How Can Medical Credentialing Protect Clinics From Costly Audits?

Medical credentialing needs to be viewed sort of like a box that needs to be checked off, but the ramifications of it really go beyond that. In this highly regulated healthcare environment, appropriate credentialing acts as one of the best forms of protection a clinic can have against expensive audits, denied claims, and risks related to reimbursement. Whether you use a medical credentialing services, operate your own credentialing department, or partner with healthcare credentialing companies, the retention of accurate and ideally current provider information is essential.

Here is a detailed explanation of the ways in which credentialing offers clinics protection from penalties, recoupments, and audits from payers — and the reasons why it would be beneficial to work with an outsourcing expert.

1. Credentialing Provides Proof That Providers Are Legally Allowed to Bill and Collect From Insurance Companies.

Billing for services under a provider who is not properly credentialed is one of the most common reasons why payers and the Government would conduct an audit. Insurance companies to include Medicare and Medicaid are for Claims to be validated thoroughly and have no issues with account to the provider.

With insurance credentialing services, clinics can ensure that all of their providers have been confirmed to possess the following:

• State licensure
• DEA registration
• Board certification
• NPI
• Malpractice coverage
• Backgrounds free of significant issues
• Educational and training credentials

If one of these is missing or is expired an allegation of improper billing can be targeted to the clinic.

Credentialing can protect the clinic from fraud-based audits and billing violations due to the documented trail created that proves every provider meets payer and regulatory requirements.   

2. Lowers the Risk of Billing Under the Wrong Provider  

There are clinics that bill under a different provider, like a colleague, because they are waiting to get enrolled, and this is called “incident-to” misuse or “covering” billing; and it is a common red flag to insurance payers for audits.  

If a clinic uses correct provider enrollment services, it would protect the clinic from overpayment recoupments, penalties for billing fraudulently, payer network removal, and loss of reimbursement rights as every clinician would be enrolled and approved to render services.   

Instead of venturing to improperly bill due to the absence of provider enrollment and credentialing systems or having to delegate to medicaid credentialing specialists, clinics bill correctly.   

3. Prevents Claim Denials Caused by Credentialing Mistakes  

Various credentialing mistakes are the cause of a startling proportion of claim denials (20-30%), such as:  

• Expired CAQH attestation  
• Missing payer contracts  
• Incorrect provider NPI linking  
• Incorrect taxonomy codes  
• Outdated demographic details  

These credentialing mistakes contribute to not just a loss in cash flow, but they also attract payer attention, which is not a good thing, because repeated errors can cause them to audit the clinic for suspected non-compliance.

Just how medical credentialing companies help clinics maintain cleaner claims and gain higher first-pass acceptance and lower audit triggers.

4. CAQH Profiles Updated as a Core Necessarily for an Audit

CAQH is a central verification system that almost all commercial insurance companies use. When CAQH has a blackout, discrepancy, or is improperly attested, payers may see the clinic as noncompliant.

A credentialing services provider for medical insurance does:

• CAQH attestations quarterly
• Uploads of documents
• NPI and taxonomy verifications
• Licenses and certificates updates
• Accurate CAQH records provide a clearer picture and lower the risk of payer data audit.

5. Affects Compliance With Medicare and Medicaid

ceder Medicare and Medicaid are government payers that have the angle for most credentials. The importance of these is to lower the risk of non-compliance that results in costly and high-risk audits.

With Medicaid credentialing and hospital credentialing services help clinics with compliance on:

• Revalidation cycles
• PECOS
• Provider control and vetting
• Fingerprinting and identity verification
• Medicare rules per state

Because their system is the one that gets audited the most, credentialing is your clinic’s first defense line.

6. Protects the Clinic During Payer Contract Audits.

Insurance companies inspect their providers every so often to assure their legitimacy. 

Some areas of focus are:

• Active Licenses
• Updated malpractice insurance
• Board certifications
• Signed payer contracts
• Practice location
• Specialty

Clinics that work with credentialing companies suffer negative audit outcomes the least because their credentialing files are ready for audits. 

7. Prevents Revenue Recoupment and Takebacks

When payers find out that there was not any proper credentialing of a provider during service, they can recoup all claims like the service was medically necessary.

This recoupment can lead to some clinics losing tens of thousands of dollars due to poor credentialing.

Ensured effective dates and proper documentation of approvals for contracts and confirmations of enrollment aid credentialing services to prevent payers from denying payment.

8. Strong Compliance With an Audit Trail

• Proof not an assumption.
• A proper credentialing provider offers
• Electronic credentialing documents
• Log of communications with payers
• Submission confirmations
• Approval letters
• Revalidation history
• Tracking of expiration

This documentation saves clinics from audit disputes and proves compliance.

9. Provider Enrollment Reduces Human Errors

Claimed errors are some of the most requests of audits from credentialing. With smaller clinics who have limited employees, it becomes a great challenge of tracking several things such as providers, deadlines from payers, compliance changes, CAQH updates. 

Working with the best credentialing companies reduces errors by having: 

• Credentialing teams that are assigned specifically to you
• Tracking software that is exclusive to us. 
• Automated reminders of things about to expire. 
• Workflows that are standardized and consistent.
• Experiences from many different specialties. 

With oversight and compliance, it reduces risks much more than before.

10. Helps Clinics Stay Prepared for Rapid Regulatory Changes

Payers change their requirements for credentialing often. Changes are sometimes made to: 

• Change the specialties a provider can enroll in.
• Change the level of a background check.
• Change the level of Medicaid screening.
• Change how often and when a provider needs to be credentialed again.
• Change the kinds of a taxonomy.
• Change how long enrollment can take.

With our services you will have all changes monitored, and we will keep you compliant.

Conclusion: 

It's not just a bureaucracy for clinics, but compliance is the weakest part, and we protect clinics from financial losses, regulatory penalties, and scrutiny from payers.  

Working with services that provide medical credentialing, or insurance credentialing allows clinics to tighten a healthy revenue cycle by keeping audits ready, keeping denials lower, getting paybacks and reimbursements faster, and protecting their revenue cycle.

So basically if you do a good job when it comes to credentialing, that means you also do a good job when it comes to compliance, leading to not a lot of risk when it comes to audits, therefore protecting your revenue to the max!