Credentialing Mistakes That Drag Down Your Revenue February 27, 2023


Medical practice credentialing is a complex and time-consuming process. A practice that fails to follow the proper steps can suffer severe financial losses. Not only that, but other legal complications could jeopardize an entire healthcare organization. 

For example, the credentialing process thoroughly verifies the practitioner’s educational background, licensure, practice history, and training background. In 25 states, hospitals can be liable for medical malpractice resulting from negligent credentialing.

When organizations don’t follow the best practices in credentialing, they may face negligence claims that could lead to litigation. Many credentialing steps require a lot of time and effort, but these are vital to the functioning of many hospitals and healthcare facilities.

This article aims to explain to you what credentialing is, its process, and the credentialing mistakes that drag down your revenue.

What Is Credentialing?

The credentialing process verifies a physician’s education, license, experience, certification, affiliations, malpractice, adverse clinical occurrences, and training to validate their qualifications to deliver clinical care. Its main purpose is to ensure that practices and healthcare institutions adhere to local laws while practicing medicine. Additionally, it involves checking the physician’s background and disciplinary record.

The credentialing of physicians benefits physicians and healthcare organizations since it establishes trust between physicians and patients, ensuring only qualified physicians provide care. The insurance credentialing process allows healthcare providers to file reimbursement claims with insurance companies through affiliation. Payers can verify the legitimacy of a physician, thereby providing proper patient care and reimbursement.

What Is CAQH Credentialing, and Why Is It Important?

How does The Council for Affordable Quality Healthcare® (CAQH) work in credentialing providers?

The Council for Affordable Quality Healthcare (CAQH) is a non-profit organization dedicated to enhancing efficiency within the healthcare industry’s administrative processes. By offering a centralized platform for healthcare providers to manage their credentialing information, CAQH helps to eliminate duplicative efforts and expedite the credentialing process. 

The importance of CAQH in the credentialing process lies in its ability to confirm that healthcare providers possess the necessary qualifications and adhere to industry standards. It also conserves time and resources by obviating the need for multiple applications and manual verifications. Thus, providers can focus on delivering top-notch patient care without worrying about administrative complexities.

On the other hand, thousands of insurance companies use CAQH.org for credentialing because it is free. You can also adhere to the free CAQH Provider User Guide.

8 Important Steps in Credentialing Process

Medical credentialing can significantly affect patient outcomes, prevent financial penalties, and improve the quality of a community’s healthcare system. To ensure success in medical credentialing, follow these steps.

1. Complete the CAQH

To complete the CAQH process, follow these steps:

  • Establish a CAQH account
  • Complete the relevant application form
  • Validate the information provided
  • Submit the completed application
  • Await approval
  • Enroll in participating healthcare plans. 

It is imperative to continually update personal and professional information to guarantee smooth participation in healthcare plan networks.

2. Understand the Role of Governmental Payers and Commercial Payers

During residency, it’s not likely you’re thinking about who pays for your patients’ care. But once you start practicing, you must understand who the payers are. The U.S. healthcare system largely depends on third-party payers, so your patients typically only pay for some of their medical bills. These third-party payers include commercial insurers and Federal and State governments.

That’s why completing the accreditation and enrollment process with governmental payors is an essential step for medical practices to provide quality care to patients who rely on Medicare, Medicaid, Children’s Health Insurance Program (CHIP), Veteran’s Administration (VA), and TRICARE. These processes are necessary to serve and be reimbursed by these government programs. Not only does this process help to ensure that medical practices follow the strict regulations and guidelines set by these programs, but it also helps reduce the financial burden of these patients by making care more affordable. 

3. Prioritize Insurers

As a healthcare provider, it is financially beneficial to research the leading insurance providers in your region. This will allow you to provide high-quality patient care to most locally insured populations.

This will also guarantee accurate reimbursement from the insurance companies for services provided. It’s essential to know which insurers are in your area and the reimbursement rates to remain competitive in the local market.

This way, your practice can form stronger partnerships with insurance companies, leading to better patient outcomes.

4. Identify the Necessary Files and Documents

Be aware that each insurer requires different forms and documentation as part of its credentialing process. In this regard, ensure your application is complete and list all the insurance companies you plan to file with. 

Below are some of the standard requirements:

  • Immunization records
  • Social security number
  • Demographic information (ethnicity, gender, citizenship, languages spoken)
  • Education and residency information
  • Current medical license, Drug Enforcement Agency (DEA) registration, and board certification.
  • Work history
  • Hospital affiliations
  • CAQH enrollment
  • Proof of insurance

As a medical provider, your resume and application should include most of the above information. Taking the appropriate steps will ensure accuracy and prevent delays.

5. Complete insurance carries enrollment and authorizations.

A 2021 KFF Issue Brief revealed that the vast majority (99%) of Medicare Advantage enrollees are in plans requiring prior authorization for certain services. In another 2021 survey by the American Medical Association, 88% of doctors said obtaining insurance (prior) authorization was extremely or highly burdensome. This process requires the treating physician’s submission of administrative and clinical information and sometimes even the patient, which varies depending on the insurer.

That’s why healthcare providers should be able to submit the insurance requirements for verification and authorization. It ensures that patients know their care is covered. Moreover, it helps your practice receive timely reimbursement for the services so that you can continue to provide quality care. When you complete insurance requirements, you and your patients benefit from a safe and efficient healthcare process.

6. Check the Information

As you gather the necessary documents and fill out individual applications, remember that providing accurate and high-quality information is essential. Before submitting any application, make sure to do the following:

  • Perform a background investigation.
  • Examine the history of credentialing, permissions, and insurance claims.
  • Provide a list of sanctions recorded by the Inspector General’s Office (OIG)
  • Check and monitor reports of medical incidents, malpractice claims, or other info that could affect credentialing or re-credentialing.

After you assemble and verify these documents, provide them to facility leadership so that privileges can be granted to the new provider. The credentialing application requires this information. 

7. Follow Up and Follow Through With Application 

It’s important not to wait too long for an insurer to reply. Many companies understand that quick approval is based on keeping in touch. That’s why it’s a great idea to build professional relationships with people at the insurance company. 

Furthermore, establishing a positive relationship with leaders, executive assistants, and other staff could help the application process move faster. You should call them instead of emailing them to increase your chances of hearing back.

8. Wait for Verification

After assembling and submitting your application, you must wait for the insurance company to approve it. The process can take a long time. Most credentialing processes take 90 days to complete, but experts recommend waiting 150 days.

8 Credentialing Mistakes That Drag Down Your Revenue

Managing a hectic medical practice brings its own set of obstacles. Credentialing is a complex procedure that requires a lot of attention to detail. One small mistake in the credentialing process can result in a hefty financial penalty for your practice, such as: 

1. Relying on Limited Staff and Administration.

Credentialing physicians can be tedious because it requires attention to detail, precision, and patience. You must check every certification and license before treating patients. Depending on the size of a healthcare organization, they may need to verify the employment histories and qualifications of hundreds or even thousands of doctors. This process includes education, medical training, residency, licenses, and any certifications they have in their specialism.

Indeed, it’s a huge task for a team to take on. However, if the hospital or health system needs more resources or staff, it can lead to a loss of revenue and overworked, stressed-out staff who may make mistakes.

2. Not Completing Your CAQH Enrollment

Insurance companies may be reluctant to approve your credentials if you fail to complete the CAQH enrollment. If they find any accurate or missing information, insurance payers may accept your submitted claims causing delays in reimbursements.

Furthermore, incomplete CAQH information may compromise your practice’s financial stability by delaying contracting with payers. Updating your CAQH profile every 120 days helps prevent credentialing delays. Also, insurance companies will use these profiles if they perform re-credentialing.

3. Providing treatment to patients before credentialing is complete.

If you render services before you have completed the credentialing process, you may not be able to reimburse for those services. You might not be acknowledged as a participating provider by the payers, leading to financial losses for the practice. 

This situation may also result in confusion and dissatisfaction among patients, who may need help comprehending the reason for their denied claims. It is crucial to complete the credentialing process before commencing medical services to avoid problems in billing and reimbursement.

4. No Follow-up by Your Administrative Staff

You must be aware that failing to follow up on credentialing can result in detrimental outcomes, including delayed provider enrollment, decreased provider satisfaction, lost revenue, and potential legal consequences. Your administrative staff needs to know the significance of timely and thorough credentialing processes to mitigate these risks. They must remember to prioritize following up on credentialing applications and verifications. 

5. Failing to Report Adverse Actions

Reporting adverse actions in the credentialing process is crucial to upholding professional standards. Healthcare providers and organizations are responsible for promptly reporting any harmful actions, including license revocations, disciplinary measures, or restrictions on clinical privileges, to relevant credentialing bodies. Failure to report such actions could result in disciplinary consequences for the provider and threaten patient safety. Healthcare organizations should establish a robust and efficient reporting mechanism to ensure compliance with reporting requirements and prioritize patient well-being.

6. Hurrying off Credentialing Process

Rushing through the credentialing process can lead to errors in the data submitted to insurance companies, resulting in denied claims, delayed payments, and difficulty obtaining contracts. It could also increase the risk of penalties or legal issues and a need to understand payer policies, which could cause confusion and errors. So, take the necessary time to review the credentialing process to ensure accuracy and meet regulations to avoid billing and reimbursement issues.

7. Errors With Timing and Planning

Credentialing involves verifying a large amount of data that usually takes 3-4 months to complete. The process of collecting and preparing relevant documents can take longer than expected as well. Many times, the facility’s staff needs to plan for such delays. Neither the health care provider nor the facility is spared from its effects.

It also means you must delay consultations with patients and services. At the same time, you will also lose valuable time and money in the process.

Insurance companies will only reimburse the hospital or clinic if the new practitioner is credentialed and enrolled. The common mistake in this situation is the failure to plan the estimated time for processing. Thus, your practice will suffer a revenue loss.

8. Errors in the Enrollment Process

Enrollment errors directly impact revenue cycle efficiency. To avoid revenue loss, you must be aware of the most common enrollment mistakes:

  • Non-compliance with insurance company requisites

Insurance companies establish individual policies, protocols, and regulations, which practices should consider before enrolling. Complying with the requirements without sufficient knowledge will result in many errors during enrollment.

  • Not being familiar with the local insurance providers.

Establishing connections with insurance providers is the first thing you must consider when setting up your facility. When new to the state, it gets hard to find and have good knowledge about the payer companies.

  • Neglecting to assign staff for query clarification (from the insurance company)

Insurance companies might have queries about the application or processing details even before enrollment. So, it is necessary to assign someone to suggest solutions for insurance companies. This part is vital to ensure that the entire payment process is completed on time.

Tap Into Our Expertise

A credentialing system is a set of protocols and standards that ensure patients receive specialized care from healthcare providers who have been evaluated for competency. For medical practice credentialing to go smoothly, you should divide your clinical tasks appropriately. However, we understand that managing all of it can be frustrating. So, why not let us help you?

At 5 Star Billing Services Inc, we offer the highest level of performance for high-quality medical billing and coding services. Save your money by outsourcing to a professional billing service.

Schedule a call with our experts today!

  • © 2024 5 Star Billing Services, Inc.