Medical insurance credentialing 101: Everything you need to know to avoid losing money and clients

Accurate and timely medical insurance credentialing is essential for practices to get paid by insurance companies. It’s complicated, time-consuming, and can cost you hundreds of thousands of dollars in lost revenue if you get it wrong. 

In this article, we spoke with Jody Maggard, National Sales Director at TriZetto Provider Solutions, to explain how to get credentialing right the first time — and make sure you receive every dollar your practice earns.

Credentialing is like a job application. It’s the way insurance companies verify that medical providers are legitimate and qualified to receive reimbursement for services provided. When a provider is credentialed with a given payer, they can bill the payer directly and receive reimbursement.

Every practice that wants to bill an insurance company needs to be credentialed. This includes hospitals, clinics, physicians, chiropractors, dentists, physical therapists, behavioral health therapists, occupational therapists, optometrists, and social workers. 

“In network” means that a provider is currently credentialed with a given insurance company, and is eligible to submit claims for reimbursement.

No. They are two separate steps. Credentialing comes first. Once credentialed, a practice can enroll with a clearinghouse to submit insurance claims electronically.

It’s not a difficult process. However, it is very complicated and time-consuming. A single application to a single payer typically takes 20 hours or more. Every state has different requirements. So does every payer. Specialties can require unique documentation as well. All of these variables make it easy to miss a step, or attach the wrong version of a document, or otherwise make a mistakes.

Even the tiniest error in the credentialing process leads to claims being rejected by the payer, which means major delays in the provider’s revenue stream. Timing is everything. Sometimes missing a submission window results in the provider not being paid at all.

Providers have between 30 and 90 days after the day of service to submit a claim, depending on state and payer. Payers then have 90 to 120 days to pay on that claim. If the claim is rejected and then resubmitted, the waiting period starts all over again. But the payer’s 90-day clock does not reset if a claim is denied.

Providers could be faced with timely filing issues if they see patients when they are not credentialed properly with payers. Payers will not process claims that occur when the provider is not credentialed. Time can easily run out, and the provider will never be paid for work done.

Unfortunately, no. Commercial payers like Kaiser Permanente and United Healthcare require recredentialing every 1 to 3 years, depending on your area of practice. Medicare requires it every 3 to 5 years. 

If your practice has many payers, they will all demand reapplication on different dates. Re-credentialing can be just as time-consuming as getting approved in the first place.

The biggest problem for many practices is that they drop the ball and forget about revalidation. They don’t realize what’s wrong until they start getting denials. By that time, it’s too late to refile.

A major payer like Medicare or United Healthcare might comprise a significant percentage of a practice’s revenue. If most of your claims are held up for 3 months or more, you might not have enough revenue to keep your doors open. You could even be forced to stop seeing clients until the issue gets resolved. The average denial from a large payer costs the provider a staggering $10,000 a day.

One clinic recently was denied by Blue Cross Blue Shield, their largest payer, due to a minor administrative mix-up. This caused them to lose $100,000 a month. 

They had to terminate their contract with their billing company, and make other painful financial adjustments. By the time they turned to a credentialing service, they were out $350,000 — all because of one missed piece of paperwork. Fortunately, the credentialing service helped them get back on track.

On the other hand, they were not able to recover the lost revenue because filing deadlines had passed. Their example illustrates how important it is to dot every “i” and cross every “t”.

Medical practices typically assign one person to handle the credentialing process, which includes gathering about 20 different documents, ensuring that the data is accurate, and submitting it to various payers one at a time. 

This person would ideally be responsible for recredentialing in following years. But if the person leaves, is reassigned, or even just gets too busy and forgets about credentialing, organizational knowledge is lost and deadlines are missed.

That’s why many practices choose to use credentialing software, or outsource tasks to a billing company that offers this service. Outsourcing to a credentialing services is one of the simplest ways to manage the process.

Credentialing software is expensive, making it out of the reach for most small practices. Although mostly limited to tracking features, users complain that the software is hard to figure out. You might fail to set it correctly, and miss the recredentialing window, for example.

Some larger billing companies now offer credentialing as an add-on service, but it is not their main business. They may (or may not) have the in-house expertise as a dedicated credentialing vendor.

A credentialing service, on the other hand, is entirely focused on credentialing. Its employees are experts and gives providers an online portal to streamline the submission process. Documentation is stored in a secure data repository that is HIPAA compliant. It works with all payers in all states, and has experience with all specialties.

A reputable service will conduct payer discovery calls as its first item of business for a client, checking on a provider’s credentialing status. Calls must be made separately for each payer and each provider. Staffers typically wait on hold for at least 50 minutes to get through to a payer, something that providers’ office staffers don’t have the luxury of doing. A reputable service will also notify clients when recredentialing dates are approaching, so that deadlines are never missed.

The pandemic transformed the healthcare landscape, especially in behavioral health. Vast numbers of new patients wanted treatment, and demanded that providers accept insurance. Before, smaller clinics could get away with cash-only services. Suddenly, they had to become credentialed to meet a very real medical need, and they didn’t know how to go about it.

Another major change in credentialing requirements has been in telehealth. Prior to the pandemic, not that many practices offered telehealth services, and therefore didn’t have procedures in place for billing. Then almost overnight, telehealth became ubiquitous and payers instituted new requirements. These differed from payer to payer, and could be very confusing.

Furthermore, telehealth has allowed behavioral health providers to see more patients in a day, taking up time that otherwise might have been used for a small provider to do their own billing or manage credentialing. Counselors have really had to scramble to find a solution.

Currently behavioral health, durable medical goods, ophthalmology/optometry, and PT/OT are the most labor-intensive specialties for credentialing. Telehealth services across the board are also particularly complicated – and are constantly changing in this quickly evolving environment.

Easy. Let’s say that your staff forgot to re-credential, and all of your claims are being denied. It takes 3 to 4 months for recertification. During that time, you have only 2 very poor options. You can see patients for free until you are certified again. That results in an enormous loss in income. Or you can close your doors for a while, turning away patients. You can’t blame them for going elsewhere for treatment. Who knows when (or if) they’ll ever return?

First and foremost, apply for credentialing immediately to ALL of your intended payers, long before you see your first patient. That way you will ensure being paid for patient visits. Secondly, don’t assume that your staff will get it right. A detail that might seem unimportant could hold up your approval for months. Either double- and triple-check each submission yourself, or hire an expert service to do it for you.

No. Avoiding just one denial from a major payer will pay for the service many times over. You can rest assured that future recredentialing will be managed for you as well.