Hospital system CFOs and revenue cycle directors aiming to improve financial performance can find untapped revenue in an unexpected place — the medical staff services department (MSSD).
This content is sponsored by The Greeley Company
Credentialing and enrollment are key business processes in hospital systems through which medical practitioners become employed, revenue-generating members of an organization. Although these processes are crucial for verifying practitioner credentials and ensuring professional quality, MSSDs have been perceived in the past as a cost of doing business rather than a strategic profit center. Many organizations are integrating enrollment within the MSSD to achieve greater synergies with functions that utilize very similar information and processes, afford potential cost savings by reducing duplication and have a positive impact on revenue by shortening turnaround time.
Credentialing and enrollment can pose major operational challenges for hospital systems and their affiliates. The disparate requirements of payers, duplicative processes and applications and inefficient, paper-based communication can cause significant delays in getting new clinical staff on board and reimbursed for patient care. When this happens, hospitals' revenue cycle performance can suffer from delayed payments, greater days in accounts receivable and even increased write-offs.
In the scope of common key performance indicators, MSSDs have largely flown under the radar. Until recently, the financial models of most hospital systems calculated the staffing and operational expenses of the MSSD as a fixed cost of doing business – and left it at that. But hospital CFOs today are seeing value in investing in MSSD processes to decrease the time it takes to get new practitioners treating patients and generating revenue.
"Healthcare organizations can see substantial returns from investing in improvements to better align or integrate their credentialing and enrollment processes," Amy Niehaus, senior consultant for The Greeley Company, a national healthcare consulting and professional services firm based in the greater Boston area, told Becker's Hospital Review.
This article discusses how credentialing and enrollment practices affect financial performance and identifies three ways hospitals and health systems can positively impact their revenue cycles by optimizing their MSSDs and credentialing processes.
Traditional credentialing and enrollment is inefficient and duplicative
Credentialing and privileging are the first steps in ensuring practitioners can see patients, practice medicine and earn revenue.
Credentialing involves obtaining and validating a practitioner's qualifications and experience. Accreditation organizations, like The Joint Commission and the National Committee for Quality Assurance, require medical staff professionals (MSPs) verify this data with primary sources, which often means direct communication with educational and training institutions, hospital affiliations and employers as well as licensing agencies, among others.
After verifying application materials, medical staff leaders determine what clinical services a physician is qualified and competent to provide, also known as privileging.
Altogether, average turnaround time for a single practitioner — from receipt of the initial application to final approval by a governing body — takes 50 to 90 days, during which an employed practitioner can neither see patients nor bill for services.
In some cases, all of this happens before a single enrollment application is submitted to insurance plans. Enrollment involves submitting practitioner credentials to a health plan's internal credentialing review department, which verifies the data again, as well as providing contract and billing information for the plan to establish the physician in the appropriate networks. Practitioners cannot bill payers for reimbursement until they receive payer approval. Processing time varies by insurer, but may take anywhere from 60 to 120 days or more, according to Ms. Niehaus.
The financial costs of lengthy credentialing, enrollment processes
When it comes to practitioner credentialing and enrollment, time is money. Although most hospital systems recognize these processes can be slow and resource intensive, few executives understand how much long turnaround times cost their organization's bottom line, according to Ms. Niehaus.
Consider that employed practitioners in the process of being credentialed may still be paid salary by the organization — even though they are not seeing patients, billing for services or serving as part of the medical staff. This means a new practitioner is actually an expense to the institution every day he or she is not fully onboarded.
Salary is not the only cost related to noncredentialed practitioners. Hospital systems are also missing out on potential revenue due to practitioners' inability to see patients. The cost of one month's delay in credentialing for the average primary care physician can amount to more than $30,000 in lost revenue. The amount increases substantially for higher-billing specialties, like orthopedics and cardiothoracic surgery.
Lengthy payer enrollment times can also disrupt cash flow. Practitioners who are credentialed and privileged, but not enrolled, can technically begin seeing patients and earning reimbursement. However, the facility and physician cannot receive payment for claims until the practitioner is enrolled with the payers connected to the patients he or she sees. When this happens, hospitals may end up holding onto claims for weeks, resulting in delayed or decreased payments. Claim write offs from commercial payers occur when enrollment takes longer than the allowable claim period from the date of service delivery
"Organizations that can expedite the time it takes to enable physicians to work and bill for services can turn new physicians from an expense into a revenue source more quickly," Ms. Niehaus says. She recommends three ways hospital systems can get practitioners earning faster.
1. Reduce turnaround times. Shaving days off of application turnaround time helps practitioners start seeing patients sooner. This can have a substantial impact on hospitals' bottom lines.
In fact, The Greeley Company offers a free "revenue impact calculator" enabling CFOs to estimate the amount of increased revenue their organizations can generate by reducing total turnaround days. "For some larger organizations, found revenue due to reduced turnaround can total millions of dollars annually," Ms. Niehaus says.
However, improving efficiency and reducing turnaround is not easy for organizations facing thin margins and downward pressure on costs. MSSD optimizations are time consuming, labor intensive and require expertise in enhancing medical staff operations — resources few hospital systems have in-house.
Instead, hospital systems have seen value in partnering with external arbiters to achieve significant decreases in application turnaround time. The Greeley Company, for instance, helps institutions reduce turnaround time by incorporating leading practices and streamlining the verification process from an average of 45 days to 21 days, which greatly reduces the overall credentialing process from 90 days to 45 days or fewer, helping practitioners start earning revenue sooner, Ms. Niehaus says.
2. Gain delegated status. Earning delegated status with payers is another way hospital systems can get practitioners enrolled and earning reimbursement sooner.
Delegation is when a health plan authorizes another entity, such as an IPA, PHO, CVO or multihospital system, to perform a portion or all of its credentialing process after the health plan has evaluated the entity's ability to perform this process in a compliant manner. Otherwise, hospital MSSDs and payers separately validate the same practitioner documentation for credentialing. The primary benefit of delegated status is the reduced time it takes to enroll a physician with a commercial payer and for a physician to begin billing for services. By eliminating duplicative credentialing processes between payer and provider, delegated credentialing helps payers reduce administrative and operational costs and gives providers better control of their revenue cycle.
"The Greeley Company is seeing more health systems seek delegated status from commercial payers," Ms. Niehaus says. "Especially with the growing number of employed practitioners, hospitals are looking at delegated credentialing to speed up enrollment and reduce receivable write-offs and claim holds."
By eliminating the duplicative and time-consuming enrollment process following a traditional credentialing process, physicians can begin treating patients and submitting claims much earlier as their effective date with the health plan may be as soon as they are credentialed and privileged by the hospital, depending on the payer.
3. Centralize credentialing. With the rise of integrated delivery systems, many systems are joining forces to deliver care and share economies of scale across several facilities and practices. In these instances, centralizing credentialing operations can help eliminate repetitive administrative work, thereby helping practitioners begin seeing patients earlier while lowering administrative overhead.
Health systems can centralize their credentialing processes by combining individual hospitals' credentialing departments into a single team or centralized verification office. Hospitals share the overhead costs of credentialing providers, and practitioners serving patients at more than one facility can be simultaneously credentialed to practice at any location across the system. This degree of efficiency is invaluable, especially considering practitioners would otherwise need to be individually credentialed at each and every facility.
Besides improved efficiency, centralized credentialing also helps hospital systems achieve delegated status with payers that typically prefer to delegate to organizations credentialing larger volumes of physicians, many with minimum requirements of 200 to 250 practitioners.
External resources are ideal for recovering "found revenue"
"In our experience, hospitals' internal MSSDs are highly focused on managing day-to-day operations and supporting the medical staff, making it difficult for them to tackle large-scale change," said Ms. Niehaus. "When they do try, there are often significant service level interruptions due to the lack of bandwidth to take on additional workload, or they may find it difficult to change a process that is working. It's hard and counterintuitive to overcome 'muscle memory' and get the desired results in a high-volume work environment."
Healthcare organizations can partner with external consultants and specialty service companies for expert support and guidance through MSSD process improvement.
"High-quality, efficient workflows are critically important, as it affects not only the speed with which a physician can begin billing for his or her services, but also the hospital's reputation when it comes to new physicians beginning to practice," Ms. Niehaus says, as retention of new physicians is also an important consideration to a hospital's bottom line.
Consulting experts have the benefit of years of experience improving MSSD functions at a range of organizations, and can help hospital systems avoid pitfalls in the transition between systems. While outside consultants manage the assessment, planning, implementation and training; internal stakeholders can retain focus on their day-to-day responsibilities and increase the speed to value for their organization.