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Credentialing Terminology Clarified

Original Post 6-30-04 on Blogger, Reposted 7-18 to TypePad

I've been working this week on a licensure white paper for a client and it reminded me just how CONFUSING is the terminology in the world of credentialing. I've got an e-Answers article on devoted to terminology, but it doesn't get into the the different types of governmental credentialing and I thought that might be beneficial so here goes...

Just to refresh your memory, the three major types of credentials associations grant are certification, curriculum-based certificates, and accreditation. In short, their primary similarities and distinctions are:

*Accreditation is granted to organizations while certification and curriculum-based certificates are granted to people.
*All are voluntary, meaning individuals do not have to earn a certification or certificate to engage in a given profession/role, nor does an organization have to be accredited to operate (see the article mentioned for how high-stakes programs can seem to be mandatory).
*All are granted by non-governmental entities (associations, certifying agencies, corporations, etc.).
*Certifications focus on assessing current knowledge and skill (usually of a broad scope) while curriculum-based certificates focus on training individuals on a focused set of knowledge and skills and then assessing attainment of the training learning objectives

I should clarify that occupational regulation occurs at the state rather than federal level of government - the downside of which, as many of you are probably aware, is that regulations can vary from state to state.

Often, we think of licensure as THE method of governmental regulation and sometimes licensure is used as the umbrella term, but it is not the only term you should be familiar with - there's also registration and statutory certification. Because the terms are SO confusing...
a Registered Nurse is really licensed, a Registered Dietitian is really certified by a non-governmental entity, and the list goes on...
it is best to understand the intent behind occupational regulation legislative acts and the terms usually associated. There are three main types: practice acts, title protection acts, and registration acts.

Practice Acts (usually called licensure)
Practice acts grant to individuals the authority to engage in defined tasks (to practice) and prevent persons not so licensed from engaging in those tasks.

Title Acts (usually called certification)
Title acts grant to individuals the authority to use an occupational title (such as Certified Public Accountant), but do not prevent others (other accountants and tax-preparers) from practicing.

Registration Acts (usually called registration)
Registration is a listing of persons who have identified themselves as performing certain tasks. Registering with a state entity could be either mandatory or voluntary.

Be aware that this was an simplified description of a pretty sophisticated and somewhat confusing topic. If you'd like to hear more in future blogs, click "Comments" on our blog page and let us know what you want to hear.

That's enough heavy stuff for today. Have a great holiday weekend.

You Don't Know What You Don't Know

Original Post 2-2-04 on Blogger, Reposted 7-18 to TypePad

When I started my business in 1997 I considered the structuring options. I decided to go with a sole proprietorship at the time, with the thought that I'd eventually structure as an limited liability corporation (LLC) for the limited liability benefit. At the time I hadn't read anything about significant tax benefits/downsides of any of the structures that I was considering.

As often happens, time flew and I never did switch to an LLC, which was okay because the protection an LLC affords is minimal anyway for my type of business.

Last week I had lunch with a consultant colleague. For no real reason, our conversation happened upon business structure. From that conversation came a nugget of information that will save me thousands of dollars annually in taxes. All you small business owners listen up! By switching to an S corporation, you only pay self-employment taxes on a predetermined salary the corporation pays to you instead of on net income (as a sole proprietorship and LLC do). And that 15.3% self-employment tax can add up. I've now met with an accountant and will be securing s corporation status ASAP. (March 2004 update: I am now an s-corp!)

Now, I consider myself a pretty knowledgeable and responsible professional. Yet, I as the business owner was not aware of this potential savings. So, my point: You don't know what you don't know!

My lesson learned is to get a professional opinion (or two)- on all matters for which you are not an expert. In what matters should you consider seeking outside expertise, either in your personal or professional life?

The concept certainly applies to PD and credentialing...
Let's consider certification, as an example. An organization could develop a certification program without any outside expertise. However, doing so could place the organization at quite a disadvantage for several reasons:
1) Inefficiency. Without guidance an organization can flounder about trying to determine the proper steps, methods, etc. And, of course, they may not even be aware of some of the steps/methods available or recommended as best practice. A consultant could efficiently set out all the options and advantages/disadvantages of each. (Sorry, that's not meant to be a plug!)
2) Liability. Certification can add much legal liability to an organization. It is essential that an organization consult with an attorney (ideally early on and at various stages in the development process - but at minimum, before the program is implemented) and consult with its insurance company to ensure it has adequate coverage. Not consulting with these professionals could expose your association to much legal risk...but, of course, you wouldn't know it...

Bottom line, we can't know everything, so when we venture into a new area, we need to turn to the experts for advice.