Which description best defines ostensible agency in the context of health care credentialing?

Which description best defines ostensible agency in the context of health care credentialing?

• A. A formal written contract creating liability.
• B. Liability arising from appearance of control by the MCO over the provider.
• C. A doctrine that immunizes MCOs from credentialing liability.
• D. A type of administrative regulation.

Answer: (B)

Ostensible (apparent) agency happens when the principal’s actions create the impression that someone has authority to act for the principal, and a third party reasonably relies on that impression. In health care credentialing, this means an MCO can be held liable for credentialing decisions if its conduct makes hospitals, credentialing bodies, or others believe the provider is under the MCO’s control or supervision of the credentialing process, even without a formal agreement or actual authority. The liability arises from the appearance of authority and the reliance on that appearance. This isn’t about a formal written contract (that would reflect actual agency) or about immunizing liability, nor is it simply an administrative regulation.

Ostensible (apparent) agency happens when the principal’s actions create the impression that someone has authority to act for the principal, and a third party reasonably relies on that impression. In health care credentialing, this means an MCO can be held liable for credentialing decisions if its conduct makes hospitals, credentialing bodies, or others believe the provider is under the MCO’s control or supervision of the credentialing process, even without a formal agreement or actual authority. The liability arises from the appearance of authority and the reliance on that appearance. This isn’t about a formal written contract (that would reflect actual agency) or about immunizing liability, nor is it simply an administrative regulation.