The ROI of Outsourcing Medical Credentialing for Clinics and Hospitals

Healthcare organizations, whether clinics or hospitals, face an ever-increasing number of challenges as they navigate the increasingly fast-paced world of healthcare. The challenges include increasing operational expenses, a decreasing number of qualified staff, increasing regulatory complexity, and maximizing revenue while providing the highest level of care for their patients.  

Delays in critical time-sensitive processes such as provider enrollment can lead to delayed billing for patients, decreased cash flow for organizations, and dissatisfaction among staff members who deal with the non-clinical issues that impact both staff and patients.  

Medical credentialing services provide an opportunity for health care organizations to leverage outsourcing to overcome many of the operational challenges, primarily revenue loss, associated with delaying the credentialing process. Healthcare organizations that outsource this process to a specialty service can demonstrate positive ROI (return on investment) by achieving faster approval from insurance companies, reducing administrative costs, and increasing compliance. 

In this blog, we will explore the benefits of outsourcing medical credentialing and insurance credentialing services, as well as the return on investment for clinics and hospitals. 

What is Medical Credentialing? 

Medical credentialing is a very detailed process of validating a healthcare provider’s education, training, certification, licensure, and professional history. It is designed to provide assurance that the physician, nurse practitioner, physician assistant, and all others involved in the delivery of health care have met the high standards of a healthcare facility, insurer, and regulatory agencies prior to the provider being allowed to deliver primary care or bill for services provided.  

Credentialing is critical to the safe delivery of quality care to patients. In addition, it provides a mechanism for smooth integration into the payer network. Failure to complete the credentialing process will result in potential liability to the facility, disruptions in service delivery, and monetary fines from unvalidated providers.  

Moreover, the relationship with insurance reimbursement cannot be overstated here. Credentialing confirms that a provider has the necessary credentials to submit claims to major payers, including Medicare, Medicaid, and private payers. The credentialing process is integral to the revenue cycle and protects the facility from claim denials that could reduce its profit margin by up to 10-20% per year. 

The credentialing process includes primary-source verification (PSV) of each credential directly from the issuing agency, such as a state medical board or the Accreditation Council for Graduate Medical Education. In addition, for hospitals, the credentialing process also includes privileging. Privileging refers to granting specific clinical privileges to a provider based upon the results of competency evaluations. As regulatory oversight continues to expand and becomes increasingly complex, the need for robust credentialing processes will remain essential to ensure the continued operation and growth of your organization. 

Key components of medical credentialing: 

• Primary-source verification of credentials directly from official issuing agencies 

• Privileging process for hospital clinical rights 

• Eligibility for reimbursement from insurance payers 

Challenges of In-House Credentialing 

The in-house credentialing process is an administrative burden on hospitals and clinics. The time it takes to complete the credentialing process is significant enough that the costs can not only drain but also prevent revenue from improving. The complexity of the credentialing process can often result in providers feeling overwhelmed, impacting all aspects of the hospital and clinic, from cash flow to employee morale. 

Here are some of the primary challenges of in-house credentialing:  

• Lengthy processing time: Due to high volumes of paperwork, follow-up communications, and multiple levels of verification, processing for each provider will take 90 to 150 days. 

• Credentialing document tracking: Provider must track dozens of licenses, certifications, and insurance expiration, renewal, and re-attestation deadlines. 

• High error rates: Reports show that the error rate for providers applying for credentialing is 25-40%. Frequent errors and rejections require resubmitting applications, which generate additional expenses and extend the credentialing timeframe. 

• Complex case difficulties: When locum tenens providers are involved, or when there are multiple state licenses involved, complexity increases because of the differing requirements and documentation needed. 

• Revenue loss: If a provider is not credentialed, the provider may lose revenue that may exceed $30,000 per month. This can cause severe cash flow issues. 

• Compliance issues: Because the staff member who performs the in-house credentialing function may not have the necessary knowledge regarding credentialing, the hospital and clinic may face a Joint Commission audit or other regulatory penalties. 

• Increased costs: An in-house credentialing process requires 15-25%, adding to overall operational costs.  

• Scalability issues: There is no way for the in-house credentialing process to scale as a hospital and clinic grow by adding specialists or payers without corresponding staff additions. 

• Employee burnout: Administrative staff members have the responsibility of credentialing providers while also handling billing and scheduling. As a result of this dual responsibility, administrative staff members experience a 20-30% annual turnover rate. 

What Does Outsourced Medical Credentialing Include? 

When outsourcing medical credentialing, the service provides a complete, end-to-end solution to handle all aspects of the physician credentialing process, including the paperwork required to get enrolled with payers and meet all regulatory compliance requirements, which can free up your staff to focus on other aspects of their jobs as well as expedite approval of claims by payers. 

The services described below are generally included in outsourced medical credentialing: 

• Provider enrollment: Preparation of payer applications, including licensure, DEA certificate, malpractice history, and peer reference information. 

• CAQH ProView profile management: CAQH profile creation, management, and annual attestation submissions for over 1,000+ organizations using the Council for Affordable Quality Healthcare platform. 

• Insurance panel application preparation: The preparation and submission of insurance panel applications using the various specialized portals and requirements for Blue Cross, Aetna, and UnitedHealthcare, among others. 

• Background verifications: NPDB verification of the National Practitioner Data Bank (including 5-year work history), FCVS (Federation Credentials Verification Service) verification, and OIG Medicare check. 

• Ongoing maintenance: Recredentialing every 2 to 3 years, delegation audits, and real-time dashboards to track physicians 

• Hospital-specific assistance: Assistance with hospital privileges and preparation for the Joint Commission. 

• System integration: Seamless integration into Electronic Health Record (EHR) systems and practice management software for enhanced billing process efficiency. 

Key Benefits of Outsourcing Credentialing 

Outsourcing credentialing provides significant advantages for hospitals and clinics by streamlining operations, reducing administrative burdens, and accelerating revenue cycles through specialized expertise. 

Here are some of the key benefits of outsourcing credentialing:  

Faster Approval Process 

One advantage is the ability to obtain insurance approvals much quicker than with an in-house credentialing service. This is because outsourced credentialing services have established relationships with payers and automated processes to ensure the timely processing of all necessary paperwork. Payers tend to give credentialing partners proven experience a high priority over their traditional submission process, thereby reducing back-and-forth interaction and minimizing onboarding duration for busy practices. 

Moreover, the automated tools used in outsourced solutions also assist with completing form fields and tracking submissions in real-time. These actions help avoid many problems that occur when credentialing is done internally, such as missing signatures. 

Reduced Administrative Costs 

Using an in-house credentialing system requires a team of employees who must be continually hired and trained at the expense of purchasing the necessary software. As a result, outsourcing credentialing is done as a scalable model. That is, physicians pay only for the credentialing service they use, and there is no recurring fixed overhead cost associated with a full-time employee.  

As a result, outsourcing credentialing has advantages in growing environments, such as adding a new physician, which can be done easily without significant additional hiring expenses. Physicians can use their savings from lower administrative costs for clinical expansion, the purchase of new medical equipment, or the skill development of employees. 

Improved Efficiency and Accuracy 

Specialists in credentialing have a higher initial approval rate from organizations than organizations with non-specialized personnel. Specialists are always aware of changing regulatory issues, such as CMS (Centers for Medicare & Medicaid Services), revalidation of certifications, and other regulatory changes by individual states.  

Compliance with all regulations is maintained through regular checks against the NPDB and other databases. This helps reduce compliance risk and exposure to audits. As a result of their ability to provide the necessary information to NCQA, URAC, or the Joint Commission for accreditation, specialists can provide assurance that a healthcare organization will successfully pass this process. 

Expertise and Technical Mastery 

Partnering with credentialing experts like Credex Healthcare gives providers access to certified professionals (CPMSM, CPCS) as well as access to a variety of AI-driven technologies to help predict approval and assist in streamlining verifications. These enterprise-grade tools are available at no cost to your organization in terms of capital expenditures. Providers will have access to mobile applications to upload documents to the credentialing company. The added advantage of using this technology provides additional efficiencies in each part of the revenue cycle. 

How Outsourcing Improves ROI 

Outsourcing credentialing converts an organization’s operational barriers into quantifiable financial results by enabling a practice to generate revenue more rapidly and provide a stable foundation to pursue long-term growth. 

Faster Revenue Generation 

Insurers will continue to refuse to pay for services provided by uncredentialed providers. Therefore, when a provider is credentialed, they can begin billing insurers for those services. The delay in obtaining initial approval from the insurer has been greatly reduced. Therefore, new providers are activated earlier than would otherwise be possible, so their billing workflow is functional without any delay. 

Ultimately, a quicker turnaround on claims through the revenue cycle improves the speed at which a practice can collect outstanding balances (reducing accounts receivable), thereby making it easier for a practice to accurately forecast cash flow. Every practice has reported a consistent increase in net revenue as it helps reduce credentialing delays.  

Lower Operational Costs 

Lower operational expenses can be achieved by eliminating a practice’s in-house credentialing team. Removing fixed costs such as salaries, benefits, training, and turnover eliminates a significant expense. In addition to this cost elimination, using an outsourced service provides flexible pay-for-service pricing, and the cost of these services will scale with the volume of work the practice is generating. Therefore, it does not require constant additions to staffing.  

Additionally, outsourcing also reduces the number of denied claims as submitted information has been properly verified and reviewed prior to submission. The time and money spent on overtime hours for administrative personnel is reduced or eliminated. The overall efficiency of operations allows the practice to allocate more resources to clinical priorities and strategic initiatives. 

Increased Patient Volume 

When more healthcare providers are credentialed for multiple insurance panels, practices can increase their ability to provide services without adding staff. This allows them to treat a wider population of patients who depend on the specific insurance network. 

Telehealth also allows practices to serve patients geographically. The result is a compounding effect: having more credentialed healthcare providers leads to quicker approval times and increased patient inflow. 

ROI Comparison: In-House vs Outsourced Credentialing 

There are two ways to accomplish credentialing for your practice: in-house or outsourced. Both options provide different levels of efficiency, time, and costs. As we compare the two, it will be clear that most physicians achieve rapid ROI by using an outsourcer. Below is a comparison of the two options, highlighting their advantages and disadvantages. 

When comparing the two options, outsourced credentialing significantly outperforms in-house credentialing, making it a strong choice for those emphasizing growth and efficiency. 

Role of CAQH and Medicare in ROI 

Both CAQH and Medicare have key functions in enhancing ROI from credentialing. They both help streamline the verification process and ensure ongoing reimbursement, which are two important elements that enhance clinic and hospital ROI when they outsource their credentialing to a third-party vendor.  

CAQH Proview: CAQH, managed by the Council for Affordable Quality Healthcare (CAQH), is a central database where providers provide information about themselves once. It then provides access to the same provider information for all other CAQH participating insurance companies. CAQH-participating insurance companies are required to use CAQH Proview information to verify the information.  

Therefore, when outsourced, the team will enter and update the profile of a provider at least every six months, preventing it from becoming outdated and the provider from being unable to bill. By maintaining a single point of entry for the provider’s information and updating it regularly, outsourcing partners can reduce the time it takes for most providers to be approved by multiple commercial insurance companies. This reduces the number of applications, denials, and rejections, and enhances cash flow. 

Medicare Enrollment: The Medicare provider enrollment process, managed by CMS, requires physicians to register via PECOS, submit Form 855I or 855R, and complete a 120-day primary source verification as required. Many practices experience significant delays in their reimbursement due to these processes. However, credentialing professionals can provide Medicare enrollment services, along with seamless support regarding MPFS updates and off-cycle revalidation.  

Each state has its own Medicaid portal, and all require providers to outsource the approval processing. Outsourcing also protects against Medicare Administrative Contractor (MAC) audit failures. 

When properly managed, CAQH and Medicare ensure that the most common barriers to reimbursement are eliminated. This allows healthcare practices to generate consistent revenue and have peace of mind concerning regulatory compliance. 

How to Choose the Right Credentialing Partner 

When selecting a credentialing partner, healthcare providers must evaluate their experience, technology expertise, integration, compliance, and results. By evaluating these areas, one can be assured that their practice will receive the fastest possible approval and achieve the best ROI on the credentialing investments. 

• Track record: When selecting credentialing services, choose firms that have been in business for over 10 years, that have an average annual volume of over 1,000 providers, and that can provide you with case study information demonstrating that they are consistently able to obtain approvals within 100 days or less. Credentialing experts like Credex Healthcare have 12+ years of experience, with expertise in over 50 states.  

• Compliance experience: To ensure the firm is compliant with all applicable laws and regulations, look for firms with expertise in NPDB and FCVS, as well as firms that have obtained SOC 2 certification. Also, ask the firm about its ability to maintain 99% dashboard update rates for specific examples of success it has achieved when working with different payers (e.g., Medicare). 

• Clear pricing: In addition to asking about pricing options, such as how many providers you can submit at one time, versus paying by the provider submitted, ask the firm if it offers any type of trial program so that you can see firsthand what types of benefits you can expect from using the firm’s services before committing to use those services. Credex Healthcare offers competitive pricing and discounts for bundled services.  

• Client feedback: Before deciding, ask the credentialing experts for references. Ask the reference questions about how the firm’s services have positively affected revenue cycle improvement, how the firm was able to scale to meet their needs during periods of rapid growth, and whether the firm provided them with easy-to-use, seamless operations. 

• Technology integration: The firm’s technology is also important. Ask the firm whether it uses Application Programming Interface (API) connectivity to integrate with the Electronic Health Record (EHR) and billing systems of your practice. As well as, if the firm has U.S.-based staff who can assist with any problems that may arise and ensure that all patient data remains protected in accordance with the Health Insurance Portability and Accountability Act (HIPAA), and whether the firm provides 24/7 customer service. 

FAQs 

What is the ROI of outsourcing medical credentialing? 

The ROI of outsourcing credentialing is substantial due to the ability to achieve a significant amount of cost savings, generate revenue more quickly due to an increased number of claims being processed, and reduce the number of denied claims. The healthcare practice may receive increasing returns from each year of operation, as operations are able to grow at an exponential rate.  

How much does outsourced credentialing cost? 

The costs associated with outsourcing credentialing vary depending on whether you pay by provider or per insurance plan. Outsourcing is typically less expensive than maintaining a team internally. Additionally, there are many pay-for-success pricing options that allow you to pay for what you achieve in terms of successful credentialing.  

Does outsourcing speed up insurance approvals? 

Yes. Outsourcing can help expedite the approval process for insurance. This is done through automation, established relationships with payers, and preventing errors. As a result, your practice will be able to bill your insurers for claims more quickly than if they were processing them internally. 

Is outsourcing credentialing safe and compliant? 

Yes. Professional credentialing services like Credex Healthcare have systems in place to guarantee high levels of accuracy when handling data, which includes the encryption of all data. Professional services also adhere to all applicable standards (NPDB, CMS, CAQH) and provide your practice with audit-ready documentation to meet both HIPAA and accreditation requirements. 

Conclusion 

Outsourcing medical credentialing services provides a transformative return on investment by resolving issues such as delays, errors, and cost, enabling clinics and hospitals to focus on patient care growth. With statistics showing returns of over 400%, faster cash flow, and compliance peace of mind, the choice is obvious for healthcare credentialing solutions.