There are many factors that can affect your medical practice’s revenue cycle, including patient volume, coding and billing errors, and provider productivity. However, an often-overlooked component of the revenue cycle is provider credentialing. Without an effective action plan, credentialing issues can hurt your practice’s fiscal health, impact provider morale and potentially cause compliance issues.
The first step in provider employment, credentialing is a process of verifying and assessing a provider’s qualifications, including education, career history, training experience, residency and licenses in specialty certificates, and other qualifications. It’s also a way to determine if a provider has any pending medical violations.
Practices or external credentials verification organizations (CVOs) collect information from providers and other sources, and coordinate with government and commercial payers to ensure providers are qualified, which helps protect patients. Otherwise, providers will not be permitted to see most patients or provide care in a hospital. Moreover, the practice will not be able to receive payment from commercial payers, Medicare or Medicaid for claims, though retroactive billing can sometimes apply.
By the numbers
- 2: Years providers typically need to be re-credentialed
- 2: Years for renewal of physician privileges (except in Illinois, where it’s every 3 years)
- 90-180: Days it can take between submission of provider application and credential verification and approval
- $200: Average cost of credentialing each provider (incurred by practice or hospital)
- $250-$600: One-time enrollment fee per provider for outsourced credentialing
- $66-$129: Monthly fee per provider for outsourced credentialing
- $33,000-$50,000: Cost to hire an in-house credentialing specialist.
The importance of credentialing in revenue cycle management
Credentialing new providers can often be onerous, time consuming and frustrating for the medical practice team and providers. “Arguably, it’s one of the most important considerations of medical practice management today,” says Leslie Jebson, MHA, MBA, FACHE, FACMPE, executive director, clinical strategy and initiatives, Texas A&M Health, College Station, Texas, noting that practices would do well not to “underestimate what a poorly organized credentialing process” can do to its revenue cycle.
Credentialing can significantly contribute to claims denials, as reflected in an Aug. 24, 2021, MGMA Stat poll in which more than half of medical practices reported denials related to provider credentialing increased in 2021.1 In that poll, practices noted that they had experienced denials for numerous reasons, including:
- Long delays in processing new provider applications
- Lack of communication from payers to medical practices
- Frequently changing and varying requirements
- Closed networks/issues with new plans
- Outright discrepancies.
Denials ultimately impact key performance indicators (KPIs), such as days in A/R, aging claims and clean claim rate, within revenue cycle management:
- Days in A/R — For practices, the goal from claim submission to close should be 30 days. However, if a provider is seeing patients and is not credentialed, that time will increase substantially with each denial, which may take a few weeks just to receive notification.
- Aging claims — Claims will continue to age the longer a provider goes without being credentialed. A/R aging can be controlled if practices address credentialing issues immediately and make certain that they renew credentials on time.
- Clean claim rate — Practices should strive for a 90% clean claim rate; however, denied claims due to credentialing issues will cut into that rate. If a new provider is having credentialing issues with a prominent payer, many claims will need to be reworked, resulting in significant time and effort by the billing and coding staff.
Given the prevalence of denials related to credentialing, it’s no wonder practices have become frustrated with payers. As Jebson points out, much of this has been caused by a credentialing process that has become increasingly complex and labor intensive, one that includes “changes and scopes of practice, and the ever-evolving requirements of payers, both government and commercial, and even organizational standards for accrediting bodies.” To help address some of these issues, practices need a sound plan for provider credentialing.
The link between credentialing and privileging
Credentialing is a requirement when obtaining privileging, which authorizes and helps determine a credentialed provider’s scope of practice associated with patient care. Additionally, it includes the evaluation of a provider’s clinical qualifications and/or performance. For providers, there are three primary categories of privileging:
- Admitting privileges — Primary care providers can admit patients in their care to the hospital, and they are not required to go to the ER first.
- Courtesy privileges — Providers can occasionally admit their patients to the hospital and visit them for general medical care, but they are not permitted to treat their patients in the hospital.
- Surgical privileges — Providers can perform outpatient procedures and have access to a hospital’s operating room, as well as surgical centers and other medical facilities.
As they begin to dig into the credentialing process, practices should be aware of a few key terms:
- Primary source verification (PSV) — The cornerstone of credentialing, PSV is the process of reaching out to originating sources, such as educational institutions, federal and state government agencies, and hospitals and past employers, to confirm that an individual possesses a valid license, educational degrees, and credentials. It’s also an opportunity to verify references. It is the responsibility of the accredited organization, such as a practice or hospital, to carry out PSV, not the licensed provider.
- Delegated credentialing — Using a CVO to handle credentialing can expedite the process so that providers can enroll with payers and start seeing patients sooner. Getting providers credentialed as soon as possible can markedly improve practice efficiency in the revenue cycle and the provider experience.
- Compliance monitoring — The process of monitoring federal, state and local accrediting bodies for complaints and disciplinary actions to ensure providers are accredited, licensed and in good standing.
Given the complexity, the decision on in-house credentialing or outsourcing often comes down to practice size. According to Jebson, the benefits of outsourcing include cost savings, broader range of expertise, access to a larger pool of talent and internal expertise development. For outsourced services, practices should expect to pay a one-time enrollment fee per provider of $250 to $600 and a monthly fee of $66 to $129. However, Jebson notes that practices should be aware of CVOs that use offshore credentialing staff, which can affect quality and dedication.
Another factor that Jebson says practices should consider is taking state-specific payer rules into account. “Some of the different places that I’ve worked, it’s been much more cumbersome, because of the state regulations or payer rules of that particular state, and a little easier in other states,” says Jebson, noting that those considerations will affect the credentialing timeline.
Conversely, insourcing provides more direct control for practices. However, as Jebson points out, practices should be aware that “It’s a field in very high demand, and a very tight labor market, even prior to the pandemic.” On average, practices should expect to pay an in-house credentialing specialist $33,000 to $50,000.
Investing in credentialing specialists
For larger practices, an in-house credentialing specialist may be the best fit, since providers generally need to get recredentialed every two years. With high demand for credentialing specialists, once a practice finds the right candidate, Jebson says it’s important to invest time in getting that individual up to speed on the practice’s credentialing needs. “There’s always a really large training curve,” says Jebson.
From his experience, Jebson has been able to identify traits employees need to succeed. “The ideal credentialing specialist … [is] a combination of a pit bull and a hunting dog. … That person also needs to have the demeanor of a lovely old grandmother when dealing with payers,” asserts Jebson.
To help ensure that credentialing specialists are well trained, practices should invest in professional memberships and promote certification. “Once they’re fully trained up, they become an invaluable asset,” says Jebson. “The providers know exactly who they are and how to go to them to answer questions.” In turn, practices can create a structured employment model that provides compensation incentives for accreditation, completing certification in a specified amount of time and for accurate submissions.
Leveraging technology in the credentialing process
If your practice decides to hire an in-house credentialing specialist, Jebson maintains that you should examine solutions that could make credentialing easier, given the breadth of data that needs to be submitted. First, some EHRs have credentialing capabilities, so you may not even have to invest in additional software solutions. For those who do, he notes that they should determine the cost-effectiveness of purchasing a credentialing solution versus leasing one.
A simpler and less expensive option is to use Excel spreadsheets in a web-based collaborative platform such as SharePoint, which is the path Texas A&M Health took. “We don’t have any third-party vendor issues,” Jebson says. “We can pull data reports out of our EHR, but we don’t have any additional costs of credentialing solutions from our EHR, either.”
With so many daily tasks done electronically, practices should also consider creating an electronic provider credentialing application form. Similarly, once a provider has been hired, it’s crucial for practices to have a plan for automating and sending out requests immediately. “We drop all of our completed documentation into SharePoint and keep it secure there,” says Jebson of Texas A&M Health’s ability to streamline the process.
7 steps for credentialing success
When insourcing credentialing, Jebson encourages practices to do the following:
- Prepare all provider documents — Collect the required documents and information mentioned, ensuring that providers know that they will be used every time they have to get credentialed and apply for privileging.
- Hire a credentialing expert — A credentialing specialist can monitor applications, send reminders and follow up throughout the credentialing process, improving the opportunity for success.
- Allocate enough time — By handling the credentialing process properly, a credentialing specialist can reduce the amount of time it may take to register with payers, which can be up to five or six months.
- Maintain CAQH profile — By keeping providers’ personal and professional information up to date on the CAQH credentialing database, practices can ensure an expedited acceptance process by allowing payers and employers to verify providers’ information.
- Keep a checklist — Creating a checklist not only certifies that you have all the providers’ information — important numbers, passwords, tax ID, license number, and professional and educational documents — in one place, but also application status and dates, as well as requirements for submission.
- Ensure contact information is up to date — Because provider credentialing can take several months, there may be instances in which contact information may be needed for an immediate request. As such, a credentialing specialist should make sure that they regularly stay in touch with providers during the credentialing process.
- Follow up in a timely manner — The credentialing process often involves multiple submissions prompted by new requirements or revisions in state law. That’s why it’s vital to follow up once applications are submitted and respond to all queries in a timely manner.
Emphasizing credentialing once a provider has been hired
Time is of the essence when getting providers credentialed before their start date. The clock starts when a provider signs their employment agreement, so credentialing needs to start then. If providers are still waiting to be credentialed on their first day on the job, Jebson suggests having them see Medicare and Medicaid patients first, along with those commercial payers that allow for retroactive billing. Doing so will likely reduce the number of denials.
Jebson also encourages practices to keep a list of go-to payer contacts who can help push the credentialing process along. “We found that the insurance companies have gotten so big, and they themselves have turnover in their workforce so often that when we find helpful people inside the organization, we keep them as a primary contact,” says Jebson.
Jebson stresses that it’s also important to draft a backup reference guide and process map to document the credentialing process. This can be kept on an encrypted USB drive and on a piece of paper so that it can easily be referenced by a credentialing specialist if the organization’s system goes down.
In addition, to help mitigate denials related to credentialing status at Texas A&M Health, credentialing specialists have the capability to click on payers by provider in the practice’s EHR and update providers’ payer plans once they are credentialed. “It’s another way that we find that the front desk staff don’t have to worry about it, and that we are going to have the latest in real-time activation of the payers by managing it through our credentialing staff,” says Jebson.
All these steps can help new providers recognize that your practice is on the ball. “If you demonstrate to those new providers who you’re bringing in that you’ve got a culture of being organized, professional, fun, and inclusive, it will really go a long way in the onboarding and retention process,” emphasizes Jebson.
- Provider Credentialing 360: Tools and Knowledge to Maximize Your Revenue (on-demand seminar) — Learn best practices and discover new tools to optimize your practice’s new provider credentialing and onboarding: mgma.com/credentialing-sem21.
- “Not-so-graceful aging: Half of practices saw days in A/R increase in 2021” — A strong focus on A/R remains crucial in an era of rising costs and ongoing uncertainty: mgma.com/stat-111121.
- MGMA Benchmarking Data — Understand the past and present to propel your practice into the future with industry-leading data analysis and survey reports: mgma.com/datadive-overview.
- MGMA Consulting — Get an organizational tune-up and overcome new challenges with the help of experts in medical practice management: mgma.com/consulting.
- “More than half of practices report credentialing-related denials on the rise in 2021.” MGMA. Aug. 26, 2021. Available from: bit.ly/3qlar53