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Centralized Credentialing Creates Stafng Efciencies, Prevents Billing Losses


hysician credentialing is a lowprole function within healthcare management. Credentialing is perceived as routine, and FTEs devoted to this work are seen as an overhead expense. But while credentialing plays a minor role in healthcare administration, poor execution can cause problems. Everyone is aware that credentialing lapses can expose a healthcare organization to malpractice suits and accreditation problems. More commonly, credentialing mistakes lead to nancial losses on provider services. Even in organizations that avoid major problems, inecient credentialing needlessly increases administrative costs. Worst of all, poor credentialing processes create friction with physicians. e solution to all these problems is centralization of the credentialing function. Leading healthcare organizations have reduced costs and improved outcomes by creating a consolidated team to manage credentialing across the entire enterprise. Problems with the Status Quo Physician credentialing is straightforward but detail intensive. It includes applying for and obtaining network participation with payers (Federal and commercial) and securing hospital privileges. e basic workow is cyclical: capture physician information (degrees, residency information, licenses, references, etc.), submit applica34 GROUP PRACTICE JOURNAL

tions, and manage periodic renewals. Credentialing sta must also coordinate several related items, including jurisprudence exams and specs tests. Specic requirements can vary by state. In most medical groups, the credentialing function is located in the billing department or the administrative oce. Typically, credentialing work is a secondary responsibility for several sta members. Even when someone is hired specically to handle credentialing, it often happens that he or she is gradually handed additional tasks that dilute the focus of the position.

Leading healthcare organizations have reduced costs and improved outcomes by creating a consolidated team to manage credentialing.
Credentialing sta typically use a variety of homegrown methods and tools, including spreadsheets, personal checklists, and a variety of reminder systems. Many organizations have a long-tenured credentialing employee who does a good job using these tools. One problem with this type of system is dependence upon the expertise of one sta member. Without the credentialing point person on hand, the whole process comes to a standstill.

Another problem is that makeshift tools do not scale well. Signicant growth in credentialing volume or complexity can easily outstrip the capabilities of the system. Diluted sta focus and poor tools can lead to problems with eciency and accuracy. e biggest problem, however, is that they create a reactive environment. Work is driven by impending deadlines, not proactive planning. Physicians often bear the bruntas when a physician has to spend two full weekends taking CME classes because he or she was informed at the last minute about an impending loss of hospital privileges. Complicating the situation is the fact that in many larger organizations, credentialing responsibilities are distributed among several dierent departments and facility locations. As a result, physicians are approached by multiple individuals for the same information. Growing Pressure Recent developments in health care are exposing the weaknesses of traditional approaches to credentialing. As consolidation drives the formation of larger medical groups, administrative staers are struggling to keep up with the demands of physician onboarding. Also, growth in physician employment by hospitals is rapidly expanding the volume of credentialing work handled by staers who are comfortable with privileging work but are unfamiliar with the requirements and processes of payer credentialing.
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e growing pressure on traditional credentialing systems is creating greater nancial risk. If an organization fails to properly credential a physician with Medicare and other payers, the doctor cannot bill for services. is means lost revenue for the group (in the context of employment) and/or the provider. Unfortunately, the margin of error recently became thinner. A 2009 change in Medicare regulations reduced the service backdating window from 27 months to only 30 days. e problem is not just theoretical. In 2009 a practice management company was forced to pay more than $250,000 to compensate a client for lost revenue stemming from a credentialing lapse. Centralized Credentialing e key to addressing all these problemsineciency, service shortfalls, nancial riskis to recognize the limitations of traditional, fragmented approaches to credentialing, which do not take advantage of opportunities to standardize and streamline processes. ey should be replaced by a strategy of consolidation: creating a professional, centralized unit that handles all credentialing, privileging, and related tasks. Healthcare organizations that have converted to centralized credentialing have realized several benets in eciency and outcomes:
Stang cost reduction.

Healthcare organizations can achieve all these benets through the right mix of organization, sta skills, processes, and tools. Based on our companys experience consulting with several provider organizations, we have found that ve factors are important to building a highperforming credentialing function. 1. Create a Specialized Team e foundation of an eective credentialing unit is specialization. Members of the credentialing team should focus entirely on physician credentialing, privileging, and related functions. Team members should not have side responsibilities in other areas such as billing, administration, or recruiting. A strong credentialing team can usually be recruited from within the organization. As you review internal candidates, focus on identifying the right skill set. A good credentialing professional is detail-oriented and can multitask, but must also possess excellent client service skills. Choose candidates who can interact positively with physicians, hospital administrators, and payer representatives. A major goal of a specialized team is standardization of processes. e credentialing supervisor should work with other team members to create credentialing policies and procedures that drive the bulk of the units activity. 2. Use Dedicated Credentialing Software As discussed above, many credentialing eorts employ a collection of internally developed tools spreadsheets, calendars, checklists, reminder systems, etc. Again, one problem with these systems is their heavy dependence upon the knowledge, memory, and diligence of the individual user. Eective credentialing teams use specialized software to coordinate credentialing information, automate functional

credentialing unit can reduce credentialing-related billing problems to essentially zero.

expertise, manage workows, and ensure continuity. Several vendor software packages are available. Each has strengths and weaknesses, but they all oer functionalities and capabilities that homegrown systems cannot match. Vendor systems allow credentialing sta to take a much more proactive approach to their work. Triggers can be used to eciently manage deadlines and automation can facilitate repetitive processes. Dashboards and custom reports allow the team to monitor and steer the entire process more eectively. Does it make sense to build a credentialing platform in house? Some healthcare IT departments have succeeded in creating highly functional credentialing systems, but these cases are rare. It is easy to pour a lot of money into IT development and end up with a poorly functioning system. For the vast majority of healthcare organizations, the most cost-eective route is to purchase a dedicated credentialing package from a proven vendor. 3. Manage Each Physician as a Single Account As noted previously, when credentialing sta are dispersed throughout an organization, physicians receive poor service. In a typical scenario, a physician might be contacted by an employee responsible for government credentialing, another person responsible for PHO credentialing, plus privileging staers from ve separate hospitals. Each person needs basically the same information. In contrast, centralized credentialing enables sta to treat each physician as a single, coordinated account. Team members identify all the information and documentation needed for an entire credentialing/ privileging panel and contact each physician once per year. In larger credentialing teams, single-account management will be facilitated by choosing the right way to divide the work. ere are two basic approaches:
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Service improvement. Central-

In 2009 a national hospitalist group consolidated its credentialing function, reducing total credentialing sta from 20 to 10 and cutting total credentialing FTEs by approximately one-third. izing sta and processes leads to better service to physicians. Consolidation avoids duplicate requests to physicians for information, and working proactively helps eliminate deadline crises. In my experience, a well-designed

Revenue cycle optimization.


Divide the work by function.

Assign accounts by specialty.

For example, one team member will handle hospital privileging, another will manage credentialing with government payers, a third will be responsible for commercial HMOs, etc. Under this system, individual team members handle all the credentialing for physicians in designated specialties. One staer might be responsible for cardiologists, urologists, and family practitioners; another would take care of physicians in neurology, nephrology, and gastroenterology; and so on. the second approach enables greater individualized attention to physicians. Dividing the work by specialty allows credentialing team members to master specialtyspecic requirements. For example, the team member responsible for anesthesiology will develop an indepth understanding of hospital sedation privileges. Under this system, each physician account is owned by one credentialing team member, providing further assurance that critical details do not slip through the cracks.

of information. A payer representative who knows the credentialing team member is likely to call up and simply request the missing information. When there is no relationship, the entire application is likely to be returned as incomplete, causing a signicant delay.

Outsourcing certain portions of credentialing can also make sense.

For this reason, developing a credentialing team should focus on fostering strong relationship-building skills. In addition, compensation packages should be designed to minimize turnover. 5. Take a Flexible Approach to Outside Resources Many external credentialing resources are available, and they can often be integrated with in-house eorts to create greater eciency and cost-eectiveness. For example, the credentialing process requires provider organizations to authenticate basic information such as the physicians education, training, licensure, and malpractice history. Some providers nd it cost-eective to engage a credentials verication organization (CVO) to handle this background fact-nding. In-house sta simply coordinate accounts with their CVO counterparts. Outsourcing certain portions of credentialing can also make sense. For instance, some organizations are comfortable handling hospital privileging and government credentialing, but would rather outsource commercial payer credentialing. is is a workable arrangement, and it could allow an organization to focus on its strengths. Outsourcing the entire credentialing/privileging function is also a possibility. is option can provide the benets of centralization while leveraging existing expertise and relationships. Outsourcing can also

help an organization accommodate a surge in physician hiring without having to re-size credentialing sta at a later date. In any scenario, the nance department should analyze the cost of developing and maintaining in-house capabilities versus using outside resources. In an organization that manages the credentialing function for 100 physicians, potential cost savings from prudent outsourcing can amount to tens of thousands of dollars per year. Positive Relationships with Physicians Medical group leaders seeking new administrative eciencies should not overlook the opportunity to streamline credentialing sta and processes. Centralized credentialing can also be an important element of physician relations. As the provider consolidation trend continues, leaders can expect more points of friction to develop between physicians and administration. A professional credentialing unit can help minimize avoidable problems and support positive working relations among all parties. Sabrina Burnett is vice president of Health Directions, LLC, a national consulting rm that provides business solutions for healthcare organizations.

Both systems can work, but

4. Emphasize Relationships Credentialing is not just paperwork. It is a high touch discipline that relies on cooperation and input from multiple stakeholders. Eective credentialing teams focus on building strong individual relationships with payer representatives, government contacts, medical sta liaisons, and many others. Personal relationships are often the key to resolving credentialing problems quickly. e ability to call a known contact (as opposed to the unknown person answering an 800 number) can mean the dierence between overcoming a process snag in minutes rather than in days. A strong relationship can even head o a problem before it develops. Lets say a health plan credentialing application is missing a minor piece
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