Launching a healthcare practice is a major milestone. However, without the correct paperwork, it can quickly become overwhelming. For practice managers, providers, and owners, credentialing may seem like a simple formality, but it is key to your practice’s financial and operational stability.
Unfortunately, errors in this foundational process have severe, far-reaching consequences. In fact, studies show that 85% of credentialing applications are delayed or denied, and the resulting revenue loss can be crippling for new practices where cash flow is critical.
Let’s explore the true financial and ethical costs of credentialing mistakes and detail the proactive steps you must implement to avoid them.
1. The Financial Fallout: More Than Just Denied Claims
Credentialing errors can devastate your practice’s bottom line. Delayed payments, missed revenue, and claim denials are just the beginning.
- Lost Billable Revenue (The Daily Drain): If your provider cannot see insured patients due to credentialing delays, your practice loses income immediately. Industry data shows that an uncredentialed provider costs an organization an estimated $7,500 to over $9,000 per provider per day in lost billable revenue. Losing just a few weeks of revenue can be crippling for a new practice.
- The Denial Trap: Inaccurate or incomplete enrollment forms lead to a cycle of denials. Your billing team then spends hours reworking claims (which costs an average of $25 per claim in administrative labor). Worse still, many commercial payers do not allow retroactive billing, meaning those losses are permanent.
- Cash Flow Disruption: For a new practice, cash flow is critical. Prolonged payment delays force the practice to dip into operational savings, potentially delaying payroll or vendor payments.
2. Patient Trust and Safety at Risk (The Legal Exposure)
Credentialing errors don’t just hurt your finances—they jeopardize patient trust and safety, exposing your practice to severe legal liability.
- Risk of Negligent Credentialing: A mistake in checking credentials can allow an unqualified person—or one with a history of sanctions—to perform procedures. This can harm patients and lead to devastating lawsuits under the doctrine of Negligent Credentialing. This doctrine holds the practice legally liable for failing to perform its due diligence.
- Reputation Damage: In today’s digital world, patients look up providers online. A credentialing problem (e.g., being listed as “out-of-network” or “non-participating”) can hurt your practice’s reputation before it even starts. Conversely, maintaining a flawless credentialing process builds peer and patient trust.
3. Operational Chaos: A Hidden Time and Staff Drain
Fixing credentialing errors is a time-consuming process that strains your staff and leads to burnout.
- Administrative Overload: Hours spent on resubmissions, researching denied claims, and constant payer communication add immensely to the administrative burden. Fact: Credentialing teams often spend 20+ hours per application just chasing down documents and correcting errors.
- High Turnover Risk: This inefficiency stalls growth and drains resources. Provider dissatisfaction due to credentialing delays (which prevent them from starting work) can lead to high turnover. This disrupts care continuity and increases recruitment costs (often 1.5x the provider’s salary).
Proactive Steps to Avoid Credentialing Errors
The financial and operational costs associated with credentialing errors are too high to ignore. To protect your new practice, implement these best practices immediately:
- Streamline Processes with Digital Technology:
- Action: Use specialized credentialing software to automate and simplify workflows. This includes automated reminders and Primary Source Verification (PSV) checks.
- Impact: Automation drastically reduces manual work (the source of most errors) and accelerates the onboarding process.
- Ensure Data Synchronization:
- Action: Mandate that all provider data—including NPI, Tax ID, and addresses—is perfectly synchronized between your internal system, the CAQH profile, and the NPPES registry.
- Impact: This prevents the data mismatch denials that stall payments.
- Invest in Expertise and Audits:
- Action: Partner with credentialing professionals to ensure accuracy and efficiency. Perform regular internal audits (mock audits) against CMS and NCQA standards.
- Impact: Experts keep tabs on complex payer policies, guarantee timely submissions, and reduce the likelihood of audit failure.
Let eClinicAssist Help You Thrive Don’t let credentialing errors derail your new practice. At eClinicAssist, we specialize in simplifying the credentialing process for healthcare providers. Our team makes sure enrollments are accurate and submissions are on time. We also manage all regulatory compliance. This way, you focus on providing great patient care.
Contact eClinicAssist today. We can help your practice avoid costly credentialing mistakes and achieve lasting success.
