Learning
Credentialing
Compliance
When I hear the word ‘credentialing’ in the behavioral health space, I see the difference between a thriving network and an organization forced to close its doors.
That might sound a little dramatic, but I’ve handled credentialing in both corporate and non-profit behavioral health settings and I’ve seen firsthand how credentialing is an afterthought until it becomes a five-alarm fire. In the past two decades, I’ve worked on all sides — provider relations, claims, utilization management, and prepping files for the credentials committee. I’ve been the one cleaning up the regulatory mess and trying to create crosswalks and manage member-to-provider ratios after an audit revealed massive gaps.
Credentialing isn’t just about paperwork. It’s impacting your organization’s financial performance, valuation, and scalability. I’ll show you how.
The Hidden Cost of Credentialing Failures
When we talk about credentialing as a ‘hidden cost,’ it’s a straightforward issue of time-to-revenue and lost clinical capacity.
This hidden cost includes:
Lost Revenue: Every day a provider sits waiting for manual credentialing is lost clinical capacity and tens of thousands of dollars in lost billing.
Fines and Recoupments: The unpredictable, massive financial hits from payer audits, recoupment demands, and legal fees due to missed sanctions.
Staff Turnover: High-demand behavioral health providers will leave if they aren’t credentialed in a timely manner and it will cost even more to fill the roles when you’re fighting a poor reputation.
These hidden costs add up in any type of healthcare organization, but especially in the fragmented behavioral health market that is ripe for investment and consolidation. Any sign of credentialing failure can hurt your organization’s valuation because investors don’t know what they’re getting into. When a behavioral health business merges or is acquired, it’s a massive undertaking to credential all the new providers and if your process is already showing cracks, smart investors will stay away.
It’s why digitizing your organization’s credentialing makes sense. You’re eliminating the operational bottlenecks caused by manual or stitched-together processes that keep your revenue engine running.
The Real-World Consequences of a Manual Process
A manual credentialing process can become a ticking time bomb with the highly fragmented and often temporary licenses that are common in behavioral health. This leads to messy credentialing files, which signal a future integration nightmare and a discount on valuation.
Let’s break this down into actual scenarios I’ve seen that clearly highlight how a manual credentialing process can create massive problems
The Provider Sitting Idle
The critical question is this: How long are you paying a highly motivated behavioral health provider before they can actually bill for services?
Imagine you acquire or hire 10 top-tier behavioral health providers each projected to net on average $20,000 a month in billable services once paneled. If your current, manual, paper-intensive process takes 120 days to get them fully credentialed and paneled, and a digital solution could get them activated in a lean 60 days—that’s a 60-day lag. In that two-month gap, you’ve lost $400,000.
That $400,000 is revenue that is not recoverable — it’s the opportunity cost of having highly valuable clinical assets sitting idle due to friction in the credentialing process.
Reduce Claim Denials With Credentialing and Enrollment Improvements
The Expired Provisional License
I was on an audit of a large behavioral health acquisition where the organization missed a critical detail: a highly productive therapist LPCA was practicing on an expired provisional license. Because the manual system relied on a sticky note or a calendar reminder that was never acted upon, the therapist failed to submit their supervisory hours to convert to a full license. Every single claim billed by that provider after the expiration date was technically fraudulent. The resulting payer audit led to $800,000 in recoupment demands and the immediate suspension of that provider, creating a revenue crisis and devastating patient continuity of care.
The Scope-of-Practice Violation (Prescribing)
Another common miss, particularly with advanced practice providers like Psychiatric NPs, is the failure to track their state-specific Collaborative Practice Agreements (CPAs) or supervision waivers. I’ve seen an organization forget to have a supervising physician sign off on specific charts within a certain time frame (according to the state’s rules). When that manual tracking failed, the NP was found to be operating outside their legal scope. This resulted in a board complaint, the NP’s temporary suspension, and a six-figure settlement to prevent a public licensure action. The financial and reputational liability inherited by the buyer was astronomical.
How a Credentialing Platform Controls Hidden Costs
When you’re facing these challenges, healthcare credentialing software really is the best solution. The demands of healthcare credentialing, especially in the behavioral health industry, and the consequences that can come from flawed credentialing really call for a solution that automates processes, checks dates and upcoming expirations for you, keeps documentation tidy for an audit, and generally holds up better to scrutiny than a manual or disjointed system.
In my opinion, there are three non-negotiables that behavioral health organizations need in credentialing software: automation, integration, and continuous compliance. They work together as a unified system — your single source of truth.
1. Automation
Automation cuts down on delays and human error to eliminate the risk of expired provisional licenses and unauthorized practice by proactively checking the status of therapists, counselors, and NPs before they see patients. Look for automated, scheduled, and tracked licence and certification data from all relevant state boards, OIG, SAM, and NPDB automatically imported into software. Automated reminders for expiring licenses is another great protection.
2. Integration
The Council for Affordable Quality Healthcare (CAQH) is the industry’s most trusted provider data source, so a direct integration with your credentialing software is a game changer. You end redundant data entry and prevent costly billing errors and delayed claims because the payer enrollment team is always working with the exact same verified data as the credentialing team. Having a unified system is key, because even a digital process that is disjointed is a risk for having things fall through the cracks between systems.
3. Continuous Compliance
Real-time visibility to provider status changes and expiring licenses delivers a foundation of absolute, reliable compliance. Manually conducting exclusions checks monthly in accordance with NCQA standards isn’t possible for most credentialing teams — you need a solution that takes care of it for you. You can quickly catch sanctions and other issues to prevent thousands of dollars in recoupment down the road.
Start Improving Your Profitability Now
A digitized platform isn’t an expense — it’s a strategic investment that drives faster revenue growth and provides unshakeable protection against risk. If you’re not already digital, you’re currently paying a high, hidden, and frankly, unquantifiable credentialing cost for your manual system. I can tell you firsthand the impact that a credentialing platform has on a behavioral health organization. You have happier providers, credentialing staff, investors, and patients.
By investing in a unified credentialing platform that improves your process and mitigates risk, you pave the way for your business to grow and scale with its true value, increasing valuation and improving care outcomes at the same time. It’s a small step for you, but a giant leap towards a brighter future for your organization.
Learn more about how MedTrainer’s credentialing platform can improve your profitability.