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1.10.13 blog

Revenue Cycle Issues Make Provider Enrollment an Even Bigger Issue in Healthcare

Traditionally, hospitals, healthcare organizations, and medical groups have viewed provider enrollment in health plans as a back-office function, lacking strategic importance. More recently however, a number of changes in the industry have caused this function to be viewed in a much more important light.

First, hospitals, healthcare organizations, and large medical groups have employed providers in record numbers, taking on the responsibility of their credentialing and provider enrollment. Many of these employers initially underestimated the importance of a timely credentialing and enrollment process and incurred significant financial losses as a result. Second, credentialing and enrollment processes are woefully inefficient in light of current volumes and reporting demands. Many medical service professionals continue to use manual processes to submit applications and associated documentation and lack the tools they need to meet demand. Third, hospitals, healthcare organizations, and medical groups are actively seeking solutions that will improve efficiency and revenue cycle management. More than eighty percent of medical services professionals in our recent survey indicate that their top priority is to reduce the time it takes to enroll providers.

Provider Enrollment Gaining Importance

While hospitals, health care organizations, and physician groups may employ a provider on his or her first day of employment, they cannot receive reimbursement from a health plan for services rendered until the provider has been fully credentialed, privileged, and enrolled in the health plan. Moreover, most health plans will not retroactively reimburse for services performed by these providers prior to full credentialing and enrollment.

Healthcare organizations are incurring losses as they buy physician practices and take over their management. One key factor behind these high losses is the unfamiliarity of hospital employees with the complexities of the provider enrollment process. Hospitals are finding that they are soon overwhelmed by the credentialing burdens they have assumed.

It is not surprising that results from the Echo/DecisionHealth 2016 survey show that hospitals, healthcare organizations, and medical group practices are placing a higher emphasis on provider enrollment than in years past.

Nearly 70% of respondents to our survey say that improving the provider enrollment process has become a higher priority in the past year. This represents an almost ten percent increase over similar research conducted by Echo in 2015.

Priorities for Improvement

Respondents indicate that a number of initiatives are “very important” to them as it relates to provider enrollment. Of highest importance is “reducing time to enroll providers.” Enrollment timeframes have a direct impact on the revenue cycle of an organization. Shortening this timeline can reduce accounts receivables claims that are pending due to provider enrollment and equate to less dollars at risk of being written-off due to lack of timely provider enrollment with payers.

The Two Biggest Challenges

The two biggest challenges faced by enrollment professionals are collecting necessary provider data and dealing with the complexity of payer applications. “Credentialing and other systems that are used to establish contracts between providers and health plans are riddled with redundancy, with many organizations collecting virtually identical information. The typical physician spends more than three hours annually submitting nearly 18 different credentialing forms with staff spending an additional 20 hours” per provider.

Woeful Inefficiency

Our research shows that approximately 56.6% of respondents use some type of software solution to help automate their processes—packaged provider enrollment software (46.3%), packaged software not specifically designed for provider enrollment (5.7%), or in-house customer software (4.6%). However, many respondents still manage their work using Excel spreadsheets (42.7%), calendar alerts (25.3%), Word documents (16.0%), or manual processes (14.2%).

This blog post excerpts an article in the Q3 2016 issue of Provider Advisor. Complete the form below to download the issue.

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