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I am speaking to the owner of a newly established medical practice who’s happily caring for patients and finally bringing in revenue. I ask, “Do you have a team to ensure your organization is recognized as participating with all the insurance plans that you bill?”

They respond, “I didn’t think about that.”

That’s the answer I receive 90% of the time when I ask that question.

Happy to deliver care and less concerned with financial details

New practices are eager to start, deliver care, and bring revenue in, but they’re typically less concerned about or aware of their financial arrangements with insurance payers. Even when practices become well established, they may not give much thought to credentialing—the process of accurately confirming credentials and enrolling providers in contracts with commercial insurance plans.

Comfortable with non-par payments

Week after week, a practice may receive out-of-network reimbursement and grow accustomed to it. They may never realize they can earn more for the same services by ensuring physicians and other providers are accurately enrolled in insurance contracts.

Claims may not get paid at all. Rejected claims may come back from the insurance payer with a note that an authorization is needed. Office staff may not realize that authorization is needed because the providers who are delivering care are not credentialed and, therefore, considered out of network.

Instead of addressing the root problem, the office staff tries to obtain authorization for each incident, which can be time-consuming. If the practice merely addressed the source issue—the gap in contracting and credentialing—they would get higher reimbursement and simultaneously reduce overhead costs.

The second time around

A provider may see their claims are paid regularly. Suddenly, payment stops. The provider thinks, “Wait a minute. I was credentialed, I was contracted.” What happened?

More than likely, recredentialing fell through the cracks. Provider credentials must be renewed every three to five years depending upon the terms of their contract with the insurance plan.

A letter from the insurance plan that says ‘it’s time to recredential’ gets put aside, lost in a stack of papers, and, ultimately, forgotten. The provider then becomes a nonparticipant with the plan. To remedy the problem, an entirely new application must be submitted on the provider’s behalf.

A little-known risk of professional mobility

Physicians and other clinical providers have many professional options as they seek to improve their careers and livelihood. However, when taking advantage of these options, providers may fail to consider the impact on their contracts with the insurance companies that pay them.

For example, a provider may set up their own practice. After a time, this provider decides to become part of a larger, hospital-based healthcare system. The system may use a separate entity (a delegation) to credential its healthcare providers. The provider, who before had their own practice, now forfeits the right to negotiate with insurance payers on their own behalf.

The same provider may later decide to take their practice back and become independent again. Often, the provider doesn’t realize that once they separate from the hospital-based healthcare system, they no longer have any contract relationship with insurance payers. When they start to submit claims as an independent practice, these claims will be rejected as out of network or paid at a non-participating rate. The provider fails to realize they must be uniquely credentialed as a private practice again.

Tedious? Yes. Important? Well…yeah

Confirming credentials of healthcare providers and ensuring they are properly enrolled with insurance payers is labor-intensive, time-consuming, and adds to overhead expenses. Consider an individual provider or medical practice that has contracts with 30 different insurance plans: not only must an application be submitted for each plan, but each submission requires follow-up.

Is it worth worrying about? Proper credentialing means services can be reimbursed to their fullest potential. Credentialing also brings physicians and other providers better exposure to their desired market because their practice gets listed in public, commercial-payer directories.

Credentialing will never be the primary focus for medical practices. Delivery of care and achieving the best possible outcomes will and should always be top priority. However, when it comes to the long-term, financial viability of any medical practice—especially a practice not tied to a large healthcare system—details of insurance contracts and credentialing are extremely important. If you have any questions about credentialing, NextGen Healthcare is here to help.

To find out if your practice may benefit from professional credentialing services, take this short quiz

Meet NextGen Ambient Assist, your new AI ally that generates a structured SOAP note in seconds from listening to the natural patient/provider conversation.

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Kimberly Pesek

Sr. Manager, Credentialing