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IT modernization

Does your provider credentialing process need a technology intervention?

Article Mar 8, 2024 Read time: min
By: Bala Vedagiri

Healthcare’s revenue model is struggling with a credentialing crisis.

Inefficiencies throughout the provider verification process are making it harder and costlier for healthcare organizations to confirm care providers are licensed and accredited to treat patients. These issues slow billing and insurance payments, which disrupts revenue cycle management (RCM) for providers and health systems and, in some situations, interrupts patient care.

If this all sounds a bit familiar—if your organization still relies on photocopies, fax machines or other manual, paper-based procedures to credential providers—it’s time to modernize.

Consider this your credentialing program’s technology intervention.

The operational case for digital credentialing

Digital credentialing can drive significant operational improvements and savings.1 Connecting front- and back-office systems with modern credentialing software and systems helps to:

  • Streamline data collection and manage a data governance program
  • Reduce common errors using generative AI and machine learning2
  • Accelerate approval cycles that now range from 60 to 180 days3
  • Strengthen privacy and security as part of a comprehensive cybersecurity strategy
  • Integrate credentialing procedures in a security-rich cloud environment
  • Improve compliance with various federal, state and local laws and regulations

Simply put, technology makes it faster and easier for healthcare stakeholders to share, review and verify information. These advances enhance the overall credentialing experience and, in turn, help to optimize RCM functions for providers and payers.

The financial upside of digital credentialing

Beyond operational benefits, digital credentialing can yield administrative savings.

One of our hospital system customers was spending US$7 million annually on provider credentialing operations. By rewriting code, modernizing their systems and providing additional technical support, we estimated the organization could lower the expense to US$4 million.

There’s also the potential for income generation.

For example, a physician generates roughly US$2.4 million in revenue for a hospital or health system each year.4 That’s roughly US$9,200 per day based on a five-day work week.

So, theoretically, every day that provider waits for privileges to be approved, the hospital stands to lose about US$9,200 because the provider could perform services at another facility where they have privileges. By shaving 10 days off the credentialing process, the hospital could produce a US$92,000 bump in income.

While the exact figure would vary across hospital systems depending on provider network size and the number of patients treated, the income-generating potential still translates.

For an industry struggling with soaring costs, workforce shortages and lingering effects of the pandemic,5 the potential financial benefits of digital credentialing hold great appeal.

Theoretically, every day a provider waits for privileges to be approved, the hospital stands to lose about US$9,200.

Three steps to implement digital credentialing

A successful technology intervention is a multistep endeavor that begins with a comprehensive review of your current provider credentialing processes.

1. Analyze processes and systems

Look for pain points and areas where technology can improve workflows. Process inefficiencies typically include manual data entry, duplication of efforts, lack of transparency and delays in verification. Common errors in records include outdated accreditation from the Council for Affordable Quality Healthcare (CAQH) or incorrect information and taxonomy codes on provider W-9 profiles.

2. Develop a transformation strategy

Working closely with your organization’s senior leadership and key advisors, define goals for modernization that align with your organization’s overall technology strategy. Your plan should address:

  • Vendor selection: Evaluate software vendors and partner with companies whose offerings fit your organization’s needs, budget and long-term goals
  • Process simplification: Design plans to standardize workflows and streamline data collection and management to support the transition to a unified platform
  • Compliance and regulatory requirements: Ensure your solution complies with—and facilitates ongoing adherence to—regulatory and health plan requirements and accreditation standards of the CAQH, National Practitioner Data Bank and state medical boards
  • Organizational change management: Develop a structured approach to lead change, engaging employees throughout the transition and communicating early and often to address concerns, gain buy-in and manage expectations
  • Security and resiliency: Establish strong security measures, governance frameworks and contingency plans to safeguard systems, with an eye toward implementing zero trust protocols
3. Execute your plan

 Depending on the size and scope of your modernization, it may take anywhere from 4 to 10 months to implement digital credentialing. Plan for a series of sprints, allowing extra time for data migration, staff training and system integration intervals.

After several months of onboarding providers, begin tracking key metrics like cost reduction, time savings, quality improvement and customer satisfaction. These measurements validate the business impact of digital credentialing and help pinpoint areas for continuous refinement.

Healthcare credentialing in the digital age

Digital credentialing isn’t a cure-all for healthcare’s revenue management crisis. However, by using technology to automate or improve elements of the provider verification process, hospitals and health systems can escape many negative cycles that threaten profitability and impede continuity of care. 

Bala Vedagiri is a director in Kyndryl’s healthcare division and a partner within Kyndryl Consult.