Credentialing, a common health care industry process for collecting and verifying practitioner qualifications and practice history, can be costly and time-consuming. Health insurance companies, hospitals and other health care organizations verify physicians' credentials before physicians can treat and receive payment for services provided to patients. A standardized electronic data collection tool would optimize credentialing-related clerical work for physicians and their staff, and data collection and processing for hospitals, insurance companies and other entities, while lowering administrative costs.
The Current Environment
Except for minor differences, the information required by health insurance companies, Medicare, Medicaid and hospitals from physicians and other health care providers to complete the credentialing process is essentially the same. However, health care providers must complete each process separately.
The clerical work involved in the credentialing and recredentialing processes is time consuming and adds to administrative costs. The risk of errors is increased, and the time spent correcting such errors represents additional administrative costs.
According to industry data, a typical 10-physician practice conservatively spends more than $7,600 in staff time, or $45 per application, every year on the submission of credentialing applications. The average amount of time spent annually per application is more than 11 minutes for physicians and nearly 70 minutes for support staff.
Opportunities
CAQH Universal Provider Datasource™ (UPD), launched in 2002, allows registered physicians and other health professionals in all 50 states and the District of Columbia to electronically enter their credentialing information into a single, uniform online system that meets the credentialing data requirements of health plans, hospitals and other healthcare organizations. This free electronic solution optimizes the credentialing process for providers. Several states mandate the use of a uniform credentialing form, and some actively promote the CAQH UPD credentialing process.
More than 735,000 providers are registered to use the UPD service to share their credentialing information electronically with more than 500 health plans, networks and other organizations across the country. Based on figures from a September 2004 MGMA cost analysis report, this has resulted in savings of more than $92 million per year or more than 3.2 million hours (or the equivalent of 1,500 full-time employees) of provider and support staff time.
More than 8,000 new providers sign up to use the UPD service each month. CAQH estimates that as more organizations replace the use of paper applications with UPD, the savings will continue to increase with a potential to eliminate an additional $150 million to $200 million is unnecessary administrative costs if everyone participated.
HASC Recommendations*
- Full participation in the CAQH Universal Provider Datasource (UPD) and use of the UPD tool as the primary practitioner data collection tool for all health plans and hospitals that require contracted providers to be credentialed.
- Development of an electronic data interchange by the Centers for Medicare & Medicaid Services (CMS) for the communication of provider credentialing information that will allow for sending data from the Universal Provider Datasource™ (UPD) to the web-based Medicare Provider Enrollment and Chain/Ownership System (PECOS) database.
- Education of employer organizations to heighten the awareness of cost saving opportunities associated with the use of UPD, and support for the inclusion of UPD in their requests for proposal to health benefits organizations.
- Support for the review and use of UPD by State Medicaid agencies for provider data collection and maintenance requirements.
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*An assessment of state laws and accrediting entities (e.g., National Committee for Quality Assurance [NCQA], Utilization Review Accreditation Commission [URAC]) impact on credentialing requirements will be performed to assist in the development of state- or accreditation-specific strategies.
