Payers and Health Systems Tap Technology to Solve Provider Credentialing Problems

Provider credentialing has been reported to cost health systems, payers, and physicians over $2.1B annually. Encompassing initial credentialing and re-credentialing, entails the process of establishing, tracking, and validating qualifications for licensed medical professionals, including physicians, and assuring their fitness for caring for patients – clinically, personally, and professionally. We cover what provider or medical credentialing is, what common problems make it costlier and less efficient, and what technologies health plans and health systems are implementing to reduce the burden on clinicians and revenue cycle management.

Credentialing-Provider Credentialing

What is Provider Credentialing?

It has several names — medical credentialing, insurance credentialing, and provider enrollment — and mostly overlapping processes. While federally mandated, credentialing lacks national standards. Yet, it is the system for vetting medical professionals and providing safe, high-quality medical care.

Providers, including allopathic and osteopathic physicians, dentists, rehabilitation therapists, and other types of clinicians and medical providers, must secure and maintain current credentials. Care delivery organizations must be re-certified every two years and health plans every three years. During interim years, professionals must maintain good standing, licenses, certifications, and clearances with their specialty or government oversight entities.


Types of Provider Credentialing

There are two types of provider credentialing. Health plans conduct insurance credentialing to enroll physicians and other clinicians, verify their education, training, and professional experience, as well as meet internal requirements for serving as an in-network provider on their panel. This is a separate process from contracting, which determines fees and terms.

Hospital or health system credentialing is conducted by healthcare organizations that bill for medical services. They use credentialing to gather similar information to determine clinical privileges and enroll providers into payer panels, which is required for the organization to be reimbursed by payers for services delivered to patients. 

Insurance Credentialing

There are three main categories of insurance providers – government payers, CAQH payers, and non-CAQH payers. The Council for Affordable Quality Healthcare (CAQH) is a nonprofit organization that establishes standards and offers tools to support the insurance credentialing process for commercial payers. Credentialing with Medicare and Medicaid is typically carried out through CMS’ Provider Enrollment, Chain, and Ownership System (PECOS). State-based government payers, however, have individual credentialing processes and systems similar to PECOS.

Hospital & Health System Credentialing

While clinicians who are not employed by a hospital or health system must handle much more of their own credentialing, physicians on staff typically receive institutional support for their credentialing.

Credentialing-Revenue Cycle

Provider Credentialing is Critical to Revenue and Overly Burdensome

Provider credentialing is a critical first step in an institution’s revenue cycle. Each of their providers is set up with every health plan they service so that payers can meet their contractual obligations, accurately bill patients, and reimburse provider organizations. However, this important process is wrought with a host of challenges that make it costly, inaccurate, and inefficient, which puts its safety, finances, and patient-member experiences at risk.

Provider Credentialing is Costly

One source quantified that a single initial credentialing process costs an organization between $500 -$1,400 or more. However, payer enrollment costs an additional $2,000-$3,600 or more. Considering that one physician will likely need to be enrolled and credentialed with 10-20 health plans, the costs mount on both sides.

Before the pandemic, hospitals and health systems may have looked at the costs of provider credentialing as a sunk cost that can’t be controlled. Since the pandemic, many provider organizations have assessed the cost and processes surrounding every aspect of care delivery and revenue cycle management.  

Provider Credentialing is Inefficient

The time required to submit initial provider applications for one physician to five health plans is estimated to take 35 hours of staff and physician time and 90 or more days to complete. And, depending on the payer, credentialing for a newly contracted clinician can take four to six months from recruitment, appointment, and enrollment. Half of that time can be attributed to the credentialing portion alone.

Also, it’s estimated that 85 percent of provider applications are incomplete when submitted, which causes waste, requires a large amount of rework, and delays billing and reimbursement. The cost of this delay is great. In a hospital setting, each day that the organization cannot bill for a physician, costs, on average, $9,000 in net revenue forfeited.

Provider Credentialing Depends on Accuracy

CMS reports that over half of credentialing paperwork reviewed from provider offices contained at least one error. For a health plan, those errors have the potential to create penalties up to $25,000 per day per beneficiary.

Provider Credentialing Impacts Physician & Staff Burnout & Consumer Experience

The dark side of provider credentialing is that the problems of inefficiency and inaccuracy significantly degrades satisfaction for staff, clinicians, and consumers. Consider the amount of time that one physician has to spend when they may be with 20 health plans and may have to handle requests manually with each plan and health system.

Patient and member experience and satisfaction can be greatly affected when they are invoiced by a health system for a physician that was supposed to be in-network. Plus, payers are required to provide web-based provider directories listing all in-network providers for their plans. Yet, most health plans have inaccurate, old, or missing provider information in their directories because they rely on providers to maintain current information.


What Technologies are Payers and Health Systems Using to Solve Credentialing Problems?

There are obvious challenges in this space, and some point to a lack of significant innovation over the last two decades. Even today, using faxes, phone calls, and email is common. And, since the exponential and accelerated adoption of telemedicine nationally during COVID-19 stay-at-home orders, provider credentialing workloads have grown in kind. It’s time to transform every aspect of provider management, including credentialing. Here are two technologies creating a positive impact on cost, efficiency, accuracy, and satisfaction.

Intelligent Automation and Robotic Process Automation

Credentialing is a tedious process and requires accessing and verifying various types of information sources. Automation technology is helpful to streamline the organization of the process workflow and other areas, including communication with payers and physicians, data entry into multiple software programs, and data entry into documents and email. Countless actions and steps in the process could be wholly or partially automated through assisted or non-assisted automation. Even aspects of auditing, reporting, and security can be safely automated. The value of automation is that it adds a layer of verification to reduce inaccuracies and improve efficiency by taking away arduous and repetitive tasks so that credentialing managers can focus on tasks that require discernment and personal follow-up.

Blockchain & Distributed Ledger Technology (DLT)

While provider data security is critical, it doesn’t have the same regulatory constraints as a patient’s personal health information (PHI). Blockchain technology is an appropriate match for improving the efficiency, accuracy, and security of provider credentialing. As a type of DLT, blockchain transactions are recorded with an unchangeable cryptographic signature. Deploying blockchain enables networks to have greater trust and transparency because providers can control their data and permit access to payers, health systems, and data repositories. Blockchain’s goal is to create one record that can be traced and audited while not requiring any entity to host the data and the flexibility to grow as large as needed.

Streamline & Decrease the Cost of Provider Credentialing

Technology will be vital to improving the efficiency and accuracy of provider credentialing while decreasing cost and the burden placed on clinicians and healthcare staff. Explore our case study where we helped a client reduce the cost of license verification by 30 percent.

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