The ABCs of Telehealth Compliance & Privileges: Licensing & Credentialing for Telehealth Providers

Martha Adams
02 May, 2023 updated

As the healthcare industry continues to evolve, it’s more important than ever to ensure that your revenue cycle management processes are efficient and effective. One way to achieve this is through the practice of credentialing, which is the process of verifying the qualifications and experience of healthcare professionals.

Credentialing helps to maintain high standards of care, comply with regulatory requirements, and avoid potential legal risks. It also enables you to participate in various payer networks and reimbursement programs, which can boost your revenue and reputation.

In this guide, we'll explore the importance of credentialing, to give you a better understanding of how you can improve your revenue cycle management processes, and why it's important for the success of your healthcare organization.

Understanding the Basics of Revenue Cycle Management

Let’s start with the basics and explore what exactly is revenue cycle management (RCM) and why it matters before we dive deeper into the process.

RCM is managing the financial aspects of providing healthcare services, from the moment a patient schedules an appointment to the final payment of the bill. As you probably know, it involves multiple steps and tasks:

  • Scheduling and registration: collecting the patient’s demographic and insurance information, verifying eligibility and benefits, and obtaining necessary authorizations or referrals.

  • Charge capture and coding: documentation of the services provided to the patient, assigning the appropriate codes and modifiers, and generating claims for reimbursement.

  • Claim submission and follow-up: Medicare, Medicaid, or private insurers.

  • Payment posting and reconciliation: receiving and recording the payments from the payors and patients, applying adjustments or write-offs, and reconciling any discrepancies or errors.

  • Denial management and appeals: identifying and resolving any denied or rejected claims, submitting necessary appeals or corrections, and preventing future denials.

  • Patient collections and bad debt: collecting outstanding balances from the patients, such as copays, deductibles, or coinsurance, and pursuing any delinquent accounts or bad debt.

As you can see, RCM is not a simple or straightforward process. It requires a lot of expertise, and coordination to run smoothly and effectively. Yet, it is crucial to enhance the cash flow and profitability of your business, as well as the quality of care for patients.

What is Credentialing?

Another familiar burdensome process, credentialing is crucial for your business, as ensures that physicians, nurses, therapists, and other healthcare professionals have the necessary education, training, licenses, certifications, and skills to provide safe and quality care to your patients.

  • Primary source verification: checking the original sources of credentials, such as medical schools, licensing boards, certification agencies, and previous employers. Basically, the primary source verification confirms that your providers’ credentials are valid and current.

  • Provider enrollment: applying to participate in various payer networks and reimbursement programs, such as Medicare, Medicaid, and private insurance companies. As you know, it is needed to receive payments for the services you provide to your patients.

  • Privileging: granting the authority to perform specific procedures or services at a certain facility or organization. Privileging is based on the provider’s credentials, experience, and performance.

The Impact of Credentialing on Revenue Cycle Management

Credentialing is not only a legal requirement but also a strategic advantage, that helps to:

  • Maintain high standards of care and patient satisfaction

By being credentialed, you can assure your patients that you and your staff have the qualifications and experience to provide them with the best possible care. Moreover, you can offer more options and flexibility in terms of payment plans and insurance coverage.

  • Comply with federal and state regulations and accreditation standards

CMS and the Joint Commission both require that healthcare providers be credentialed. Healthcare organizations that don’t follow the CMS regulations are not eligible for Medicare or Medicaid reimbursement.

  • Avoid potential lawsuits and malpractice claims

Credentialing can help you reduce the risk of hiring unqualified or fraudulent providers who may cause harm to your patients or expose you to legal liability. Everybody remembers the case of Christopher Duntsch and a lawsuit filed against the Baylor Scott & White Medical Center-White Rock, claiming that it failed to properly vet Duntsch before granting him surgical privileges. The lawsuit resulted in a settlement, with the hospital agreeing to pay a confidential amount to the plaintiffs and revising its policies and procedures for credentialing and privileging physicians to prevent similar incidents from occurring in the future.

  • Enhance reputation and credibility

Credentialing can help providers gain recognition and respect from their peers and colleagues. This can lead to referrals, growing your client base simultaneously. Moreover, hiring respectful providers, clearly pays off, enhancing the reputation of the entire facility.

  • Manage denials and rejections better

Timely credentialing reduces the number and severity of denials and rejections that affect the revenue cycle, as you avoid the common causes: expired or invalid credentials, mismatched information, or lack of authorization. A proper credentialing process can also help resolve issues faster and more effectively as you will always have the necessary documentation and evidence on hand.

However, credentialing is a complex and time-consuming process that requires a lot of attention and expertise, especially in the context of multiple providers. That’s why many healthcare businesses choose to outsource the process to a professional service or streamline the inner management with specifically designed software, like Credsy.

The lack of proper credentialing not only increases the workload of staff but also has adverse effects on the practice's key performance indicators (KPIs). These include:

Days in Accounts Receivable (AR) – The ideal time from claim submission to closure should be 30 days, but without appropriate credentials, this timeline could increase substantially. It could take up to 21 days to receive notification of claim denial, during which time the provider could have treated numerous patients insured by the same payer, resulting in the denial of multiple claims. Fixing the denial and obtaining proper credentialing could take several months, leading to the write-off of all claims in question.

Aging Claims – Ideally, practices want to ensure that at least 75% of all claims are resolved within 60 days. However, addressing credentialing issues can take much longer, causing claims to age further. Early identification of credentialing issues and adherence to renewal timeframes can help control the practice's claim aging KPI.

Clean Claim Rate – Practices aim to obtain reimbursement on the first claim submission since denied claims result in no revenue. Claims denied for lack of credentialing are not considered clean. Ideally, practices strive for a clean claim rate of 90% or higher. However, if a practice has credentialing issues with a significant payer, a considerable number of claims will require additional work due to outdated credentials.

Best Practices for Credentialing: A Key Strategy for Effective Revenue Cycle Management

Now that we have reviewed the importance and impact of credentialing on your revenue cycle management, let’s get to understanding how to implement it effectively. Credentialing requires proper documentation and loads of record keeping, and the challenges it faces are numerous and extremely daunting at times, as well as costly. So, we will provide tips and guidelines on how to manage the credentialing process to ensure revenue cycle success.

  • Ensure proper documentation and record keeping

It is crucial to maintain accurate and up-to-date records of provider credentials as a part of the credentialing process. This includes keeping copies of various documents such as licenses, certifications, diplomas, malpractice insurance, and references, which confirm their qualifications and experience. It is also necessary to keep track of the expiration dates and renewal requirements of each credential.

To ensure the security and accessibility of these records, it is advisable to use specialized software or a cloud-based system for storage. It is equally important to update the records regularly and inform payers and facilities promptly of any changes or updates in the provider's credentials. This practice can prevent delays, denials, or audits that may impact the revenue cycle.

Read more about Why Accurate Provider Data is the Key to Stellar Healthcare & Compliance

  • Monitor and measure your credentialing performance

It is important to track and analyze key metrics and indicators that reflect your credentialing efficiency and effectiveness. Let’s take a closer look at some of them:

Credentialing cycle time: the average time it takes to complete the credentialing process for each provider or payer.

Credentialing cost: the total cost of performing the process for each provider or payer. This includes direct costs, such as fees, salaries, or software, as well as indirect costs, such as lost revenue or productivity.

Credentialing denials: the percentage of claims that are denied due to expired or invalid credentials, mismatched information, or lack of authorization.

Credentialing satisfaction: the level of satisfaction of your providers, staff, payers, and patients with your credentialing process. This is the only of the four stated metrics you should aim to increase.

Read more about Mastering the Credentialing Process: Top Mistakes to Avoid for a Seamless Journey

Educate and train your staff

You should make sure that your staff understands the credentialing requirements and regulations, as well as the roles and responsibilities of each team member involved in the process. It is necessary to provide them with the tools and resources needed to perform their tasks efficiently and effectively.

Review and update credentialing policies and procedures

To effectively manage the credentialing process, it is recommended to periodically review and revise your credentialing policies and procedures. This ensures that they align with the latest industry standards and best practices, and meet the evolving needs and expectations of your practice, providers, payers, and patients. Additionally, it is crucial to ensure that your policies and procedures are transparent, uniform, and in compliance with the relevant laws and regulations.

Outsource your credentialing

One of the easiest and most efficient best practices of how to effectively manage the credentialing process for healthcare organizations is outsourcing. It can save time, money, and hassle, as well as improve revenue cycle performance. The key benefits include expertise, specifically trained staff, accuracy, and speed.

The Secret to Effective Revenue Cycle Management: Technology-Enabled Credentialing

Technology can play a crucial role in optimizing revenue cycle management, as it can automate, streamline, and optimize the credentialing process, resulting in enhanced performance and outcomes.

Credentialing software

This is a type of software that helps you manage the credentialing process for all your providers and payers. Credentialing software can help with collecting, verifying, storing, updating, and submitting required information and documents. Another significant benefit is automated tracking of credentialing status, renewals, and expirations. Software like Credsy is built to alert your staff of any upcoming credential-related event, to ensure you are never late on any of the many deadlines. Credentialing software can also integrate with other systems, such as EHRs, practice management software, or billing software, to facilitate data exchange and workflow automation.

Revenue cycle management (RCM) software

RCM Software is built to manage the financial aspects of your practice, such as coding, billing, collecting, and reporting. It can help with generating, submitting, and tracking claims, resolving denials, posting payments, managing accounts receivable, and generating reports. Revenue cycle management software can also be integrated into existing systems, such as EHRs, practice management software, or credentialing software.

Data analytics software

The key benefit of data analytics software is that it analyzes and visualizes credentialing and RCM data, making it easy to measure and monitor performance metrics and indicators, identify trends and patterns, discover insights and opportunities for improvement, and make informed decisions and data-based actions.

Benefits of technology for credentialing and revenue cycle management

  • Time and cost savings

Automating and streamlining the credentialing and revenue cycle processes result in reduced manual work, which inevitably leads to reduced errors, delays, rework, duplication, or waste in the processes. Technological solutions help to avoid denials or rejections that may affect your revenue cycle.

The MGMA Stat poll, conducted on August 2021, found that more than half (54%) of medical practices report denials related to provider credentialing have increased thus far in 2021, while 41% say they have stayed the same and only 5% note these denials have decreased that year. It also identified some of the common reasons for these denials, such as long delays, lack of communication, changing requirements, closed networks, and discrepancies.

  • Quality and accuracy

The software can ensure that your credentialing information and documents are accurate, complete, and up-to-date without involving human labor. The technology verifies and validates credentials with the primary sources and payers and follows up with them regularly. It can also ensure that your claims are coded, billed, and submitted correctly and timely to the appropriate payers, resolving denials or rejections faster and more effectively.

  • Compliance and security

Federal and state laws and accreditation standards compliance along with credentialing data and records protection from unauthorized access or misuse is another way your organization can benefit from modern solutions.

According to a report by the Protenus Breach Barometer, over 59 million patient records were breached, and more than 900 incidents were reported in 2022. This alarming trend was also reflected in IBM Security and Ponemon Institute’s yearly survey, the “Cost of a Data Breach Report”: in the 2021 breach report, it was determined that 2020 healthcare data breaches cost organizations USD 2 million to USD 9.42 million per incident. Moreover, the 2022 research stated that healthcare breach costs hit a new record high — with the average breach in healthcare increasing by nearly USD 1 million to reach USD 10.10 million. Healthcare breach costs have been the most expensive industry for 12 years running, increasing by 41.6% since the 2020 report.

Tech Solutions for Credentialing: How to Choose the Right One for Your Organization

Choosing a technology solution for your practice is a big decision, and it can have a huge impact on your credentialing and revenue cycle management processes. The software can offer you many benefits, but only if you choose the right solution for your needs, goals, and budget. You need to be careful and informed before making a choice. To help you choose the best technology solution for your practice, we will highlight some of the factors you need to pay attention to.

  • Functionality

Think about what tasks and functions you need a technology solution to do for your credentialing and revenue cycle management processes. You should choose a solution that can handle your specific needs and requirements. Also, make sure it can work well with other systems that you use for your practice, such as EHRs, practice management software, or billing software.

  • Usability

You need a technology solution that is easy to use for your credentialing and revenue cycle management processes. Look for a solution that has a user-friendly interface, intuitive features, and clear instructions. Also, check if it has a responsive customer support team that can assist you with any issues or questions that you may have.

  • Reliability

The reliability of a technology solution is another key consideration. You should find a solution that has high uptime, low downtime, fast speed, and minimal errors. Also, ensure that it has a regular backup, update, and maintenance schedule that can ensure its optimal performance.

  • Scalability

Look for a technology that can grow along with your practice, allowing you to add more providers, payers, facilities, or patients. Make sure, that the software you stick to can adapt to the ever-changing needs and expectations of your practice, providers, payers, or patients.

  • Affordability

Fitting your budget is no less important, your perfect solution should offer a good return on investment. Consider those with a transparent and flexible pricing model that suits your preferences and requirements.

How Credsy Can Transform Your Credentialing and Revenue Cycle Management

In addition to all of the above, our credentialing software Credsy provides customers with:

  • Quick turnaround times: no delays, we’ll license all your providers as quickly as possible.
  • Zero paperwork: we fill out, submit, and track your credentialing applications. Credsy also provides a reliable, secure, and easily accessible cloud-based system to store all your data.
  • No hassle: we provide a dedicated account manager who assists you with any questions or issues that you may have. 24/7

Credsy offers a range of services to assist with various aspects of credentialing, including collecting, verifying, storing, updating, and submitting credentialing information and documents. The platform also tracks credentialing status, renewals, expirations, and alerts, and helps coordinate with government and commercial payers and facilities.

As for the RCM, with our done-for-you services and proprietary software you will forget about denials and rejections and increase your revenue potential by joining various payer networks and reimbursement programs. Our expertise, backed by over 8 years of excellence, guarantees compliance with all the federal and state laws and accreditation standards that govern your practice.

Join over 16,000 healthcare professionals who trust us with their licensing and credentialing needs. With our solution, you can save 93% of your time and get licensed and credentialed 80% faster.

FAQs about Credentialing and Revenue Cycle Management:

What is the difference between credentialing and privileging?

Credentialing is the process of verifying a healthcare provider's education, training, licensure, and professional experience. Privileging refers to the specific clinical activities and procedures that a healthcare provider is authorized to perform based on their credentials.

How can credentialing help to reduce compliance risks?

Credentialing helps healthcare providers comply with regulatory requirements, such as those set by the Centers for Medicare and Medicaid Services (CMS), the Joint Commission, and other accrediting bodies. By maintaining accurate and up-to-date credentials, providers can avoid compliance risks and potential legal or financial penalties.

What are the common challenges faced in the credentialing process?

Common challenges in the Credentialing process include lengthy application processes, difficulty obtaining and verifying documentation, incomplete or inaccurate data, and delays in obtaining hospital privileges or insurance reimbursements.

How can technology improve credentialing?

Technology can improve the Credentialing process by automating data collection and verification, storing and tracking credentialing information in a secure and accessible manner, and providing real-time updates and alerts for credentialing status, expirations, and renewals. This can help reduce administrative burden and improve the efficiency and accuracy of the Credentialing process.

What are the benefits of outsourcing credentialing services to a third-party vendor?

Outsourcing credentialing services to a third-party vendor can save time and resources, reduce administrative burdens, and improve accuracy and compliance. It can also provide access to expert knowledge and technology, and help healthcare providers focus on delivering quality patient care.

How long does the credentialing process usually take?

The duration of the credentialing process can vary depending on the provider's qualifications, the number of payers and facilities they work with, and the efficiency of the credentialing process. Typically, it can take several weeks to several months to complete the credentialing process.

How does credentialing impact the revenue cycle management process?

Credentialing plays a critical role in revenue cycle management (RCM) as it ensures that providers have the necessary qualifications and credentials to participate in healthcare networks and receive reimbursement for their services. Without proper credentialing, claims can be denied or delayed, resulting in a negative impact on cash flow and revenue. Effective credentialing can help streamline the RCM process and ensure timely reimbursement, ultimately improving the financial health of a healthcare organization.

What are the benefits of integrating credentialing into the revenue cycle management workflow?

Integrating credentialing into the RCM workflow can have several benefits, including improving the accuracy and completeness of patient billing and claims, reducing denials and delays, and enhancing revenue cycle efficiency. By ensuring that providers are properly credentialed and privileges are up-to-date, organizations can optimize their RCM process and improve the overall financial health of the practice.

What are some common credentialing mistakes that can impact revenue cycle management?

Common credentialing mistakes that can impact revenue cycle management include failure to keep credentials up to date, incomplete or inaccurate documentation, delayed credentialing processes, and failure to notify payers and facilities of changes or updates in credentials.

What are the credentialing requirements for Medicare and Medicaid participation?

To participate in Medicare and Medicaid, healthcare providers must meet certain credentialing requirements, including having a valid medical license, completing a criminal background check, and meeting certain education and training requirements. Providers must also comply with the Provider Enrollment, Chain, and Ownership System (PECOS) and the National Plan and Provider Enumeration System (NPPES).

What are some best practices for maintaining accurate and up-to-date provider credentials?

Best practices for maintaining accurate and up-to-date provider credentials include regularly reviewing and updating credentialing policies and procedures, using technology to automate data collection and verification, and ensuring timely notification of changes or updates in provider credentials to payers and facilities. It is also important to monitor credential expiration dates and renewal requirements and to maintain complete and accurate credentialing documentation.

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