The U.S. healthcare sector allocates a staggering $800 billion each year to administrative costs. In this high-stakes environment, enhancing efficiency in enrollment and credentialing is essential for the financial health of the system.
This year, the push to integrate providers with insurance networks and accelerate patient care has intensified. The 2024 State of Payer Enrollment and Credentialing Report reveals that 46% of healthcare professionals have observed a dip in revenue, a consequence of sluggish workflows and prolonged processing times that plague their institutions.
At the heart of these administrative challenges is the management of provider information.
The credentialing process, in particular, is notoriously burdensome and fraught with errors, stretching the capacity of providers and staff who are already at their limits. What's more, the payer enrollment phase remains predominantly manual and reliant on outdated paper-based systems, squandering up to $2 billion annually in administrative expenses.
There is a pressing need to overhaul how data-related administrative tasks are handled. By streamlining these processes, we not only stand to enhance patient care but also achieve considerable financial returns for providers. It's clear that the healthcare sector must adopt more effective data management strategies, propelled by streamlined and integrated processes, to meet these challenges head-on.
What is provider credentialing?
Provider credentialing is an essential, multi-step process that assesses and confirms the qualifications of licensed or certified healthcare providers. This process must be completed before a healthcare institution or payer initiates any professional engagement with a clinician. Both the Centers for Medicare & Medicaid Services (CMS) and the Joint Commission on Accreditation of Healthcare Organizations mandate thorough credentialing.
During credentialing, an organization follows a set of established guidelines to meticulously review a healthcare provider’s educational background, certifications, and professional history. Think of it as an exhaustive background check designed to ensure that patients receive care from highly qualified providers. The typical credentialing process involves:
- Gathering at least 15 specific data points from each provider.
- Engaging in manual, paper-based exchanges of data between providers and payers.
- A review period that ranges from 90 to 180 days.
- Regular updates every 1 to 3 years are needed to maintain current relationships and validate new ones.
The importance of provider credentialing
Credentialing is vital for maintaining high standards of patient care and safety. It verifies that healthcare providers are properly trained, licensed, and capable of practicing medicine safely. Additionally, it offers a layer of liability protection for healthcare institutions and payers.
Just as critical is the process of re-credentialing, which must be repeated every few years to ensure all provider credentials are current, thus maintaining a consistent standard of care.
Over the last two decades, the credentialing process has grown more complex and time-intensive, reflecting broader scopes of practice, an increase in regulatory requirements from various accrediting bodies, and the demands of third-party payers like Medicare and Medicaid. Moreover, widespread staffing shortages are exacerbating delays and hindering progress within the healthcare sector. Credentialing rules also vary by state, complicating the process for providers who move or are licensed in multiple states.
Regrettably, much of the credentialing process remains paper-based, leading to inefficiencies where outdated, missing, or incomplete provider information can stall the credentialing process for days or even weeks, preventing providers from seeing patients. These inefficiencies cause substantial delays and financial losses within the healthcare system, underscoring the urgent need for streamlined, digital solutions.
The three steps of provider credentialing
The three core steps of provider credentialing are vital in ensuring that healthcare providers meet the necessary standards before they treat patients. Here's a breakdown of each step:
- Primary Source Verification (PSV)
This is the initial phase where a healthcare organization collects and verifies a clinician's qualifications to confirm their legitimacy. This step includes gathering evidence of residency and internship completions, academic records from undergraduate and graduate studies, board certifications, state licenses, and a comprehensive review of the clinician's practice history. PSV can be conducted through various means such as direct contact, phone verification, secure electronic checks directly from the source, or through reports from Credential Verification Organizations (CVOs) that adhere to the Joint Commission's standards.
- Privileging
Once a clinician passes the PSV, they must be granted privileges by the healthcare institution. This process authorizes the clinician to perform specific medical services within the institution. It's like giving a new user access to certain features in a software system; in this case, the system is the healthcare facility. Privileging is essential and must be completed before the clinician can start providing any medical services.
- Payer Enrollment
This final step establishes the formal relationship between the clinician and third-party payers, such as insurance companies. It involves verifying the clinician's identity and qualifications to ensure they meet the payer's standards. The clinician must be enrolled successfully with the payer before they can start billing for their services. Despite appearing straightforward, this process involves filling out numerous forms and navigating through various procedures set by different payers, which can vary significantly. This variance often leads to potential errors and delays in approval, making it a crucial point for careful attention to detail.
Each of these steps is interconnected, requiring accuracy and meticulous attention to detail to ensure there are no delays or issues in getting a clinician onboarded and ready to provide care.
Payer enrollment process
When a provider begins the credentialing process as a new clinician, they must supply at least 15 data elements, including contact information, National Provider Identifications (NPIs), and primary practice locations.
Before initiating the formal paperwork, providers typically reach out to payers to confirm the possibility of credentialing. If the payer panel is open to new clinicians, the provider is notified about the necessary documentation required for enrollment.
Next, the provider manually completes various forms. On average, a single provider will need to fill out and submit 25 different forms for 25 different payers, each requiring the same information but formatted differently.
Once the forms are completed, the provider physically signs, prints, and either faxes or mails them to the payer.
A review period of 90 to 180 days follows, during which the provider's staff may frequently follow up by phone. Unfortunately, many payers lack a digital portal or email system for updates, leading to potential delays. During this time, the clinician cannot perform or bill for any services.
Payers conduct their own verification checks to ensure due diligence. This verification process often relies on paper forms or spreadsheets, which, despite being more reliable than older methods, still raise significant concerns regarding security, privacy, and efficiency. Sometimes, this step is even outsourced to other companies that continue to use manual, paper-based systems, adding complexity and increasing the risk of errors. If any discrepancies are found, the provider must resolve these issues, often restarting the process.
Once the payer verifies the information and the application meets all criteria, the provider is officially considered "in-network."
This cycle is repeated every one to three years, as mandated by the National Committee for Quality Assurance (NCQA), which suggests re-credentialing every two years to maintain standards and prevent errors.
Credentialing responsibilities fall on both healthcare institutions and payers. In larger organizations, a credentialing specialist or the Medical Staff Office (MSO) usually manages this process. Due to the prolonged nature of these tasks and current staff shortages, many institutions opt to outsource this function to Credentials Verification Organizations (CVOs). Collaborating with a CVO can be cost-effective and ensures the accuracy and reliability of the credentialing process.
Challenges with payer enrollment
The payer enrollment process alone racks up costs between $2.1 to $2.3 billion annually, burdening payers, providers, and ultimately patients. A more streamlined enrollment solution could cut these costs by up to 75%, benefiting everyone involved by making the whole process more efficient.
- Challenges with Data Fragmentation: During payer enrollment, data about providers is constantly being pulled and checked from various sources. This fragmented data scenario means there isn’t a single reliable source, complicating the verification process.
- Unclear Ownership: The confusion over who exactly manages and owns the data only adds to the challenges. In larger organizations, Medical Staff Offices (MSO) or Centralized Verification Offices (CVO) manage this. Smaller entities might depend on dedicated credentialing staff or just use their admin personnel. On the payer side, the tasks of gathering, verifying, compiling, and cleansing data are often scattered across different departments, leading to duplicated efforts and increasing the chance of mistakes.
- Manual Processes: The predominant reliance on manual handling of vast amounts of data magnifies the risk of errors, added costs, and process delays. Many procedures still require providers to physically sign forms, which they must then scan and upload again, posing risks of poor quality scans or even lost documents.
- Data Inconsistencies: When provider data—like a change of address—needs updating, it must be promptly communicated to payers. If not, it jeopardizes the provider's ability to perform services as it could lead to denied authorizations or claims. With provider data reportedly changing 2% to 2.5% monthly, the constant need to update information invites more chances for error.
Despite its background role, effective management of provider data is crucial. It underpins vital healthcare processes like credentialing, network participation, and payment systems. Poor management of this data often results in costly mistakes in claims processing, unnecessarily adding nearly $17 billion to healthcare costs each year.
Solid data management practices ensure quick credentialing and smooth network participation, setting the stage for timely payments to providers. A well-structured provider data management system is essential, as it supports efficient operations and successful interactions between providers and payers, forming the backbone of a functional healthcare system.
The pivot to automation in payer enrollment and credentialing
Thirty percent of payer enrollment teams identify gathering provider requirements as their primary hurdle, and 40% operate with predominantly manual workflows. This leads to excessively long timelines for processing claims and issuing reimbursements—often taking between 90 to 120 days. Similarly, in credentialing, about a quarter of teams find that obtaining necessary details from health plans is their biggest challenge, with more than half relying entirely on manual methods. This includes collecting a variety of provider-related information like educational background, work history, and certifications. Such manual processes can stretch credentialing end-to-end turnaround times to 15 days or more, straining resources and delaying the delivery of healthcare, ultimately affecting patient care and hitting organizational revenue hard.
Despite these hurdles, there's a growing sense of optimism about the promise of automation among healthcare professionals. Over half are now prioritizing it to streamline routine tasks within the year, recognizing the potential of automation and artificial intelligence to revolutionize healthcare delivery while maintaining human oversight for complex decisions.
Healthcare organizations can immediately benefit from automation in several key ways:
- Cutting Back on Manual Labor: By implementing solutions that streamline enrollment and credentialing processes, organizations can save significant time and resources.
- Standardizing Processes: Automation helps eliminate variability and delays, standardizing procedures to ensure consistency and efficiency.
- Enhancing Workflow Efficiency: Automated systems create seamless workflows, opening up revenue opportunities and boosting operational effectiveness.
Addressing credentialing challenges with automation:
- Scattered Information: Credentialing teams often deal with information dispersed across various platforms, leading to significant inefficiencies and potential for error. An automated system centralizes data in a secure, online hub, ensuring all provider information is accurate, up-to-date, and accessible in real-time, greatly simplifying data exchanges.
- Outdated Data: In healthcare, where data is highly time-sensitive, outdated information can pose serious risks. Automated credentialing systems ensure continuous updates from primary sources and alert providers and institutions about expiring licenses to facilitate timely renewals.
- Preparation for Audits: Manual preparations for audits can be cumbersome and error-prone. Automation streamlines this by maintaining organized, easily accessible records that are always audit-ready, meeting stringent accreditation standards.
Streamlining the credentialing process
Automation is revolutionizing the credentialing process in healthcare. With state-of-the-art software leading the charge, facilities are seeing faster completions of credentialing, privileging, and payer enrollment, which not only grants quicker patient access but also shields revenue streams from potential disruptions.
- Configurable Workflows: Today's credentialing systems provide the flexibility to customize workflows to meet the specific demands of your organization, creating a dependable, scalable, and repeatable process.
- Data Collection and Verification: Leveraging advanced credentialing software minimizes redundant tasks and unnecessary communications. Providers can directly upload documents, autofill forms, and sign digitally—complying with eSignature regulations, SSL encryption standards, and HIPAA guidelines. Additionally, the automation of primary source verifications for items like state licenses and federal DEA numbers enhances the accuracy of data and saves valuable time. These improvements not only reduce the burden on credentialing teams but also improve the overall experience for healthcare providers from the start.
- Monitoring and Reporting: Utilizing dashboards for tracking, along with customizable alerts and detailed reports, gives you a live view of the status of credentialing, privileging, and payer enrollment activities. Automatic notifications for upcoming expirations, re-appointments, and necessary payer re-credentialing keep your organization on track and fully compliant, ensuring that you capitalize on every opportunity for complete reimbursement.
Selecting the right credentialing software is a pivotal decision for any healthcare organization. Understanding how to choose the best software requires considering various factors, all detailed in our guide on choosing the best healthcare credentialing software.
Is it time to overhaul your credentialing process?
At Credsy, we tackle the cumbersome manual processes head-on, enhancing data precision, boosting compliance, and speeding up the realization of revenues. By transitioning to our platform, you position your organization to lead in the modern healthcare administrative landscape.
Connect with us to move towards an automated credentialing system that places your organization at the forefront of healthcare innovation.