Easy Physician Credentialing for Medical Practices

July 13, 2015

To ensure your medical practice does not leave money on the table, proper physician credentialing is a must.

Physician credentialing is, by anyone's measure, a tedious task. Practices that wish to contract with third-party payers must attest to the competency and qualifications of their doctors through a process that involves data collection, source verification, and committee review. For starters, they must verify their license, experience, certification, education, training, malpractice coverage, clinical judgment, and character. They also must obtain hospital privileges, successfully enroll their doctors in health plans as participating providers, and research any malpractice or adverse clinical occurrences.

Such legwork helps ensure patient safety, but it also creates an administrative burden for office managers. "It is a time-consuming process, but an absolutely critical one," says Ken Hertz, a consultant with Medical Group Management Association Health Care Consulting Group. "It always takes longer than the practice thinks it will, and if you don't do it right you run the risk of not getting paid."

Indeed, physicians who are not properly credentialed by an insurance company may not be reimbursed, or paid on time, for treating patients covered by that plan - a direct hit to revenue. The patients the physician does see may also be charged a higher out-of-network copay and deductible, which are harder to collect. "Some practices just absorb that as a loss, and some try to collect the higher deductible from the patient, but a great deal wind up in collections," says Gerry Malloy, a partner with medical practice consulting firm Global Health Management Services, noting inefficiency can also contribute to higher administrative costs. "That's how it impacts your bottom line. Many practices underestimate the importance of proper credentialing, but it can have a major impact on your revenue cycle."

Here's how the experts say your practice can perfect the credentialing process.


The initial submission of credentialing applications for a new physician is a labor-intensive process that can take between 90 days and 180 days to complete. But that's merely step one. Most payers, hospitals, and surgical facilities also require periodic recredentialing of specific documents. "Recredentialing tends to be staggered, so the smart practice will literally use an Excel spreadsheet to develop a database of every provider in their practice, with information on their licensure, their Drug Enforcement Administration numbers, their Medicaid and Medicare numbers, anything that will need to be resubmitted, and when the renewal dates are," says Hertz.

Larger groups and those with deeper pockets often invest in credentialing software or Web-based solutions, which help to automate work flow and integrate practitioner quality data. Others outsource the credentialing process entirely.

But smaller practices typically handle such submissions manually, making it all the more important to designate a point person to manage and maintain the provider database on an ongoing basis. Your "credentialing czar" should be detail-oriented, says Hertz, and able to submit on-time and accurate forms as minor mistakes can delay the process or cause applications to be rejected. He should also be skilled at cultivating a professional relationship with the points of contact at payers, hospitals, and healthcare agencies. "Make friends with these people because these are the people you are going to need," says Hertz. "We all know very well from everyday living that if you've got a good relationship with somebody it's remarkable how things get done that were otherwise impossible."

The best internal systems use an electronic tickler file, giving your practice a heads-up when renewal deadlines draw near. Don't wait for the payers to notify you. "You might get a calendar pop-up 90 days before the deadline that tells you Dr. Smith's Medicare number or state licensure needs to be renewed," says Hertz. "You can't leave it to chance. It's your duty as the administrator to make sure that that happens properly or to hold the person whose job it is accountable."


Physician credentialing is a lesser undertaking for small practices, notes Hertz, as there are fewer providers to manage. "Larger practices sometimes get into the position of hiring a physician and the only way the billing department finds out there's a new doctor is they start getting charges from them, but they haven't been credentialed," says Hertz. Thus, larger medical practices need to emphasize coordination and communication between human resources, upper management, and the practice manager. "All of these pieces are connected," he says.

Where new recruits are concerned, practices should begin the credentialing process right away to allow for processing time and ensure they can begin billing for the physician's services on day one, says Patrick Boyle, vice president and director of managed care for Catalyst Consulting. Don't wait for their start date. "You want to make sure you get a head start as soon as possible," he says. To encourage the swift submission of key signatures and copies of diplomas by the physician, practices might also consider tying the receipt of those documents to the physician's start date.

Boyle notes that Medicare does not allow practices to submit a credentialing application any earlier than 60-days prior to a new physician's start date, but it is also one of the few payers that will credential physicians retroactively, meaning your practice can retro-bill for Medicare patients seen before the doctor was officially credentialed. Many of the commercial payers will not. As you bring new physicians into your fold, then, it may make sense to allow them to phase in their schedule as payer credentialing comes through.

To ensure your practice does not leave money on the table, proper credentialing is a must. The most effective managers put timelines in place, create physician databases, and assign a point person to keep well ahead of the deadlines. "It's not brain surgery, but it does need to be thoughtfully addressed in an organization and standardized in a concrete fashion," says Hertz.

Shelly K. Schwartz,a freelance writer in Maplewood, N.J., has covered personal finance, technology, and healthcare for more than 17 years. Her work has appeared on CNBC.com, CNNMoney.com, and Bankrate.com. She can be reached via editor@physicianspractice.com.

This article originally appeared in the July/August 2015 issue of Physicians Practice.