Credentialing - Implement these 5 Best Practices to Avoid Revenue Disruption

By: Mary Reichert, CPA and
Susan Prior, CHC 

Payment reform initiatives such as bundled payments, accountable care organizations, and patient-centered care coordination are leading to an increase in hospital and physician practice affiliations, consolidations, and other new types of contractual arrangements. Such initiatives can disrupt the revenue cycle and put cash flow at risk because of the work and time involved with physician credentialing, payer enrollment and revalidation of information with government payers. 


Disruption of the revenue cycle can be avoided with proper management and oversight of the credentialing process. Consider implementing these five best practices:

  • Ensure Medicare revalidation is complete
  • Select proper taxonomy code for provider specialty
  • Check payer policies regarding how mid-level providers are credentialed and reimbursed
  • Monitor payer enrollment policies for updates and changes
  • Refer to Office of Inspector General ("OIG") exclusion and sanction databases monthly

This article highlights five best practices to improve revenue cycle compliance, avoid federal penalties, and revenue disruption for services provided. 


Credentialing problems do not just hit the bottom line by disrupting the billing process, they can also affect patient care by impacting authorizations and referrals. Organizations need to make sure their revenue cycle compliance plan includes the critical components of the credentialing process. Regularly monitoring the credentialing process will help avoid disruption in billing not only during regular business operations but also during a practice affiliation or merger transition. 


The credentialing process is all about verifying the qualifications, background, and legitimacy of the credentials and training of physicians and other practitioners. Hospitals and health plans consider physician credentialing the process of validating that a physician is qualified and competent to provide quality health care services and receive reimbursement for services rendered. 


Some of the key oversight areas include verifying providers are cleared from exclusions and sanctions, updating Medicare revalidation, following taxonomy code guidance and payer policies for mid-level providers, and enrolling in all payer contracts. We provide a description of these five areas and the best practices to improve oversight and avoid revenue disruption. 


1.  Ensure Medicare revalidation is complete

The Medicare revalidation effort is designed to prevent fraud in the Medicare system by re-enrolling all 1.4 million physicians, non-physicians, and other health care professionals. This effort, in response to provisions in the Affordable Care Act ("ACA"), requires enhanced screening for all providers enrolled in the Medicare program prior to March 24, 2011. The initial revalidation of providers must be completed by March 2015. 


When physicians receive the Medicare revalidation letter, the physician has 60 days to complete the revalidation application. Failure to submit the completed application can result in Medicare billing privileges becoming deactivated and no payments received at any and all practices listed for that provider with Medicare.


We have encountered some common challenges such as a Medicare revalidation notice including a provider with up to six (6) PTAN's (Medicare ID numbers) and Medicare requires that each of the 6 PTAN's be resolved by either verifying or terminating. Complications occur when providers do not recall which practices each PTAN is attached to, the provider or the office staff do not respond to the inquiries for information to resolve the multiple PTAN's, or the revalidation notice is sent to an outdated address. 

BEST PRACTICES INCLUDE ensuring that all Medicare providers have completed the revalidation processes and are monitoring changes in the denial patterns. The office should maintain the National Provider Identifier ("NPI") user name and password so the credentialing specialist can access the Medicare online system, the National Plan and Provider Enumeration System ("NPPES"), to manage the revalidation process. Finally, incorporate a process to deactivate the Medicare PTAN when a provider
leaves a practice.

2.  Select proper taxonomy code for provider specialty


The healthcare provider taxonomy codes categorize and classify health care providers to enable them to receive Medicare and Medicaid reimbursement. When a provider is applying for a National Provider Identifier ("NPI"), the provider must select a taxonomy code that properly describes the provider's type, classification and specialization by using the Medicare guidelines. This list can be found at Be certain that providers with dual board certifications have included multiple taxonomy codes as appropriate. 


If an authorization request or a claim for a service rendered by a provider is submitted and the specialty and taxonomy code does not match what is in the payer's system they will deny reimbursement. This will have a direct impact on the revenue cycle and on the patient experience. Additionally, problems can occur with a provider or group if the taxonomy code selected during the application for an NPI does not match what is loaded into third party payer systems.


Understanding nuances with definitions of taxonomy codes is critical. For example, in Connecticut, the Medicaid Agency has a "taxonomy crosswalk" for some specialties because their Medicaid taxonomy codes differ from Medicare's codes. This difference in the Medicaid taxonomy code resulted in $1.2 million in rejected claims for a client for Medicaid due to the incorrect taxonomy code being billed. Many worker's compensation plans also have nuances in their definitions.

BEST PRACTICES INCLUDE confirming the proper taxonomy codes have been loaded into internal systems when new providers are employed, or receive an additional board certification. Regularly check the NPI registry to review that the information is accurate, especially if the practice has recently undergone a merger, a new payer contract or implemented a new billing system.

3.  Check payer policies for how mid-level providers are reimbursed


Ensuring mid-level providers are accurately credentialed for each payer contract can be challenging. As payers change policies, states change scope of practice laws, and health plans change benefit designs, mid-level provider credentialing needs may change. The practice or hospital should make sure each payer's policies are reviewed at least annually. Each payer may define their own requirements related to which mid-level providers are enrolled and how mid-level providers should bill and get reimbursed.


For example, in Connecticut, Advanced Practice Registered Nurses ("APRN's") scope of practice has changed in regards to the Collaborating Agreement between the APRN and the physician at the State level. A misperception we encounter is the office staff and the APRN's assume that they no longer need a Collaborative Agreement due to the legislative change. Unfortunately, the payers have not caught up with this policy change, and there are additional criteria that must be met. We have been educating providers and office staff in Connecticut on the requirements that do continue to exist, and they include:

  • Effective July 1, 2014, APRNs may work without a written collaborative agreement providing the APRN had a Collaborate Agreement for three years and 2,000 practice hours (refer to the State of Connecticut website for APRN's scope of practice at
  • If the APRN chooses to work without a written Collaborative Agreement, they must file that intention with the Department of Public Health

In addition, many insurance carriers in offering coverage in Connecticut have not updated their policies to reflect this change, therefore, there could be a chance that the APRN will not be enrolled as participating without the agreement in place.

BEST PRACTICES INCLUDE regularly reviewing payer policies for any changes in the definitions of mid-level provider reimbursement. Also, do not assume that the multiple health plans that a single carrier may offer (for instance, the health plan on the exchange for individuals versus the small business plan they offer) have the same mid-level provider requirements.

4.  Monitor payer enrollment for updates and changes


Payer enrollment and re-enrollment may be the single most important and obvious function of the revenue cycle; however, often it is over-looked. Payer enrollment must be monitored especially during a relocation, merger, acquisition, or employing of additional providers. The enrollment process is the actual linking of a credentialed provider to a particular payer and the group tax and group NPI numbers. This enables the provider to see, refer, prescribe, and bill for patient services that are members of that payer panel. 


Each payer has different re-enrollment requirements as well - Medicare is every five years, Medicaid is every three years, and typically commercial carriers are every two to three years. Many commercial carriers also will look to The Council for Affordable Quality Healthcare, Inc. ("CAQH") database for information, so be sure it is updated every one hundred twenty
(120) days.

BEST PRACTICES INCLUDE developing a monitoring process for all payers the hospital or practice participates with to ensure accurate information has been submitted and re-enrollment occurs timely. Make sure there is an understanding of each of the contracted payer's requirements regarding enrollment and re-enrollment. Confirm that the email address on record with each payer for each provider is current. 
Many revalidations do not occur because they are emailed to an address that is no longer valid.

5.  Refer to Office of Inspector General ("OIG") exclusion and sanction databases regularly


Exclusion from federal health care programs results in no federal payment being made for any items or services.[1] In fact, claims submitted by an excluded person violates the Civil Monetary Penalties Law and may result in fines. The OIG maintains a database, List of Excluded Individuals and Entities ("LEIE") that providers are able to use and check prior to employing or contracting with persons. This database should be checked monthly on already employed or contracted providers to ensure avoidance of potential Civil Monetary Penalty ("CMP") liability as well. Also, providers should consider screening contractors, subcontractors, and employees of contractors to ensure no persons have exclusions.


The National Practitioner Data Bank ("NPDB") contains additional information about sanctions placed on providers. The NPDB collects and discloses information related to medical malpractice payments, adverse licensing actions, adverse privileging actions, negative actions taken by peer review organizations, criminal convictions, and other adjudicated actions or decisions.[2]


When a provider has been excluded or has a sanction pending, the commercial carriers will send notification describing the issue and the requirements to preserve continued participation. Re-instatement for participation with the carrier can take months if the provider has not provided the requested information. The re-instatement process can be costly on many levels - lost patient revenue, additional cost for services to re-enroll, and impact patient care. 

BEST PRACTICES INCLUDE having a monthly compliance review of the LEIE database and a quarterly review for the NPDB database to identify potential concerns about a provider or contractor. When new providers join the practice or hospital, require a thorough review prior to employment.


Even the best revenue cycle management program can fall apart if provider credentialing information is not correct. To ensure a compliant and well-managed revenue cycle, focus on these best practices related to the oversight of the credentialing process. 


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[1] In 1977, in the Medicare-Medicaid Anti-Fraud and Abuse Amendments, Public Law 95-142 (now codified at section 1128 of the Act), Congress first mandated the exclusion of physicians and other practitioners convicted of program-related crimes from participation in Medicare and Medicaid. This was followed in 1981 with the enactment of the Civil Monetary Penalties Law (CMPL). The CMPL authorizes the U.S. Department of Health and Human Services and the Office of Inspector General to impose Civil Monetary Penalties, assessments, and program exclusions. (reference OIG special bulletin)


[2] U.S. Health and Human Services, Office of Inspector General "Updated Special Advisory Bulletin on the Effect of Exclusion from Participation in Federal Health Care Program", issued May 8, 2013.

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