In a rapidly evolving and dynamic landscape of healthcare, effective credentialing is Key to whether providers are qualified, in compliance, and justified to provide care, and equally crucial to such providers because of timely reimbursement. Credentialing, however, is viewed in many cases as a laborious administrative task, with its systems of delays, denials, and lapses that jeopardise the revenue.
The good news? Monitoring the right credentialing KPIs (Key performance indicators), medical organizations can turn this essential activity into an excellent weapon that can keep and maximize revenue flow. This blog also takes a deep dive into which credentialing metrics you should pay attention to, how to track these metrics efficiently, the tools that can help ease that process, and why these KPIs are so essential to your financial health. As a practice manager, credentialing specialist, or revenue cycle leader, these KPIs are necessary to comprehend and utilize to streamline processes, avoid expensive mistakes, and maximize the amount of money your providers are earning.
Key KPIs: Turnaround Time, Lapse Rate, and Denial Percentage
In the current world of highly regulated and financially complicated healthcare, organisations need to go beyond performing credentialing chores to manage credentialing performance to achieve the best outcomes strategically. Key performance indicators (KPIs) of credentialing are the cornerstone of this undertaking, which further quantifies its feedback that directly correlates the credentialing activities to financial performance. However, healthcare leaders are usually overwhelmed with information and metrics, and it is essential to zoom in on the most effective and influential KPIs that can result in revenue protection and company compliance.
1. Enrollment Turnaround Time (ETT)
Enrollment Turnaround Time is the number of calendar days starting with the date that a provider submitted its credentialing application to the day that the provider is actively enrolled and payer-approved.
Significance:
Enrollment turnaround is a vital gateway indicator because any delay postpones the provider’s capacity to claim billable claims. Long turnaround times are translated into lost revenue, slow access to patients, and inefficiencies. This has a theatrical effect on high-volume or specialty providers whose daily billings attract large revenue streams.
Impact Analysis:
Using the same illustration, when the enrollment cycle schedule of an orthopaedic surgeon goes beyond the anticipated 60 days to 90 days and the surgeon bills on average $3,000 per day, then the organisation is facing a $90,000 loss in prospective earnings during the span of that lag.
Industry Benchmark Targets:
- Commercial payers: 30-60 days
- Medicare and Medicaid: 60-90 days
2. Credentialing Lapse Rate
Credentialing Lapse Rate is a number that represents the percentage of providers whose credentials, certifications, or payer contracts lapse significantly without successful, timely recredentialing. The lapses in credentialing start claims being rejected immediately, and it may require redoing the whole process of enrolment with the payer, bringing along months of inactivity. This disrupts the billing of the providers and risks non-compliance with the requirements of both payers and regulators.
Financial Consequences:
In an organisation where 5 per cent of the lapse rate occurs in a provider network of great size, 30 days of revenue loss occur in those affected providers for each lapse. That impact may be significant cumulatively, especially in multi-speciality practices or health systems.
Best Practice Benchmarks:
- Target lapse rate 0 per cent
- Warning threshold: A value above 1% is an indication that there are issues that need to be repaired in the processes.
3. Denial Rate Credentialing Errors
This quality metric measures the percentage of claims rejected outright as a direct result of being related to credentialing concerns, either by a provider failing to be credentialed at all or correctly connected to the system of the payer. Credentialing denials are largely avoidable but cost twice as much as the initial cost of lost claims, including the resources of labour-intensive reworks and appeals. Continuous credentialing mistakes are significant to the provider-payer partnerships because they bring administrative overhead that is costly.
Example:
At a given 2 per cent denial rate, which is associated with a credentialing problem, involving a monthly claims volume of $1 million, there will be a loss of $20,000, as well as the reprocessing costs.
Industry Standard Targets:
- Qualifying
- Denial rate: 0-1
4. Recredentialing Rate
Recredentialing Rate is the measure of the proportion of providers who were recredentialed without failure before their current credentials expiration, as required by payers who usually require re-credentialing every two or three years for provider benefit. Re-credentialing failure may also lead to instant removal of a provider and subsequent payer panels, delays in revenues, and a complicated reinstatement process or re-enrollment is required.
Example:
By keeping the recredentialing success rate at 95%, the organisation leaves only 5 per cent of providers whose deadlines could not be met, and those few are already enough to lose hundreds of thousands of dollars annually in sales.
Benchmark:
- Target rate of recredentialing: 100 percent compliance.
5. First-Pass Approval Rate
This is the percentage of credentialing applications in which decisions are reached on the first application without subsequent requests to re-supply supporting documentation or correct deficiencies. This is characterised by high first-pass approval rates in which application quality control and elaborate document management systems are highly developed. Oversimplified rates reveal the issues with application completeness or accuracy that lead to delays and raise administrative loads.
Recommended Target:
- Maintain a first-pass approval percentage of 90 per cent and above to see to it that those operations are efficient and processing produces minimal delays.
How to Track Credentialing KPIs
Successful monitoring of credentialing KPIs is more than merely gathering the information; it demands accuracy, promptness, and the transformation of insights into corrective measures. To monitor your KPIs effectively:
1. Automate the collection of data:
Take advantage of credentialing management software that automatically closes applications, records document expiration dates, recredentialing schedules, and claim denials that are based on credentialing inaccuracy. Automation reduces human error and enhances the level of accuracy of data.
2. Define Shared Ownership:
Assign someone the dedicated role of credentialing specialists, compliance officers, or revenue cycle managers to be on the lookout for KPI trends and responsible for initiating the remediation process when the KPIs are performing below the target range.
3. Establish Benchmarks and Alerts:
Establish the target levels of KPIs depending upon the industry standards and organisational objectives. To allow making interventions beforehand, set up automatic notifications when approaching recredentialing compliance deadlines, extended turnaround times, or when increasing denial rates take place.
4. Periodic Audits and Data Check:
Run periodic checks of data integrity and accuracy in the reporting of the KPIs. Errors, or information that may be old, can be misleading in decision-making and conceal possible risks.
5. The regular frequency of reporting:
Put in place a regular schedule of KPI reporting; weekly on operating measures such as turnaround times, monthly on rejection and lapse rates, and quarterly on strategic reviews to inform all stakeholders and be accountable for all Key data.
Dashboards & Tools for Credentialing KPI Management
Technology solutions underlying the work of modern credentialing teams should allow real-time monitoring and workflows:
Credentialing Management Software:
These portals concentrate the information about the providers, digitise the document exchange, notify about the expirations, and monitor both the application statuses. Examples are built in dashboards that display enrollment position, recredentialing status, and denial patterns.
Interactive dashboards:
KPIs are presented using charts, alerts, and drilling details in dashboards. They help credentialing teams to keep track of:
- Degree of completion of the provider document status and verification
- Average and outliers of enrollment turnaround
- Credential expiration dates and the date of recredentialing deadlines
- Rejections associated with credentialing problems, such as the classification of the root cause
Provider Personal Data & Certification Dashboards
These exceptional views assist in monitoring and checking specific provider licences, accreditation, and conformance with CME requirements, and ensure that credits are current and valid.
Mobile Access:
More and more, mobile-friendly dashboards and even credentialing apps put providers and credentialing staff in control of updating their records, uploading documents, and monitoring their statuses wherever they may be, allowing them to respond faster and cutting down on delays.
Business Intelligence (BI) Tools:
In the case of large healthcare organisations, BI tools can integrate credentialing data against other revenue cycle KPIs, giving comprehensive financial and operational health.
Organisations’ paramount tools allow performing actionable intelligence, dramatic manual error reduction, and flexibility in adjusting to compliance conditions.
Linking Credentialing KPIs to Revenue Protection
KPIs of credentialing are not mere operational control points: they directly affect revenues and financial well-being.
- Faster Turnaround Time: Accelerated provider enrollment leads to earlier revenue collection by medical billing as early as possible, leading to less leakage of revenue due to late claim submissions.
- Reduced Lapse Rate: Proper recredentialing ensures that claims are not rejected based on expired credentials, and thus, there is a consistent revenue stream.
- Reduced Denials of Credentialing-Related: Denials are minimised by a strict credentialing procedure and high-quality KPI management. This reduces the administration time and avoids the lost reimbursement, which are both essential to maintain a good cash flow.
The costs are affected by the first-pass approval rate:
Fewer re-submissions and rework costs due to high first-pass approval make the credentialing process more productive and reduce costs.
Evidence-Based Allocation of Resources:
The information within KPIs helps in decision-making on staffing, technology, and process upgrades- leveraging the most return on credentialing measures.
Conclusion
Credentialing KPIs are vital indicators that have a direct influence on healthcare revenue and compliance. Organisations can optimise credentialing processes, minimise risk of revenue leakage, and preserve good payer relations by emphasising such metrics as turnaround time, lapse rate, and denial percentage, and utilising dashboards and automated monitoring tools. This monitoring and reporting enable the healthcare leaders to make subject-oriented choices based on data to safeguard each dollar made and streamline the availability of patient care. Credentialing performance is a worthwhile investment to create financial stability and sustainability of any healthcare organisation.
FAQ - People Also Asks
How often to report?
Credentialing KPIs should be reported weekly for operational issues and monthly or quarterly for strategic review. This ensures timely action and informed decision-making to protect revenue.