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3 Common Rehab Therapy Credentialing Mistakes

Common rehab therapy credentialing mistakes can happen whether you're moving your clinic or hiring a new therapist, make sure you avoid them.

Meredith Castin
5 min read
July 18, 2018
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Proper credentialing is a crucial step in running a successful physical therapy clinic. If your clinic and therapists aren’t properly credentialed with insurance providers from the get-go, your bottom line might suffer. And it’s not just new clinics that are susceptible to making credentialing mistakes; in fact, any clinic that has gone through a change in ownership, rapid growth phase, or any other transition might find itself mired in credentialing headaches.

But before we get to the three common mistakes rehab therapy providers make during the credentialing process, let’s step back for a moment and discuss what, exactly, credentialing even is.

What is credentialing?

Credentialing is the process of becoming accepted into an insurance provider’s preferred network. This process is important, as it helps insurance carriers (including Medicare and private payers) determine that you’re qualified to serve on their panels, which, in turn, helps you attract patients to your practice.

While some practice owners choose to provide services solely on a cash-pay basis, the majority of clinicians opt for the security and stability of insurance-based operations. This means that staying on top of credentialing is essential to the health of the practice.

What are some common credentialing pitfalls?

1. Assuming a new hire is already credentialed.

A clinic owner hiring a new graduate probably realizes that the new hire will need to get credentialed with relevant insurance payers upon hire. But sometimes, a clinic will hire a therapist who was previously practicing at another (often larger) clinic or chain. In many cases, such a hire may have been working under the clinic’s existing insurance network group contracts with no problems.

But once that therapist joins your practice, he or she might not be credentialed anymore. If the therapist had been practicing under a group contract—rather than solo—at the last clinic, then the therapist will need to be credentialed with each insurance payer at your practice before he or she can receive reimbursement for treatments provided.

2. Forgetting to update name changes.

If a therapist has been working under one name for a while, but then goes through a marriage or divorce (and a subsequent name change), then you’ll need to update that therapist’s name with every insurance company you work with. If there’s an incorrect name on file, you could find yourself mired in rejected claims.

Similarly, if your practice itself undergoes a name change, merger, or other transition, you must immediately report that change to each and every insurance payer.

3. Failing to update address changes.

If your clinic expands to new locations, these locations must be on file with all of your insurance payers. Also, if your clinic moves, or even starts to bill at a new address (such as a P.O. box), then you must update all of this information must with all of your insurance networks.

Insurance companies keep two types of addresses on file: practice address and payment address. If either or both change, update every one of your insurance providers immediately.

What happens if I make these credentialing mistakes?

The aforementioned mishaps can cause all sorts of fallout. In the least-frustrating situations, your payments may go to the wrong address. In the more headache-inducing scenarios, your claims may process incorrectly (i.e., get billed as out-of-network when you’re actually in-network), or insurance companies (Medicare, especially) may hold your payments until your credentialing information is up to date.

Note: It’s unwise to use out-of-network billing as your back-up or contingency plan. Many insurance companies—including Medicare, Medicaid, and Tricare—will not engage in out-of-network billing.

How can I avoid making these mistakes?

Get started early.

Credentialing can take months, especially with a brand-new grad. While you might not have the luxury of 90-150 days (the typical timeframe for credentialing a new therapist) of lead time when you hire a new therapist, you can certainly look ahead when you sign a new lease or plan to expand. Get the wheels in motion as early as possible to avoid headaches down the line.

Here are some tips to make life easier during the credentialing process, as adapted from this resource:  

  • If you’re planning to work as a solo practitioner indefinitely, set up your own tax ID number. This will make things easier if you move from one clinic to another. However, if you’re ever planning to hire other therapists to work for you, it’s wise to set up as a group practice from the get-go, even if you’re currently treating solo.
  • Get malpractice insurance as soon as possible.
  • Obtain an NPI number. This stands for National Provider Identifier, and you’ll need it for the credentialing process.
  • Ensure you’re licensed (or your treating therapists are licensed) to treat in the state(s) where you intend to practice.
  • Consider using the CAQH ProView™—a universal provider database that eliminates the need to fill out some of the same paperwork over and over.
  • Be prepared to face “closed network” situations. As Dan Walker, PT, DPT, OCS, WebPT Member and owner of San Diego-based Action Physical Therapy, pointed out during a recent interview, some networks simply don’t accept new providers. “It’s important to know what you’re up against when you’re first starting out,” explains Walker. “In Southern California, Anthem Blue Cross has closed its network to new PT businesses since 2010.” Walker does point out that, while these situations can be frustrating, knowing about them ahead of time will help you plan accordingly.

Be consistent.

If your clinic works with multiple office managers (or uses a job-share setup), it can sometimes spell disaster with credentialing. Try to ensure consistency by designating a single person (or well-trained team) to manage all things credentialing.

Some clinics opt to outsource credentialing, but if you keep yours in-house, have an established training manual and system to ensure that your team stays on top of deadlines and expiration dates. Also, your credentialing manager or team make it a point to stay apprised of the most current forms and application processes for each and every insurance payer you work with. (If you’re a WebPT Member, be sure to check out the credentialing services available to you via the WebPT Marketplace.)

While nobody can claim that credentialing is a walk in the park, it’s an essential part of billing insurance companies and receiving accurate payment for your work. Start planning ahead as soon as you decide to build your rehab practice, and ensure that you stay on top of your credentialing. Doing so will help you avoid the three common credentialing mistakes discussed in this article.

Meredith Castin, PT, DPT, is the founder of The Non-Clinical PT, a career development resource designed to help physical, occupational, and speech therapy professionals leverage their degrees in non-clinical ways. Meredith is also the co-founder of NewGradPhysicalTherapy and works as a freelance writer and editor for a variety of publications.


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