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Hospitals strive to place two goals at the forefront of their day-to-day operations: patient safety and continual improvement of the quality of care that the facility provides for its patients. These goals are often diametrically opposed to another key item on the agenda, which is to reduce overall operational costs on an annual basis. Thus, increasing patient safety and care can only be successfully achieved by overcoming two large hurdles: the ever-expanding definition of healthcare, and the number of satellite facilities that healthcare providers are now being tasked with overseeing. One significant area in which hospitals can reduce cost is by outsourcing medical credentialing.

The cost of medical credentialing internally

Medical credentialing is a complex process that requires cross-coordination from a number of disparate departments, including a compliance office, the hospital’s human resources department, and various medical staffing services.

In surveys of major metropolitan hospitals, the responsibility for credentialing is spread across various departments:

  • The Compliance Office ensures that all staff are credentialed and maintained for HIPAA.
  • Medical Staffing Services deals with the credentialing and privileging of the licensed medical staff.
  • Human Resources verifies criminal background checks and educational credentials.
  • Occupational Health ensures that healthcare providers are credentialed for the physical demands required for patient care.

When the hours for medical credentialing between all of these staff members are added together, the estimated staffing cost for credentialing is $6020 per bed annually. That easily adds up to more than $1M per year for a major hospital with an average of 161 beds.

Naturally, the cost of not credentialing cannot be considered, as credentialing insulates the hospital and staff from litigation and ensures patient safety. It’s also a requirement for reimbursement from payers like Medicare, Medicaid, and private insurance companies. By outsourcing your medical credentialing instead of keeping the entire process in-house, an outside organization will be responsible for verifying all of this information, which frees up your staff to focus on other tasks.

Outsourcing medical credentialing reduces its cost significantly

In the simplest possible terms, outsourcing your medical credentialing means that you hire an outside credentials verification organization, or CVO, to verify the credentials of every healthcare provider at the facility. With primary source verification, details are confirmed like the provider’s stated educational institution, contacting former employers about the provider in question, and making sure that the provider’s licensure is currently up to date.

What are the costs of not outsourcing medical credentialing?

Because of the costs associated with undertaking a correctly implemented credentialing process, some hospitals and healthcare providers choose to either minimize their credentialing efforts or forego them. While this will save them money in the short term, over a longer period of time, the costs of not credentialing can quickly be devastating.

It has been estimated that the cost of not credentialing healthcare providers can exceed $36,000 per bed, when theft, adverse events, litigation, and hospital-acquired infections are factored in. This balloons the cost of not credentialing to around $5.8 million dollars for an average-sized hospital. In addition, there can be other indirect costs, such as malpractice insurance and its associated fiscal penalties.

Hospitals are faced with shrinking budgets, staff limitations and credentialing volume that far exceeds a staff’s capacity to process it in a compliant manner. These challenges can lead to mistakes that delay credentialing, negatively impact patient care, and delay reimbursements. Outsourcing medical credentialing relieves backlogs and can speed up the credentialing process. Outsourcing credentialing to a reliable and proven Credentials Verification Organization (CVO) like Advantum Health’s subsidiary MedAdvantage reduces administrative burden and allows staff to focus on other high-value tasks.