Why Credentialing Delays Cost Your Practice More Than You Think? 

Did you know that each month of credentialing delay can cost your practice up to $8,000 in lost revenue? Credentialing delays aren’t just admin issues—they’re financial black holes.

If you’re waiting weeks—or even months—for insurance credentialing approval, you’re not just losing time. You’re losing revenue, new patients, and valuable growth opportunities. Every delayed day in the provider credentialing process can mean unpaid sessions, overworked staff, and a stalled schedule.

Credentialing is a required process outlined by CMS and NCQA that verifies a provider’s qualifications—education, licensure, training, and malpractice history—before they can bill insurance. While it’s critical for compliance and patient safety, delays in credentialing can quietly drain your finances, reduce patient access, and damage your practice’s long-term success.

In this blog, we’ll explore how credentialing delays impact your bottom line, why they happen, and how to streamline your insurance credentialing process to avoid revenue loss and keep your operations running smoothly.

How Credentialing Delays Hurt Therapy Practices

Several studies show that credentialing takes an average of 90 to 120 days, and in some cases, up to 180 days. That is already a long wait before a provider can start patient care and billing insurance. However, if there are delays, errors, or resubmissions, it can be expensive and frustrating. 

Here’s how credentialing delays and their hidden costs can impact your practice’s bottom line and reputation:

Lost Revenue: 

Providers cannot bill insurance or provide patient care without proper credentialing, resulting in direct revenue loss. As a result, some patients have reported losing an average of $6000-$8000 per provider monthly due to credentialing delays.

Increase Administrative Costs: 

Manual tracking, form resubmissions, and constant follow-ups consume your time to a great extent. It also requires hiring extra staff for these tasks, resulting in higher admin costs and a risk of errors due to burnout or stress.

Denied Claims: 

Claims denials often occur due to errors in credentialing data or claims documentation. This is because fixing them requires additional time, staff effort, and resubmission cycles, thus delaying revenue further.

Potential Contract Terminations: 

Inconsistent or inaccurate credentialing submissions may violate payer compliance guidelines, namely those from CMS or NCQA, risking your contracts. These terminations can affect your future ability to serve insured patients.

Reduced Access to Care: 

Delays in bringing providers onboard mean fewer available clinicians for patients, causing long wait times, overcrowding, and backlogs in receiving specialized care.

Unsatisfactory Patient Outcomes: 

Overloaded or short-staffed practices can result in rushed appointments and delayed preventive care, compromising care quality and patient trust.

Patient Frustration and Churn: 

As patients experience delays, cancellations, or inconsistent access to providers, they often look for more responsive alternatives. This can hurt the practice’s reputation and retention to a great extent. 

How Do Credentialing Delays Hurt Long-Term Growth? 

Credentialing delays may seem like short-term administrative hurdles, but their impact goes beyond a few postponed sessions or billing issues. These delays can slowly deteriorate the core foundation of your therapy practice’s sustainability and growth. It can undermine your ability to scale, maintain financial stability, and build a reliable referral network. Also, credentialing delays can significantly hold you and your practice back. 

Here’s how credentialing delays can significantly hurt your practice’s growth in the long term: 

Loss of Reimbursable Revenue: 

For an uncredentialed provider, each week causes a loss of income in thousands, as they cannot bill insurance yet. According to the CMS reimbursement protocols, providers must be fully credentialed and enrolled to submit claims. Credentialing delays can limit cash flow directly, stunting reinvestment and strategic expansion. 

Missed Patient Referrals: 

Payers and referral networks have a rule that providers must be on insurance panels before tending to patients. Without credentialing, they will be deemed invisible to these sources. NCQA standards emphasize timely credentialing to ensure patients have access to in-network care. Failure to meet these expectations can isolate your practice from key referral pipelines. 

Staff Burnout & Inefficiency: 

Due to credentialing delays, the already credentialed therapists deal with caseload burdens, leading to overwork, burnout, and declining morale. This affects both staff retention and care quality. NCQA workforce management guidelines highlight the importance of ensuring all providers are eligible to deliver services efficiently within their scope. 

Damaged Reputation: 

Repeated credentialing issues can damage your practice’s reputation with both payers and patients. Payers might consider you as unreliable, while patients may perceive a lack of professionalism. Over time, this can affect online reviews, patient trust, and community relationships. 

Delayed Return on Hiring Investments: 

Even the new hires who are idle while awaiting credentialing can affect your practice in terms of salary and onboarding time. The longer the delay, the harder it gets to justify hiring new staff to meet the growing demand. This is a clear growth-inhibiting factor in the long run. 

Compliance Risks: 

CMS regulations and other state laws prohibit billing for services rendered by uncredentialed providers. In case your practice unknowingly schedules a session with non-credentialed staff, you may get denied claims, audits, or even fraud investigations. These risks can significantly damage your growth and payer relationships. 

Scaling Becomes Risky: 

If your credentialing process is either slow or disorganized, adding new providers can feel like a repetition of the broken process. This can make growth feel like a burden rather than a strategic win. NCQA’s credentialing system standards highlight the importance of structured, auditable processes to prevent obstacles during scaling. 

Top Reasons for Delays in Credentialing Therapists

Credentialing is a highly detailed and time-sensitive process, and delays are common; however, they are often unavoidable. It is advisable to understand the root causes of these credentialing delays to eliminate them. 

Here are some of the reasons why credentialing delays even occur: 

Manual Processes and Tracking:

Despite the technological advancements, many therapy practices still rely on spreadsheets, calendars, or physical folders to manage credentialing tasks. There is no centralized tracking, which can make it difficult to retain important information, key dates, document submissions, and payer-specific requirements. Lack of automation can also result in missed deadlines or prolonged follow-ups. 

Incomplete or Incorrect Applications: 

Credentialing applications rely on a multitude of information – licenses, education, work history, references, insurance coverage, and more. In this case, even a single mistake or omission can result in immediate rejection or having to resubmit the entire application. This may restart the clock on approval timelines. 

Payer-Specific Variations:

Insurance companies have their own set of processes, timelines, and documentation requirements. What works for one payer might not work for the other payer; therefore, navigating through these inconsistencies without a proper system can lead to delays. 

Delayed Responses from Providers: 

Gathering necessary documents from clinicians, especially busy new hires, can feel daunting. When practices don’t consider credentialing as a high priority and throw it under the bus, even the well-intentioned process can take time. 

Lack of Follow-Up: 

Credentialing requires constant communication with insurance payers, especially when timelines stretch beyond 60-90 days. Practices without a dedicated credentialing team may not have the capacity to follow up regularly, which can prolong approvals. 

No System for Alerts or Reminders: 

Practices often make the mistake of not tracking the expiration dates for licenses, malpractice insurance, or re-credentialing deadlines. This can lead to lapses in credentialing even for the existing providers. CMS and NCQA guidelines often highlight the importance of maintaining current credentials to avoid billing disruptions in eligibility. 

How to Prevent Credentialing Delays with TherapyPM?

To maintain steady revenue flow and support practice growth, therapy practices must focus on proactive, organized, and compliant credentialing processes. Additionally, automating the processes can make the workflow easier and more efficient. Consider using TherapyPM to streamline your credentialing. 

Here’s how you can prevent credentialing delays with TherapyPM: 

Centralize and Automate Your Credentialing Process: 

Manual credentialing can result in missed deadlines and oversight. To avoid this mishap, a centralized platform like TherapyPM can help track credentials, expirations, payer communications, and application statuses in one place. Additionally, automation also reduces errors and ensures every task is checked and verified. 

Use Smart Checklists for Each Payer: 

Every payer has unique application and recredentialing requirements; therefore, TherapyPM allows you to create payer-specific checklists. This helps staff gather exactly what’s required upfront, hence reducing hassles and rework. 

Assign Responsibilities and Set Reminders: 

Credentialing delays often occur when no one owns the process. TherapyPM allows you to assign tasks, such as uploading NPI documentation or verifying licenses, to the eligible team members. The software also sends real-time alerts when credentials are closer to their expiration dates.

Digitize Document Collection from Providers: 

TherapyPM allows you to send secure digital requests to clinicians for licenses, education details, W-9s, and more. It also comes with built-in reminders to ensure they don’t forget. 

Track Recredentialing Cycles:

CMS requires recertification every 3-5 years based on the insurance payers. NCQA standards also consider recredentialing mandatory at least every 36 months. TherapyPM can ensure accuracy by tracking those cycles and sending alerts months in advance, so you never get caught off guard. 

Stay Audit-Ready: 

TherapyPM stores all documentation securely in one place, whether you are reviewed by a payer, CMS, or another body. The software consists of everything you need readily, supporting both compliance and peace of mind. 

TherapyPM is an all-in-one software designed to streamline the daily administrative tasks, such as scheduling, billing, documentation, and so on. The software caters to multidisciplinary therapists – ABA, mental health, physical, speech, occupational, and pediatric. Whether it’s credentialing, RCM, or bookkeeping, TherapyPM is a PMS you can always rely on! 

Conclusion 

Credentialing delays aren’t just administrative inconveniences; rather, they are costly and can affect your revenue, reputation, and growth. Hidden consequences like missed billing opportunities, staff burnout, or lost patient referrals are the silent killers chipping away at your practice’s success. 

But here’s the good news: they are preventable. 

With TherapyPM, you can finally take control of your credentialing process, ranging from automation, real-time tracking, error-free documentation, and seamless payer communication. Our platform helps therapy practices of all sizes and specialties to stay compliant, efficient, and scalable. 

Ready to eliminate the credentialing delays once and for all? Start your 30-day free trial with TherapyPM today! Experience the difference in automating the processes for a smarter, faster, and stress-free credentialing. 

No credit card required. Just clarity, compliance, and control – all in one place!