(This one is a long one, enjoy!)
Credentialing can break your revenue cycle from the beginning. Most revenue cycle leaders understand this and try to express this simple fact to the senior leadership teams. However, when the senior leadership decides to bring on physicians before the credentialing process is completed, it has a MAJOR revenue impacts on the "whole" organization/practice . This article is high level overview not an in depth look at the processes.
There are many different reasons why Operators and Sr. Leadership will need to bring on providers without the credentialing process being completed. Some of those reasons could be a shortage of providers in a particular specialty, or a new specialty that is in high demand for a market or area and these may not be avoidable. Some of the other reasons that are avoidable are providers brought on board without communicating they are coming as well as providers starting too soon.
Now you may be asking; how long does the credentialing process take? Which insurances are vital for the provider to be credentialed before they start? The credentialing process can take anywhere between 2-9 months. Yes, I know it is quite a large span, but depending on the payers depends on the time frame. Medicare typically takes 60 days (2 months) to credential the provider, and most insurance will not start their process till the provider is credentialed with Medicare, thus the additional time frame. Depending on the state you live in Medicaid could take anywhere between 2 months to a year to credential a provider.
To answer the second question, which insurances are vital for a provider to be credentialed with before they start, I would say the major players – Medicare, Medicaid, BCBS, and your top two to five commercial payers. Depending on your payer mix will depend on your top payers you need to start the credentialing process for your provider. Typically, 70% + of your patients will fall into one of these payers categories above, so it is important for the provider to be credentialed as soon as possible so that your revenue cycle is not negatively impacted.
So what happens when the providers come on board with your organization or practice, and they are not credentialed with the payers? Several items occur, and these will impact your total revenue cycle negatively.
· Depending on your practice policy the provider is limited to patients they can see. Thus the provider productivity is reduced, and no revenue is accumulated.
· The bigger impact is the provider sees patients, and you hold all the charges for the services rendered till the provider is credentialed.
So let’s talk about the second one, holding charges for services provided. The practice or organization may take a financial risk for holding theses charges. Now you may say, what is the financial risk? The risk is the charges that occurred between the start date and the participation date, may not get paid, which results in a loss of revenue.
An example of the financial risk is a provider start on January 1st, and the payer decided to credential the provider on June 1st, then the charges that incurred between January 1st and May 31st would be considered non-payable by the insurance company. Thus all the charges accumulated in that period would be written off as non-participating. This could be a couple of hundred, thousand, or hundreds of thousands of dollars depending on the number of patients seen with that insurance.
Let us take a step back and ask another question, how does the payer decide which date is the participation date? Depending on the payer, some payers will backdate the participation date to the application received date or start date. If the application date is on or before the provider start date, then you wouldn’t have a revenue impact, IF the payer backdates the participation date. The reason we wouldn’t have a revenue impact is that the billers would be able to drop the claims (charges) to the payers and payers will pay the claims for the services rendered.
However, some payers will not backdate to the application date or start date. Thus the payer will typically give a participating date when they have completed their portion of the process. When this happens the revenue cycle is adversely impacted, meaning the payer will not pay the claims (charges) during that period. The key here is to get the application to the payers as soon as possible, hopefully before the start date. Which means if the revenue cycle leader doesn’t know when a provider is starting or a provider signs a contract and starts the next week, it is nearly impossible for the credentialing team to gather the data, fill out the applications, and get the applications to the payers before the provider starts resulting in a non-participation period. And in this situation, you will have a financial impact.
So the question is – why can’t we bill the patient for those services between that time frame. The answer is simple; you can depending on the payer, but do you want too? NO!!! Why because the patient came to see your provider in good faith and your provider saw that patient. In most cases, the patients are not informed that their provider is not yet credentialed because the provider needs to build their patient base. Thus the patient should not be penalized. However, if you do notify the patient that their provider is not credentialed and the patient decides/elects to see the provider anyway, then the risk is on the patient not in the organization. In that case, you would bill the patient. So let me be frank, do you want to start off with bad customer service by billing a patient to pay for services rendered while the provider is not credentialed, NO.
Another scenario to reduce the financial risk is to charge the insurance company and take the non-participation payment which is usually much lower and write-off the remainder of the amount going to the patients. Typically when the insurance companies pay at the non-participation rate, the amount goes to the patient deductible. Resulting in the patient being responsible for the bill. There is, however, an operational issue with this process; it is tough to track. Thus the patient ends up getting a statement when you did not want the patient getting a statement. This will ultimately cause dissatisfaction by the patient, and usually, doesn’t reduce the financial risk.
Now, this leaves revenue cycle leaders having to explain the write-off’s to the senior leadership. When you have to write off charges, this affects what the operational team can do, which typically doesn’t make many people happy. Bottom line the net revenue is lower when you have to write off for non-participation status. What operators and senior leadership need to understand when it comes to credentialing, is this, if there is an operational reason why a provider needs to start before credentialing is completed the operators need to remember the cost of doing business even months after the provider starts and accrue for that loss.
Now, let us talk about the pitfalls in the credentialing process, in general. If a proper process is in place, the credentialing team can avoid these pitfalls. Here are a few of those pitfalls:
· Incomplete data gathering – resulting in delay of the application to the payer
· Incomplete applications to the payers – resulting in delay of participation status
· Lack of follow up with the payers and documentation of follow-up – resulting in negatively impacting revenue
· Lack of communication to the billing office regarding the status of credentialing – resulting in not dropping claims timely after participation date was received
· Rework of credentialing packages – resulting in delay of participation status
· Lack of communication to the leadership on credentialing process
A quick and easy way to avoid these pitfalls is to make sure that you have proper procedures in place for each provider and follow-up flags. Even if your organization outsources your credentialing, you still need to monitor the process. Once you have the process in place, then follow it, it is that simple! Where I see the most issues, is that the process is not being followed! You have no control over the payers and their timelines, but you do have control over making sure that you gather the data from the provider and signatures on time, the applications are complete and turned in before the provider starts, follow-up process is followed, and communication is timely with leadership.
Tips: Invest in Credentialing Software. Don’t recreate the wheel; there is so much out there just find the right software to fit your needs and use it. However, for the software to work the best for your organization, make sure to allow enough time to build the templates, global applications, and follow up the process. Using the “out of the box” software will ultimately not work in the long run. So take the time to build it to meet your needs. If you don’t take the time to build your software, you will be disappointed with the product or the reporting! So don’t be that practice or organization that spends money on software and not use it the way it was designed to be used.
Tips: Outsourcing. If you decide to outsource your credentialing process, be very careful. Make sure you are following up, as well as, you have a good communication process in place. Ultimately the revenue cycle leader is responsible, and senior leadership doesn’t want to hear it was the vendor's fault when something falls through the cracks.
Revitalize Healthcare Solutions can help you navigate and help you find the best solutions for your Credentialing Process. Contact us Below.
Cissy Mangrum, MBA, CMPE, CPC
Revitalize Healthcare Solutions
Email: Cissy.Mangrum@cmhealthconsulting.net
Website: www.revitalizehealthcaresolutions.com
Cell: 615-397-5042
Disclaimer – my thoughts are my own and are not associated with any company or system.
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