How Credentialing Impacts Medical Billing and Revenue

Key Takeaways 

• Medical credentialing and billing are two core practice management activities that affect practices’ revenue and financial performance. 

• A well-credentialed practice or provider can participate in insurance panels and file claims for services rendered. 

• A practice with a robust billing system and workflows is less likely to lose revenue due to claim denials and rejections. 

• Credentialing delays, such as payer backlogs and documentation gaps, can affect revenue. 

• Practices can fast-track credentialing and improve medical billing by outsourcing these processes to a company that streamlines credentialing and billing and offers end-to-end services. 

• Best practices such as automation, pre-scheduled panel verification, and standardization speed up reimbursement and reduce denials.  

Credentialing is the first step in determining whether a healthcare provider receives payment from third-party payers based on how well the provider’s credentials have been verified. Failure to credential properly can lead to significant revenue loss, potentially costing 20 to 30% of total annual reimbursement. Additionally, it can negatively affect a healthcare organization’s cash flow and overall staff morale. It also has long-term effects on the organization’s sustainability.  

This blog will explore the impact of credentialing on medical billing, the difference between medical credentialing and billing, the various steps involved in the credentialing process, common obstacles and barriers encountered during the process, and effective strategies to improve medical credentialing and billing, ultimately maximizing revenue. 

What is Medical Credentialing? 

Medical credentialing is a thorough process of verifying a medical provider’s credentials to ensure they have the proper licenses, certifications, malpractice history, and hospital privileges to qualify for participation on insurance company and regulatory lists. It typically begins with primary-source verification (PSV), which involves contacting issuing organizations to verify the validity of a provider’s credentials. The primary entities involved in PSV are state medical boards, the National Practitioner Data Bank (NPDB), and the American Medical Association (AMA), through its database. 

The credentialing process usually begins when physicians successfully complete their CAQH ProView application. CAQH ProView is a centralized credentialing database where physician credentialing services collect and submit 100-plus credentialing data elements (education, employment history, certifications, etc.) to each insurance company (Medicare through the CMS PECOS System, Medicaid, Blue Cross Blue Shield, commercial insurers, etc.). Groups may also use healthcare credentialing companies to credential their entire practice or group through Joint Commission facility accreditation.  

The main cause of delays in insurance credentialing is missing documentation. For example, failing to provide a DEA certification or submitting an expired license will result in rejection of the application. CMS requires that providers be recredentialed on a 3-year cycle. Most commercial payers require participating physicians to be credentialed every 1 to 2 years. HFMA reports that, through credentialing, organizations can reduce administrative costs by as much as 15 to 20% per provider by streamlining the credentialing process through standardized data collection.   

Panel participation is the most critical part of insurance credentialing for physicians. This process grants a physician, participating provider, or in-network provider reimbursement status under a contract. Without this status, you cannot bill in-network patients. This also results in automatic claim denial and reduced payment for services provided to patients who do not have enough insurance coverage. 

What is Medical Billing? 

Medical billing is a process by which the in-network provider submits clinical documentation, which is translated into coded medical claims, to receive reimbursement from health insurers. For healthcare billing to be successful, each claim must follow a standard 8-step process: 

• Registration 

• Insurance eligibility check 

• Charge capture 

• CPT-ICD-10 coding 

• Claim scrubbing 

• Submission 

• Payment posting 

• Denial management 

Physician billing enrollment services are essential before the claims process begins, ensuring the health payer has identified all providers so it can submit claims. For example, Medicare requires physicians to use PECOS to obtain an NPI-linked billing number, while commercial payers require credentials reflecting their respective CAQH profiles. 

Errors during this process will result in denied claims, often due to code assignment errors, such as a charge exceeding the fee schedule or a non-covered charge. However, most claims may be rejected if you overlook credentialing lapses. 

How Credentialing Affects Insurance Claims 

Credentialing most affects insurance claims during claims processing. For example, uncredentialed physicians can’t bill as in-network providers and experience 80% to 90% of claims being denied. Credentialing for insurance companies ensures physicians have valid credentials to be eligible for the insurance company’s panel, allowing clean claims to be submitted at a negotiated rate. Typically, the negotiated rate is 120% to 150% of the Medicare rate for commercial payers. 

Insurance panel credentialing for payer-specific applications can take 90 to 80 days. During the application process, providers cannot submit claims for services provided. Therefore, credentialing services during this period create dark revenue (hidden or uncaptured income). Once credentialing is complete, the provider can file claims retroactively. However, due to strict filing windows (90 to 180 days), the provider may not recover the full amount of dark revenue. 

Common rejection reasons include an expired CAQH attestation, mismatched NPDB information, and CMS-related claim denials due to enrollment issues. When such denials happen, claim appeals have only a slim chance of success, ranging from 20% to 30%. 

Credentialing Delays that Affect Revenue 

Credentialing delays create significant financial consequences for physicians and practices. Credentialing delays significantly impact physician practices financially, averaging 120 days or more for initial enrollments and 60 to 90 days for recredentialing.  

• Payer backlogs: UnitedHealthcare, for example, set a standard credentialing timeline of 150 days.  

• Documentation gaps: Incomplete applications without proper information and mismatched information between the CAQH profile and the credential 

• Regulatory hurdles: OIG checks to determine whether the provider is excluded from participation.  

• Accounts Receivable (AR) impact: 22% of accounts receivable are more than 90 days past the enrollment lapse date. 

Benefits of Outsourcing Credentialing for Multi-Specialty Practices 

The two major components of a healthcare provider’s upstream RCM are credentialing and revenue cycle management. Because credentialing builds trust and credibility, lower patient enrollment from an uncredentialed provider affects downstream cash flow, causing revenue leakage and denial write-offs. 

However, CMS’s EPP (Every Provider Profile) and CAQH’s core platform allow a provider’s credentials to be monitored in real time and have been shown to reduce denied claims by 35%. Integrated RCM platforms also provide 120-day advance notice when a provider’s credentials are about to expire, which can be synced with the billing workflow.  

Moreover, requiring providers to recredential every 36 months creates an unstable RCM cycle. When credentialing is managed poorly, DSO increases from 40 to 70 days, significantly impacting the provider’s margin. 

Benefits of Outsourcing Credentialing 

The credentialing process is incredibly time-consuming and can seem unnecessarily laborious when handled in-house. Outsourcing physician credentialing services can shorten timeframes and improve the efficiency of the entire process compared with having the provider handle every step.   

Healthcare credentialing services such as Credex Healthcare specialize in provider credentialing and can significantly streamline the process and increase productivity by adopting a sustainable, proactive workflow. In addition to providing delegated authority to various payers, they can handle tasks required to update CAQH profiles, run NPDB searches, complete CMS attestation documents, and manage other required paperwork from start to finish. 

Some of the benefits of outsourcing insurance credentialing include: 

• Quick processing: Professional practice management services specializing in credentialing can quickly navigate the multiple requirements of each payer’s portal. They are less likely to face delays from staff turnover or manual data entry errors.   

• Increased approval rates: Credex Healthcare’s specialists understand what documentation is needed and how to complete it. This ensures a high first-pass approval rate and faster denial resolution.   

• Reduced costs: Outsourcing credentialing frees internal staff from non-clinical tasks. It also removes the need to hire specialized credentialing staff or purchase expensive credentialing software for healthcare practices.    

• Full-service scope: Companies like Credex Healthcare can handle all aspects of credentialing, including enrolling new providers, recredentialing existing ones, and multiple-panel enrollment (including both Medicare and commercial payers).   

• Risk management: Credentialing companies have sophisticated systems that track renewal, sanction, and expiration dates in real time. 

• Scalability: Credex Healthcare can add new providers or expand existing payer panels without placing an undue burden on your existing staff.   

• Knowledge of regulatory compliance: Credentialing companies have built-in audit processes and stay current on dynamic regulations from the CMS, OIG, and payers. 

• Revenue protection: Credentialing companies can seamlessly transition physicians’ applications to your billing department, minimizing gaps that can delay claim turnover and impact cash flow. 

Credex Healthcare stands out with provider credentialing services for insurance providers. This practice management service provider not only tracks timelines but also offers proactive strategies to create revenue forecasts and ensure compliance. Outsource credentialing to reduce administrative strain and ensure compliance while your team focuses on patient care. Turn credentialing into a competitive advantage with Credex Healthcare. 

Best Practices for Credentialing & Billing 

A structured approach to credentialing and billing efficiently builds a process that reduces denials, speeds reimbursement, and supports the credentialing and medical practice revenue cycles. This addresses the most common issues in both physician insurance credentialing and insurance company provider credentialing, while providing a seamless flow into providers’ revenue cycle.  

Here are some of the best credentialing and billing practices: 

Process Automation 

Use CAQH’s dashboard and an automated RCM platform to automate tracking. This lets you set up renewal reminders before medical licensure, CAQH attestation, and other credentials expire, so you won’t be surprised when they lapse. When integrated with practice management systems, this also enables a single credentialing calendar accessible to both the billing and front office teams. 

Pre-Scheduled Panel Verification 

Verify the panel status on each payer portal accessed prior to scheduled appointments. Missing enrollment prior to scheduling can result in unbilled services. Train your front desk staff to access real-time eligibility metrics, including credentialing status, NPI, contract information, and others. 

Live Documentation 

Always keep your CAQH ProView profile attested. Designate a credentialing coordinator to update core credentials, such as education, malpractice insurance information, and employment history, in your profile. Use consistent templates for all payer applications to reduce errors and maintain a master provider database that syncs with EHRs, billing software, and credentialing platforms. 

Staff Capacity Building 

Provide training sessions for your administrative staff, including billing, front-end office, and management departments, regarding credentialing workflows and protocols, with a shared goal of maintaining panel participation. This should include information on each payer’s specific requirements, common denial reasons, how to navigate CAQH, and eligibility workflows. Schedule refresher courses and cross-train staff so they maintain the same level of knowledge during staffing changes.  

Regular AR Audits & Appeals 

Schedule regular audits of your accounts receivable (AR) reports, focusing on the number of claims denied due to credentialing issues. Categorize them by payer and provider, and appeal claims within the timeframe each payer sets. Review trends and the reasons these claims were denied so you can improve your workflow and turn potential lost revenue into recovered revenue.   

Outsourcing Multi-Payer Credentialing & Billing 

Use physician credentialing services to support difficult panels, such as commercial payers and Medicaid managed care. The credentialing service will obtain delegated authority, complete parallel submissions, and follow up on submitted credentials to expedite approval, rather than handling it internally. This suits rapidly growing medical groups that are onboarding new physicians or expanding their networks.  

Conclusion 

Provider credentialing and billing integration is nearly standard for healthcare practices that want to protect revenue from common challenges such as delays, denials, and financial burdens. By adopting established best practices and continuously monitoring the credentialing process for payer partnerships, a health care practice can turn a potentially troublesome credentialing process into a positive driver of revenue. 

When credentialing and revenue cycle management work seamlessly together, health care providers can enjoy financial stability, regulatory compliance, and the flexibility they need to thrive over the long term. 

FAQs 

How does credentialing affect medical billing?   

Credentialing gatekeeps in-network claim filing. When a provider’s credentialing lapses, they can expect more than an 80 percent increase in denied claims. This delay can delay payment for services rendered by more than 90 days.  

Can physicians bill insurance without credentialing?   

Yes, but rarely. Most often, patients pay out of pocket or self-pay, and some physicians may choose to see out-of-network patients. Standard insurance claims from uncredentialed providers are likely to be denied.  

Why are insurance claims rejected due to credentialing?   

Not participating in an insurance panel always means automatic claim rejection. That is, if the physician’s credentials have expired or the information on file with the payer doesn’t match the information provided on the claim.   

How does credentialing improve practice revenue?  

Denial rates can decrease by 25-40% for practices with proper credentialing. In addition, the time taken to collect accounts receivable decreases to approximately 30 days. Collections also increase by 10-15% for well-credentialed practices.