Why financial sustainability starts with effective provider credentialing and enrollment (and how to achieve it)

While today’s healthcare organizations come in all shapes and sizes (e.g., critical access hospitals, rural hospitals, urban hospitals, physician practices, and more), there are at least two fundamental commonalities: Providers must meet specific qualifications and standards to treat patients, and providers must register with payers to receive reimbursement. When streamlined, these commonalities, known as provider credentialing and enrollment, promote the following:

• Decreased costs

• Enhanced patient safety and care quality

• Improved patient access

• Improved revenue integrity and revenue cycle management

• Increased provider satisfaction and retention

• Strategic growth

“Recruiting and retaining top clinical talent is paramount for today’s healthcare organizations,” says Pat Atwal, chief executive officer at InlandRCM. “Providers are looking for a ‘white glove’ onboarding experience. In addition, hospitals and physician practices are looking for ways to improve care quality and access, prevent denials, and reduce the administrative burden that accounts for approximately 15 to 25 percent of national healthcare expenditures. Prioritizing provider credentialing and enrollment accomplishes all of this and more.”

Credentialing and payer enrollment challenges

Unfortunately, many healthcare organizations struggle to establish and maintain efficient provider credentialing and enrollment processes. One reason is staffing shortages. Seventy-five percent of organizations say they struggle to find credentialing and enrollment staff with requisite experience and skills, according to a recent survey. Another reason for inefficiencies? Manual, paper-based workflows and checklist for credentialing providers. Finally, only 67% of healthcare organizations track their credentialing timelines, meaning many may not even be aware of efficiency problems lurking beneath the surface.  

When healthcare organizations don’t invest properly in their credentialing and payer enrollment processes, there’s a direct negative impact on the bottom line. More specifically, organizations run the risk of revenue loss associated with the following:

• Patient leakage due to poor access.

• Provider turnover. The cost to replace a single physician could be at least $1.3 million, according to a recent study.

• Inability to bill for services. According to recent data, healthcare organizations lose $10K in new revenue per provider per day when there’s a delay in the onboarding process. Organizations also experience revenue loss when existing providers aren’t re-credentialed and re-enrolled in a timely manner.

• Negligent credentialing verdicts. For example, this $3 million negligence verdict occurred after a botched surgery led to the discovery that a hospital failed to follow its own bylaws in credentialing a neurosurgeon who had not completed a full residency program.

“Revenue and financial performance are directly tied to provider credentialing and enrollment, which is why hospital CFOs and others need to pay more attention to both of these processes,” says Atwal.

Laying the foundation for financial sustainability

The good news is that there are ways to address these credentialing and payer enrollment challenges to promote optimized revenue cycle management. Consider the following three strategies:

1. Elevate credentialing and payer enrollment within the organization. When healthcare leaders understand the importance of provider credentialing and enrollment—particularly how it affects financial sustainability—it becomes easier to invest in the people, processes, and technology necessary to effect change. Executive level support for appointing quality providers is paramount.

2. Ensure sufficient staffing. Keep in mind that persistent healthcare staffing shortages—particularly in rural areas—may necessitate outsource vendor partnerships to ensure adequate coverage. This is especially true during times of strategic growth when organizations must ramp up credentialing and enrollment efforts to accommodate mergers and acquisitions. Outsource vendors supply a continuous pipeline of talent with a deep understanding of provider credentialing requirements by state, including specialty- and service-line specific medical staff bylaws, rules, and regulations. With vendor partnerships, organizations also save money on recruitment costs as well as costs associated with ongoing training.

3. Invest in technology. The goal is to automate as many functions as possible and shift the provider credentialing and enrollment process to a paperless environment. Why? Electronic credentialing and payer enrollment allows organizations to:

• Adhere to a best practice checklist for credentialing providers.

• Partner with providers who can enter and update their own information.

• Provide visibility into the number of providers who are currently credentialed and enrolled as well as those who are new and pending.

• Set up alerts to identify re-enrollment and re-credentialing deadlines proactively.

• Stay on top of ever-evolving provider credentialing requirements by state.

• Use electronic signatures to streamline prime source verification and other steps in the provider credentialing and enrollment process.

Looking ahead

Provider credentialing and enrollment plays a critical role in overall operational effectiveness and financial sustainability. Giving this process the attention and resources it deserves helps organizations achieve strategic goals, improve revenue cycle management, and continue to provide high-quality patient care. Learn how InlandRCM can help.