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This article discusses the implications of designing a comprehensive competency assessment program for healthcare providers. Increased liability for providers, institutions, and liability carriers is providing the impetus for change. Current methods to evaluate competency are limited; most methods include requirements that simply validate licensure and credentials. This article discusses the literature that supports methods for evaluating competency by assessing skills and proctoring. The author proposes a three-part model to ensure that competency assessment and performance improvement is the mainstay of an organization's quality management program. The model includes (a) a skills assessment inventory, (b) a standards review to promote compliance, and (c) a peer review program. Included are samples from two comprehensive skills inventories designed for orientations for physicians and nurses.