Contracting & Credentialing: The often neglected keys to practice success
July 28, 2020
Independent practices have been facing unprecedented challenges, especially in today's pandemic based reality. Two of the most fundamental aspects of starting and running a practice are often the aspects that most practices ignore: payer contracts and credentialing. Despite their essential nature many practices put these tasks last on their respective to-do lists, but there is a better way of doing business. Making sure these two elements are addressed in a methodical, data-driven, and thoughtful manner is key to every practice's long term success.
Payer Credentialing: administrative headache, payer cost saving, but a keystone habit
Before a provider can see their first patient, they have to sign a contract with each payer and undertake a time consuming and a redundant administrative process called "Credentialing." Instead of taking a proactive approach to handling this, most practices tend to be reactionary with their credentialing notices from the payers and their expiration emails. Instead, this process should be a major focus of the practice.
An inefficient credentialing internal process can reduce your revenue potential anywhere between 5%-10%. For a sizable practice, that can equal thousands of dollars in lost revenue.
Why are health plans constantly checking and rechecking a provider's credentials when they are already licensed in the state and have their CAQH profiles? The answer is that asking providers to perform redundant credentialing paperwork is a money-saving strategy for the payers. The payers know that a certain percentage of the providers will forget to stay credentialed, make mistakes, or not confirm they have been credentialed when the payer "loses" the paperwork. In each of these instances, the payer refuses to cover any procedures or encounters that occur during the period that the provider isn't credentialed, and therefore saves them significant amounts of money at the provider's expense.
How are physician groups supposed to recruit providers and grow a practice if it takes 6 months to get providers credentialed? Credentialing can be a cumbersome, time consuming, and error-prone task. Not to mention, the individual most often tasked with credentialing in the office is usually an entry-level employee and experiences a high turnover rate. One straightforward solution is to outsource credentialing. This can be a great way to ensure the task is handled, and there is continuity in the process. Always shop rates, and find a group that comes highly rated. If they can't provide a wealth of references, move on quickly.
If you are going to keep credentialing in house, make sure to task someone dependable with the task that has the bandwidth to constantly track all the credentialing timelines and deadlines. Maintaining some sort of spreadsheet or online tracking tool will also ensure you are staying up to date with your credentialing needs.
Payer Contracting: Keeping an eye on your reimbursements
Contracts are the most important element of your practice and predictor of future success. They dictate aspects around expanding locations, hiring additional providers, bringing on partners, and how profitable your practice ultimately is. Many providers think their contract isn't something they have the power to alter, as they have no leverage, it would be too costly, or too time-consuming. The payers bank on this perception to maintain poor reimbursement rates for most private practices and use those poor rates as yet another cost-saving mechanism in their ever-increasing systemic waste.
It is overwhelming when going up against your payer organizations and the maze of gatekeepers, legal departments, and advanced software they have at their disposal. Much like credentialing there are two broad solutions for obtaining better reimbursement rates: Assigning the task to someone in your organization, or outsourcing to a reputable negotiator.
Negotiating your rates can be a lengthy and complicated process, so it is better to not be reactionary and have a long term solution in place. It's understandable that most practices are busy places and don't have the time or energy to start renegotiating their reimbursement rates. They have so much on their plate. With that in mind, utilizing an experienced negotiator can pay for itself, as long as you find someone that charges based on performance. Ensure that the negotiator's incentives are aligned with your rate increase needs and like credentialing, experience, and professional references should be key determinants in choosing your negotiation team.
About the author:
Cameron Wood is head of client services at NGA Healthcare, a physician advocate who works with small and mid-sized physician practices to negotiate their reimbursement rates. Cameron is an expert at forging business relationships, branding, and working with these groups to help discover their leverage against insurance payers.