Why Healthcare Practices Need a Good Credentialing Partner

Medical practices, both new and experienced, face a tremendous number of challenges nowadays. Rising inflation, higher salaries, administrative costs, billing errors and denials, and credentialing costs. All of these challenges, when combined, make survival difficult.

At the center of these challenges are two critical processes: credentialing and billing. Both of these seem simple enough at start, but can create a hell if you try to do them yourself, and with an inexperienced team. Healthcare providers enter their profession to deliver quality care, not to wrestle with paperwork. Yet, many providers try to handle the administrative task in-house.

Healthcare organizations face an average of 341 regulatory requirement changes annually that potentially impact credentialing processes alone. These frequent changes create a constantly shifting landscape. So, what is the solution?

The simplest and also the most profitable solution is to find a good credentialing and billing partner and outsource these operations. Here’s why this is a good idea.

Hidden Costs of Inefficient Credentialing

Credentialing may seem like just another administrative task, but its financial impact on healthcare practices is profound and often underestimated. When credentialing processes break down or experience delays, the consequences ripple throughout the organization.

Financial Impact of Credentialing Delays

Don’t believe our word for it. Here’s what the data tells.

Healthcare organizations lose an average of $7,500 per physician per day due to credentialing delays. And that’s just for the simple specialties; for more specialized specialists like neurologists, the daily revenue loss can exceed $8,000.

The following are some comments by Dr. James Kazlauskas, who is a Multi-specialty Practice Director:

*“When we calculated the actual cost of managing credentialing in-house, including all the hidden expenses and opportunity costs, we were shocked. We were spending nearly $85,000 annually, and that didn't even account for the revenue we were losing due to delays and errors.”*

Direct Revenue Loss

The financial impact extends beyond delayed billing. Credentialing errors cost hospitals an estimated $1.2 million annually in denied claims. Additionally, 54% of medical practices report that credentialing-related denials have increased in recent years.

These figures don't account for the administrative costs associated with resubmissions, appeals, and the staff time required to resolve these issues. In a healthcare system where margins are already tight, these inefficiencies represent a significant drain on resources.

Billing Challenges: When Small Errors Create Big Problems

We have talked enough about credentialing; let’s now discuss the medical billing challenges. Billing errors can drain even more money from your practice than credentialing. From claim submission to payment posting, errors can arise at any point, rendering the entire process useless.

High Cost of Billing Errors

Analysts estimate that unaddressed billing errors cost the average physician approximately $100,000 per year in lost revenue. For hospitals, denial rates average between 5-10% of submitted claims, representing millions in potentially recoverable revenue.

Specialty-Specific Challenges

A big reason why practices face so many denials is that they rely on generic billing services, or even worse, in-house teams. Every medical specialty is different and comes with its own unique billing challenges. For example, coding is different for each specialty; some specialties, like neurology or cardiology, require a lot of pre-authorizations, or radiology or laboratory billing have a lot of bundling rules.

In-house billing teams, or a generalized billing partner, can’t handle this. They are bound to make errors.

Nearly 30% of all medical claims are initially denied, with neurology ranking among the specialties most impacted due to its procedural complexity. Some specific challenges include:

• Complex coding requirements for neurological conditions
• Frequent regulatory updates affecting reimbursement
• High documentation standards for neurological examinations
• Requirements for prior authorizations for procedures and medications
• Telehealth billing complexities specific to neurological care

That’s why healthcare providers must choose specialized billing companies. For example, in the above scenario, the provider must opt for neurology billing services.

Benefits of a Specialized Credentialing and Billing Partner

Now that we have discussed the challenges and how much damage they can cause, let’s look at the benefits of the solution, i.e., outsourcing to specialized billing and **medical credentialing companies**.

• Specialized partners offer expert credentialing and billing, staying current with industry changes and payer requirements.
• They utilize advanced technology for automation, real-time tracking, and error reduction.
• These partnerships provide scalability and flexibility for fluctuating practice needs.
• They mitigate risk and ensure compliance with complex healthcare regulations.

Final Word

In this guide, we have tried our best to explain why every medical practice and hospital needs a good billing and credentialing partner. We reviewed how financially straining billing and credentialing errors can be.

By partnering with experts who bring specialized knowledge, advanced technology, and proven processes to these critical functions, healthcare practices can realize significant benefits. So, even if you can handle the work yourself, it is always better to outsource.

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