Credentialing Complexities Continue to Challenge Physician Practices

In healthcare administration, few processes are as critical as physician credentialing. The process determines whether physicians can participate in insurance networks and be reimbursed for patient care. When it works smoothly, it operates largely behind the scenes. When it does not, the consequences can ripple across medical practices and patient access alike.

In recent years, new regulatory requirements and evolving payer processes have made credentialing significantly more complicated for provider organizations. According to Stewart Garner, principal in Kassouf's Healthcare Tax and Advisory Group, many of the current administrative pressures stem from the implementation of the 2022 No Surprises Act and the increased emphasis on maintaining accurate provider directories.

The federal law protects people from surprise medical bills, allowing for great transparency in healthcare performed by professionals in and out of network. It also requires physicians to maintain their credentialing status.

Credentialing refers to the process where insurers evaluate physicians' qualifications and verifying items such as medical licenses, work history, malpractice coverage, hospital privileges and prescribing authority. Only after completing this process will insurers allow physicians to bill for services as in-network providers.

"Part of the No Surprises Act, obviously, is meant to help the consumer and the patient, but it creates more paperwork and potential barriers for the providers that can give the services to those patients. As part of this directory maintenance piece, providers can be dropped or placed in an out-of-network status, which essentially means Dr. Jennifer is no longer eligible to be paid by Blue Cross if those directories are not maintained, and maintained timely," Garner said.

This process historically often involved submitting applications directly to insurers through email, fax or mailed paperwork. Today, insurers frequently pull provider information directly from centralized platforms such as CAQH (Council for Affordable Quality Healthcare) and do not rely on traditional paperwork as they previously did. Providers must maintain up-to-date information across multiple systems to ensure credentialing status remains active.

In addition to credentialing new providers joining a practice, groups must also regularly attest that their existing directory information remains accurate. This typically occurs every 90 days and includes confirming office locations, contact information, whether physicians are accepting new patients and other access-related details. Garner said failure to complete this can lead to serious consequences for both providers and their patients.

"If credentialing is not done consistently and within the desired time frame, insurance companies can drop those providers from the network. It will be as if you were never credentialed to begin with. You have to start over, and you don't get paid for those services," Garner said.

For medical practices, that scenario creates immediate reimbursement challenges, he said. Insurers may deny claims or refuse payment until credentialing records are reinstated, even if physicians are actively seeing patients. Garner said these delays can be especially difficult for practices onboarding new physicians. Credentialing applications must be submitted to each insurance company individually, and approval timelines vary widely.

"One of the most common questions we get is, 'If we submit everything today, when will this physician be approved?'. Unfortunately, that's almost impossible to predict because every payer processes applications at a different speed," Garner said.

Some insurers may approve credentialing within a few weeks while others can take several months. In certain cases, insurers grant the requested effective date if paperwork is submitted early enough, Garner said. In other cases, physicians may not be considered in-network until the date the insurer completes its internal review.

While credentialing challenges affect organizations of all sizes, independent practices can often have the greatest struggle, Garner said. Large health systems typically have a dedicated credentialing department, whereas smaller clinics may rely on office managers who already juggle multiple administrative tasks such as billing, payroll and operations.

In some cases, Garner said unresolved credentialing delays can impact patient access. If physicians cannot be reimbursed by certain insurers, practices may be forced to postpone appointments or temporarily stop scheduling patients covered by those plans.

Garner said that credentialing, something that was once straightforward, now requires ongoing oversight and attention to detail. As regulatory expectations and payer systems continue to evolve, practices across Alabama are discovering that credentialing is a critical component of maintaining financial stability and ensuring patients can access care without disruption.