The case for standards: uniform physician credentialing process can save physician practices and hospitals time, money and frustration

Health Management Technology, Oct, 2004 by Dave Hill

Imagine: Your network or hospital contracts with a new physician. That physician visits a Web site, enters his or her data, and it is instantly transferred to your internal systems. Then overnight, the credentials are verified without human intervention. Two months later, the physician visits the Web site to change a practice address. That night, every system that relies on the information is instantly updated, including claims processing, directory systems, recruiting and even physician relations.

Does this seem far-fetched? Today it might be, but only because most healthcare technology executives often regard credentialing as a necessary evil, rather than as an opportunity to achieve competitive cost advantage and drive accurate, complete provider data throughout the organization. What if there was a way to cut credentialing expenses by 75 percent or more, and make the credentialing process one of the most valuable parts of an organization's data?

By adopting a standardized approach, credentialing can be realized as an asset to individual healthcare organizations and to the industry as a whole.

Credentialing Today

Today, almost all payers and healthcare organizations verify physician and other healthcare professionals' credentials. Several national accrediting bodies dictate which credentials to verify, where to verify them and how often they should be reviewed.

The process involves collecting data (i.e., the credentialing application) and basic validation of license to practice, education/training, malpractice coverage and claims history, DEA/CDS certificates, hospital privileges and whether or not the physician or healthcare professional has been sanctioned.

Without a doubt, these accrediting bodies have raised the quality standards for the credentialing industry, and their efforts have protected millions of healthcare consumers from poor-quality or unscrupulous physicians. However, while these entities have standardized the credentialing content, the systems and processes that comprise the day-to-day tasks have been left to the individual organizations. This has created redundant and inefficient credentialing practices.

From the perspective of a single healthcare organization, the process to collect and verify credentials is relatively straightforward: Collect data from the physician via the credentialing application, enter the data into a database and verify the information according to credentialing standards. If everything checks out, send the paperwork to the credentials committee for approval, update relevant systems, and the physician can begin practicing.

Automation Advances

Not too long ago, these processes were conducted by hand. Applications were photocopied and filed, letters to verity credentials were tracked with a checklist, and profiles were manually prepared for committee review.

More recently, many credentialing departments have automated many of these tasks. Some have built their own databases and workflow systems that simply store data and print necessary reports. Others have purchased commercially available software applications to automate and track nearly every step of the process. These systems can pre-populate applications, contact sources electronically, process batches of verifications at once, scan images of documents and provide ongoing task management, so that no item is forgotten or lost.

These technological advances have done wonders to improve processes within healthcare organizations. However, these systems cannot solve the costly redundancies and inefficiencies among healthcare organizations.

Practically identical credentialing applications are distributed by multiple organizations to each physician--often at different times of the year--and each organization conducts its own validation of the exact same credentials. In some cases, physicians have reported completing upward of 20 credentialing applications. This equates to an industrywide total of 20 data entry clerks, 20 software and support systems and 20 independent verifications of the credentials.

The Case for Process Standards

Process standards are critical to bringing efficiencies to the credentialing industry. Each spoke of the credentialing wheel can benefit from consistently applied practices, but we must all work collectively to make it happen. Individual healthcare organizations can spend upward of $60 to $70 per physician to perform the credentialing function. However, if these organizations could begin to view credentialing data and the collection process as competitor-neutral, immense savings could be realized through centralized, third-party processing and shared expenses.

Many physicians and physician groups also have recognized the problem of redundancy for years. In fact, several states have enacted laws that require healthcare organizations to use a common credentialing application. Unfortunately, this has only slightly reduced the burden for physicians, and it does relatively nothing for organizations independently collecting the data. A nationwide, centralized process for collecting this data would reduce the procedure to a single, uniform process.