Credentialing: Why You Should Complete the Process Before a Provider Starts!

Credentialing can make or break your revenue cycle from day one—yet many organizations overlook its impact. Most revenue cycle leaders understand this and try to stress its importance to senior leadership and doctors. However, when leadership brings on providers before completing credentialing, it creates significant revenue risks. That risk could be hundreds and thousands of dollars you can not recoup.

This article provides a high-level overview of why credentialing is crucial, the financial risks of incomplete credentialing, and strategies to avoid costly pitfalls.

Why Providers Start Before Credentialing is Complete

In some cases, bringing on a provider before credentialing is finalized is unavoidable due to: ✔ Shortages in key specialties

✔ Market demand for a new specialty.

However, avoidable scenarios often create unnecessary financial strain:

❌ Providers onboarded without proper communication and documentation

❌ Providers starting too soon before credentialing is processed.

This lack of coordination can result in delayed payments, revenue loss, and operational chaos.

How Long Does Credentialing Take?

Credentialing timelines vary widely:

• Medicare: ~60 days (2 months)

• Medicaid: 2 months to a year, depending on the state

• Commercial Payers: 3–9 months (often dependent on Medicare credentialing first)

• Dental Commercial Payers: - 30-120 days

• Dental Network Payers - 60-360 days

Since 70%+ of your patient base typically falls under Medicare, Medicaid, or major commercial payers, ensuring providers are credentialed before they start is critical to minimizing revenue disruptions.

The Financial Risks of Incomplete Credentialing

If a provider starts seeing patients before credentialing is complete, your organization faces two major risks:

🔹 Limited Productivity – The provider may be restricted in the number of patients they can see, reducing revenue potential and impacting the bottom line. It may also make the doctors look unproductive, which is another situation.

🔹 Unbilled or Written-Off Charges – If the provider sees patients before credentialing is approved, claims may sit unbilled for months or be outright denied, forcing a write-off.

Real-World Revenue Impact Example

Scenario: A provider starts on January 1st, but their credentialing isn’t completed until June 1st. 📉 Impact: Claims from January 1st – May 31st could be non-payable, leading to significant revenue loss. 💰 Loss Estimate: If a provider generates $50,000 monthly claims, that’s $250,000 in potential lost revenue for the year!

Some payers backdate participation to the application date, but many do not. Without proper credentialing, these claims may be permanently denied—or, at best, delayed. Here is the big kicker: if you see an 'in-network" patient and your doctor is not credentialed, you absolutely CANNOT bill the patient for those charges!

Why Not Just Bill the Patient?

While some organizations attempt to bill the patient for services rendered during the non-participation period, this is a customer service nightmare.

🚨 Patients expect their insurance to cover services—not to receive unexpected bills due to an internal credentialing issue. Unless a patient is explicitly informed before their visit that their provider is not credentialed, billing them can damage trust, reduce patient retention, and lead to complaints.

Alternative approach: Some organizations bill out-of-network and take the reduced non-participation rate. However, this is difficult to track and still burdens the patient financially.

How to Avoid Credentialing Pitfalls

To protect revenue, organizations must establish a structured credentialing process with clear responsibilities. Common pitfalls include:

🚫 Poor Technology or No Technology – Forces manual work, resulting in mistakes, and delay processing

🚫 Poor Credentialing Processes– Delays the entire process

🚫 Incomplete Data Gathering – Delays the submission process

🚫 Incomplete Applications – Leads to rejection or rework

🚫 Lack of Follow-Up – Causes unnecessary delays

🚫 Poor Communication with Billing Teams – Prevents timely claim submission

🚫 Frequent Rework – Wastes time and resources

🚫 Failure to Communicate with Leadership – Leads to unrealistic expectations

Solutions:

✅ Develop a Standardized Credentialing Process – Document every step to ensure consistency

✅ Use Credentialing Software – Automate tracking, follow-ups, and application submissions

✅ Monitor Outsourced Credentialing – If you outsource, stay engaged to hold vendors accountable

✅ Improve Internal Communication – Ensure leadership, revenue cycle, and billing teams are aligned

✅ Track and Report the Financial Impact – Leadership must understand why credentialing delays matter

Final Thoughts: Credentialing is a Revenue Cycle Priority

Credentialing is not just an administrative task—it’s a critical revenue cycle function that directly impacts cash flow, provider productivity, and patient experience.

📌 Key Takeaway: If a provider must start before completing credentialing, leadership needs to plan for the financial impact and adjust revenue expectations accordingly.

💡 Pro Tip: Invest in credentialing software that fits your organization’s needs but customize it for maximum efficiency. Off-the-shelf solutions rarely work without proper setup! If you need recommendations, I am happy to provide you with some of the best in the industry!

If you have any questions or need assistance in setting up your credentialing department, implementing standard operating procedures and technology, or outsourcing, we can help you at MaximizeRCM.com. Or DM me directly! Cissy Mangrum

#RCM #Credentialing #RevenueCycle #HealthcareFinance #PracticeManagement