More than half of practices report credentialing-related denials on the rise in 2021

Many medical practices working to recover financially from a year and a half of pandemic disruption cannot afford further issues with revenue flowing in, but healthcare leaders who responded to the latest MGMA Stat poll say denials related to credentialing are a growing issue for their practices.

More than half (54%) of medical practices report denials related to provider credentialing have increased thus far in 2021, while 41% say they have stayed the same and only 5% note these denials have decreased this year.

The poll was conducted Aug. 24, 2021, and had 425 applicable responses.

Regardless of geographic location, onboarding new providers and completing payer credentialing can be laborious and frustrating for the medical practice team and providers themselves. The most common responses from practice leaders experiencing increased denials include:

• Long delays in processing new provider applications. Several practice leaders report that the time lines to get new providers credentialed with payers are growing longer and seemingly “take forever,” as one practice leader noted. This latency in payer response time often results in claims from providers — who have otherwise submitted full, accurate applications — being rejected. In some cases, payers are taking as much as 100 days to provide an effective date for a new provider and not allowing for any retroactive claims following approval.
• Lack of communication from payers to medical practices. Many practice leaders who responded to the MGMA Stat poll noted that they encounter “long wait times and no correspondence if there are problems” when they reach out to check on application status or deal with errors.
• Frequently changing and varying requirements. The proliferation of sites and contacts among payers — and lack of standardization among them — often creates a mess when it comes to provider organizations accessing and updating files with payers.
• Closed networks/issues with new plans. Several poll respondents noted they are getting increasing numbers of responses from payers that their networks are not accepting new providers. Others note that new plans from some insurance companies will not include providers and subsequently deny claims for being out of network.
• Outright discrepancies. Many practice leaders said that they’ve encountered payers that have dropped providers from their group from a network, causing claims to be processed out of network. Other respondents said providers have been placed in the wrong taxonomies by the payer. These errors then require outreach to the payer to get them corrected, causing delays in proper claim processing.

This comes despite several waivers in Medicare provider enrollment being introduced in 2020 to provide relief to medical practices during the COVID-19 pandemic. The Federation of State Medical Boards also has several resources relating to waived licensure requirements during the pandemic and other emergency measures.

According to a 2019 Merritt Hawkins survey on physician inpatient/outpatient revenue, a one-day delay in provider onboarding can cost a medical group $10,122. These denials, in addition to holding up payments to providers, are often much more labor intensive for the practice. As noted in a September 2019 MGMA Stat data story, a simple denial can take a seasoned biller two to eight minutes to work, whereas a complicated denial — often involving prior authorization requirements — can take up to an hour to work, especially due to long on-hold times with payers.

Do you have any best practices or success stories to share on this topic? Please let us know by emailing us at connection@mgma.com.

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Additional resources

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