegate must do in order to subdelegate (e.g., get your permission in writing). If your agreement prohibits subdelegation, that will suffice. Subsection (h) is applicable only if subdelegation is permitted, and requires that your delegation agreement require that any subdelegation arrangement be subject not only to your organizational requirements but also to URAC's (or "applicable accreditation requirements").