The Importance of Medical Credentialing ROI
This is more than a simple background check. The process verifies that the provider meets all of the criteria as stipulated by the insurance carrier. The healthcare organization and provider cannot be paid by that carrier for services rendered unless they are properly credentialed.
Each insurance carrier has a unique credentialing process and every physician in your practice will need to go through the medical credentialing process for that carrier before claims can be processed. Any clerical error or missing information may cause the credentialing to be declined. That scenario can lead to a longer wait time for payment of services and, in some cases, may mean that payments will not be honored by the insurance carrier. This step provides all of the current information on the physician’s training and background and is updated regularly. Physicians cannot be granted privileges in most healthcare organizations without first completing the medical credentialing process.
Medical Credentialing ROI
What does medical credentialing cost your business?
You might be surprised at how much you’re investing in this necessary process. There are several costs that you don’t see, such as the time it takes staff to complete the credentialing process per provider and insurance carrier. There may be costs associated with mistakes, as well, which can include a delay in payment or a loss of payment. One medical credentialing cost is associated with verifying the credentialing effective date on the facility and healthcare plan. This can cause a large delay. Some practices don’t think of the extra time in terms of monetary loss, but that assessment is false. Lost time in credentialing can cost your organization in billable hours and a decrease in patient appointments.
For many organizations, the credentialing costs are hidden within the overhead costs of the business. This doesn’t make those costs any less impactful. It only means that the organization is not labeling those revenue cycle management issues accurately. Without clarity on the costs associated with medical credentialing, you can’t improve your ROI or diminish losses.
Consider the time commitment for staff. They may spend 20 or 40 hours on medical credentialing tasks for one provider. That is a half or full week’s salary that was not used by the practice in a typical way. If, for example, one of your billing staff members took care of credentialing, their workload would backlog in the same way it would during a vacation. Can your staff afford that time? How much additional stress will they suffer in trying to make up their regular workload? Can your organization afford the delay of completion in that staff member’s routine responsibilities?
These internal costs can be eliminated by outsourcing. While someone at your practice would likely take the lead in working with Bizmatics, the time commitment would be one of oversight, rather than full responsibility. The cost of medical credentialing is largely in employee hours and possible errors.
If an employee takes the lead on medical credentialing for your organization, the responsibilities include populating or manually filling out applications, application review, tracking down data, communicating with your physicians to make sure they have the full scope of their records, responding to follow up requests from credentialing bodies and fielding any denials that might arise from incorrect or incomplete applications.
How do you measure this cost?
- $1,659.95 per provider. This is the cost per provider to supply medical credentialing for 5 insurance companies. If your organization works with 20 insurance carriers, your cost would be 4 times that number per provider.
- 3.4 Hours Per Physician. If your physician’s time is worth $163.96 per hour, the cost is $557 per physician.
- 31 Support Staff Hours. If your employee makes $19.50 per hour, the total cost is $604.50
- Technology and Hardware Cost/Use. $150
Why Outsourcing Improves Your Bottom Line
The breakdown above doesn’t reflect your exact practice information because each organization will have unique variables, such as rates of pay per employee and the number of providers within the organization. But you’ll find that the analysis is fairly similar to what your staff is working with. If you had the employee that manages medical credentialing track their hours exactly for that task, you would find the hours are similar, depending on the number of physicians and credentialing bodies. If your staff member doesn’t fully understand the process involved for each payer, they will meet with roadblocks and delays, if not denials.
There’s already a 20-40 day lag time between the signing and completion of the application. Medical Billing software costs are often not associated directly with medical credentialing in your financial assessments. Even though the credentialing process can have a significant impact on billing. If you lose revenue or are unable to bill for charges, you may not be categorizing that loss directly with credentialing, but most practices do have losses of this nature.
In some cases, practices might provide an income guarantee for providers while credentialing is completed. In those cases, the provider’s lost revenue is carried by the organization, rather than the physician, compounding the monetary loss for the organization.
At Bizmatics , the average time we take to complete health plan enrollment for PPS, measured from the date we receive the provider’s complete information to the effective date at the plan is 110 days. Some plans take more than 180 days, while others take less than 90 days. Depending on the type of practice and the Medicare Administrator, the average time for Medicare is 60 days. The time for credentialing depends on many factors.
Improper credentialing practices can cost your facility a great amount of lost revenue and employee time.
- Primary Care. Averages $860,830 in lost facility revenue, and $139,784 in the lost physician revenue
- OB/GYN. Averages $723,600 in lost facility revenue, and $215,112 in lost physician revenue.
- General Surgery. Averages $1,120,571 in lost facility revenue, and $259,756 in lost surgeon revenue.
- Neurosurgery. Averages $1,493,558 in lost facility revenue and $462,064 in lost surgeon revenue.
Improve Your Medical Credentialing ROI
For many organizations, the medical credentialing process is costly. It can take hours to complete for each provider and the organization might do business with several insurance carriers, adding valuable time to the process. Done correctly, credentialing can take over 90 days to complete. It must be scheduled and completed on time to make sure that the physician is fully approved before rendering service. It can be difficult to obtain retroactive payment if the credentialing process hasn’t been approved at the time of service.
These are just a few of the ways that a faulty medical credentialing process can negatively impact your organization. Often staff members are tasked with credentialing when it’s outside of their expertise. To add to that struggle, staff may only need to complete medical credentialing infrequently, which makes them more prone to errors because it’s an unfamiliar process.
At Bizmatics, we offer feature rich EHR Software and full-service outsourcing for all of your medical credentialing needs. This includes licensure renewals, DEA, CDS, malpractice insurance, and the process of shopping for better malpractice insurance rates. We offer services to assist with new practice start-ups. Partnering with us can include budgeting, planning, financial suggestions, insurance guidance, and a full range of staffing needs.
Outsourcing medical credentialing saves the provider time and money. Bizmatics is experienced in the credentialing process, making it more time effective and efficient. It frees your staff so they can concentrate on the very important tasks of running your office.
We’d be happy to discuss your needs. We can also assess your individual organization and elaborate on the probable timing of your credentialing if you’d like to schedule a call.
The revenue you stand to lose with an inefficient credentialing process can be costly. For larger organizations, these costs can compound in lost revenue and time loss for many of your physicians. Contact us today if you’d like to discuss a more efficient process.
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