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3 Reasons Why Physician Credentialing Red Tape Hits Rural PA Especially Hard

October 16, 2019 | By: Renato J. Suntay, Chief Financial Officer, Meadville Medical Center

As chief financial officer, I am responsible for the financial sustainability of Meadville Medical Center, a medium-sized hospital in rural Crawford County, Pennsylvania.

With a total margin of negative 2 percent during 2018, we work hard to keep our doors open. The communities we serve count on us.

When Meadville’s lone specialist in, for example, nephrology, resigns or retires unexpectedly, seriously ill patients may find that—until we can bring a new doctor on board—their nearest option is hours away.

This fact of rural health care cries out for several important policy changes, including the expansion of broadband and the requirement that insurers reimburse for telemedicine. Right now, I’d like to talk about the frustrating process of getting physicians credentialed by the insurance companies we work with.

Insurers’ credentialing red tape can keep patients waiting for appointments while newly hired doctors, who are fully licensed, wait for a credentialing stamp of approval.

The credentialing process typically takes six months or more and involves faxing hundreds of pages, sending repeated emails, and making repeated phone calls. The staff person who manages this process at Meadville must go through this time-consuming process with each of the nearly 60 health plans that provide coverage for Meadville’s patients.

The process adds delays and administrative costs that are especially damaging to rural patients and hospitals.

When you’re the only provider, waiting for credentialing can mean delaying access to care that’s needed now

Rural Pennsylvania has a well-documented shortage of physicians. Our rural counties have only 60 primary care physicians (PCP) per 100,000 residents, compared to an average of 75 PCPs nationwide.1

Rural Pennsylvanians also tend to be older, and to need more health care. Long wait times and long travel times are especially difficult for frail older adults with several chronic conditions.

Infographic showing multiple health plan credentialing criterianCredentialing delays exacerbate physician recruiting challenges

In rural communities like Meadville’s, hiring new doctors can feel both really important and really difficult. We offer higher salaries to staff crucial services such as obstetrics, various types of surgery, cardiology, neurology, nephrology, urology, and pain management.

Once we hire a physician, credentialing delays put us between a rock and hard place. If newly hired doctors start caring for patients before they are credentialed, Meadville may never be paid for those services. 

Until doctors are credentialed, any claims for the services they provide go unpaid—virtually ignored—by insurers. These are the rules of the road.

Hospitals can seek payment, often unsuccessfully, only after the doctor is credentialed. Some insurers simply do not process such retrospective reimbursements.

With margins this thin, the hidden costs of credentialing really hurt

Patients have suffered as more than 100 rural hospitals across the U.S have close since 2010.2  According to the Pennsylvania Department of Health, three of those closures were in Pennsylvania. One in three rural hospitals in our state is running negative total margins.

The allocation of scarce resources to manage credentialing paperwork undercuts rural patients’ access to care. That seems unnecessary—and especially detrimental when a practical solution, using the basics of modern technology, is at hand.

A solution is waiting in the Pennsylvania legislature

Think of it as a credentialing “common app.” Self-employed doctors as well as hospitals and others who employ physicians would enter credentialing information on one application used by all insurers. Imagine the paperwork we could eliminate!

In fact, just such an application is already available, from the Council for Affordable Quality Healthcare, or CAQH. What’s more, nearly 75 percent of Pennsylvania’s physicians are already registered with CAQH.3

Best of all: legislation to require insurers to use the application awaits action in the Pennsylvania House. House Bill 533 would require health insurers to standardize the credentialing application and issue a determination within 45 days of receiving a completed application. The bill would allow for administrative penalties for insurers if they fail to use the designated applications or to complete the credentialing process as required.

Health care advocacy groups, including the Pennsylvania Academy of Family Physicians, the Pennsylvania Medical Society, the Pennsylvania Association of Community Health Centers, the Pennsylvania Osteopathic Medical Association, and the Coalition of Nurse Practitioners, also support the bill.

A study published a few years ago in the New England Journal of Medicine estimated that a unified credentialing system could save $1.8 billion annually.4

This is one health care problem we can pretty easily solve. Please give Meadville Medical Center the chance to put its share of the savings to work on behalf of its patients.

NOTE: Citations and links in this document are current as of September 19, 2019
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1 Pennsylvania Health Care Workforce Needs.” Joint State Government Commission, General Assembly of the Commonwealth of Pennsylvania. Staff Study. Published 4/2019. 
2 155 Rural Hospital Closures: January 2005–Present. The Cecil G. Sheps Center for Health Services Research, University of North Carolina.
According to a September 2019 analysis of data from the Kaiser Family Foundation and CAQH.
4 Wikler E, Bausch P, Cutler DM. Reducing Administrative Costs and Improving the Health Care System.” New England Journal of Medicine 367, no. 20. 11/15/2012.




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