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Credentialing backlog sets compliance traps for the unwary

In order to bill for the healthcare services they provide, physicians, dentists, counselors and others must be credentialed by their respective payors. Unfortunately, a growing backlog for government and private payors to verify documentation, review applications, and make approval decisions for new providers can lead to the temptation to cut corners when submitting claims during the time a new provider’s payor credentialing is pending. 

One area of concern is the potential for a practice to bill for services rendered by the new providers using credentials of an already-credentialed provider in the same practice. Staff may see this as an easy way to avoid holding claims, but it comes with tremendous risk. Depending on how the claim is billed, it likely results in inaccurate claims being submitted. Medicaid and other government payors typically view such claims as fraudulent under the False Claims Act and other civil, and even criminal, laws. 

How can a practice bill for a new provider’s services after a credentialing application is submitted but before it has been approved? There is risk when a practice bills for services rendered during that period because the application could ultimately be denied. Any claims submitted by the still-un-credentialed provider may either be denied or, if already paid, may lead to overpayments. For claims submitted to government payors, there is the added risk of potential administrative, civil, and criminal liability. 

Some practices opt to hold claims for services rendered by new providers. Then, once credentials are approved and retroactively applied, the practice submits all claims for services provided during the gap period. This can delay payment, especially for payors with lagging credentialing processes, but it is often the safest way to bill for new providers.

Regardless of how a practice decides to handle new providers’ claims, it is imperative to understand each payor’s rules and regulations. Medicaid payors have increased their focus in this area. If a practice participates in government healthcare programs, additional attention must be paid to ensure that all claims are accurate and submitted for properly credentialed providers. Buyers considering the purchase of a physician or dental practice would be wise to verify that no claims have been billed for non-enrolled/non-credentialed providers under another provider’s number.  Failure to exercise due care in this area can lead to significant liability.


JD Thomas
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Andrew Solinger
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