It's not an uncommon scenario: A physician joins your practice, either out of residency or from another practice. You deal with several managed care organizations (MCOs), so the physician needs credentials.

It's a time-consuming process. You must first collect the required documentation — from current hospital privileges to a valid state license to confirmation of medical malpractice insurance. Then you must wait 30 days to a year for the MCOs to verify the documentation before the physician can be added to their panels. In the meantime, the new physician may not be allowed to treat, or at least may not be reimbursed for treating, your managed care patients. This limits the new physician's ability to generate revenue for your practice.

Why does it take so long? How can you reduce the delay? What can you do in the meantime? Here are some suggestions to help you and your practice.

Why does it take so long?

There are at least two reasons for the delay — poor planning on the part of physicians and practices and the MCOs' desire to meet National Committee for Quality Assurance (NCQA) standards.

Poor planning. Many times, new physicians don't apply for credentials until they arrive in town to practice, even though they could have started the application weeks earlier. And the delay may be compounded, since responses from references can take additional weeks or even months to arrive. Until all required references arrive at an MCO, an application is not considered complete — and until it's complete, the credentialing process is stalled.

NCQA standard. The NCQA “Initial Primary Source Verification” standard stipulates that an MCO verify several points, such as records of professional liability settlements, before assigning credentials. An MCO eager to meet this requirement may withhold credentials from a newly hired physician until the last detail is verified. (See “NCQA requirements.”)

How can we reduce the delay?

There are a few strategies, but the key strategy can be summed up in two words:

Apply early. Newly signed physicians should apply for their MCO credentials as early as possible. In fact, it's a good idea to encourage even a newly signed resident to fill out parts of the application and collect whatever parts of the needed documentation he or she can before completing residency. To facilitate this early preparation, you may want to provide a new physician with a checklist of information and documents needed for credentialing.

Provide help. Designate one staff person in your practice to take care of all of your MCO, hospital and Drug Enforcement Administration renewals and applications. Having one person in charge of all applications achieves a certain efficiency. This person should be responsible for filling out the paperwork for new physicians and those already affiliated with the practice, assuring physician compliance and submitting applications.

Negotiate away some delays. You may be able to negotiate with some of the other players in the process. For example, try working directly with the licensing board to expedite new licenses. If you have a management services organization (MSO) or similar organization, see if you can convince your MCOs to delegate credentialing to the MSO and pay the MSO for the service. Since the MSO does one-time credentialing at a central data warehouse, it eliminates duplicative costs and delays. Also, the MSO may be able to handle credentialing electronically and thus avoid the delays associated with “snail mail.”

If the MSO does take on credentialing, be aware that maintaining credentialing can be a daunting task. The process requires staff attention, oversight and fairly complex management. Many IPAs have taken on this task only to have it taken away when they could not meet MCO audit standards. It's a good strategy; just don't underestimate its difficulty.

Hire within your state. State licensing of physicians trained out of state can take longer than for physicians trained in your state.

What can we do in the meantime?

Bill under another physician's name. If you choose this route, make sure the MCO does not object to this approach. Do not use this strategy with Medicare or Medicaid patients, as these agencies are likely to view this method as fraud.

Temporarily reassign patients. Work out an agreement in writing with the MCO whereby patients are temporarily assigned to one of your credentialed physicians. Be clear that the patient, MCO and physician understand that the patient will be added to the new physician's panel once the new physician gains credentials. In the interim, the new physician provides treatment, and the financial arrangements are worked out within the practice.

Use retroactive reimbursement. Some MCOs will allow the practice to hold reimbursement claims until the new physician is credentialed by the MCO.

Ask for temporary privileges. These can be based on an initial review of the physician's credentials and the knowledge that the physician has obtained hospital privileges. Unfortunately, such provisional credentialing is seldom used by MCOs because the NCQA frowns on it. Still, it never hurts to ask the MCO if this is a possibility. Note that this strategy may work better when dealing with commercially insured patients, since such a technique can run afoul of the rules for those insured by state and federal governments (e.g., Medicaid and Medicare patients).

There is probably no way to completely circumvent the problems associated with credentialing new physicians. However, there are ways to mitigate those problems to the benefit of both your practice and the new physician.