One of the most common areas of stress when buying a dental practice is insurance credentialing. As if making one of the biggest purchases you’ll ever make wasn’t stressful enough, throw in all the unknowns about insurance credentialing and stress is a near certainty.
The basic process is pretty straightforward at first glance: have a business entity, apply to be in-network with the companies the seller is in-network with, and get credentialed.
The reality is much more complex.
Here are a few of the basics to help get you started.
You’re Normal, but Start Early!
First, if you have some level of anxiety around insurance credentialing, you’re normal. I don’t think I’ve worked with a buyer yet who has ever said, “Oh yeah, I’m totally on top of credentialing and I have zero questions or issues.” Everyone has some level of stress. But here’s the first thing to remember: everyone makes it through the process and you will too.
The best way I know to alleviate concerns around insurance credentialing is to start the process as soon as is possible. Usually, this will be immediately after you and the seller both sign a letter of intent. Once that LOI is signed you need to start on insurance. Give yourself the maximum amount of time to manage the steps in the process. Yes, it’s in both the insurance company’s and your interests to be credentialed with them, but you will have a much greater sense of urgency than they will.
Can I (the Buyer) Bill Under the Seller’s Information?
Legally, I have no advice to offer here. But I will say that most buyers do bill under the seller’s information in some form or another immediately after purchasing a practice. This is often one of the main reasons a buyer is interested in a seller sticking around for a month or two after closing on the practice.
One insurance expert shared with me that even if a buyer submits a claim form under the seller’s tax ID number, they still need to disclose they are the provider rendering treatment. The ADA claim form has a location for the billing entity (Practice Name, Tax ID Number, NPI2, and Billing Address) and a separate location to disclose the providing doctor (Provider Name, License Number, NPI1). To be reimbursed by insurance networks the “provider”, not “entity” must be credentialed (Medicaid requires both the entity and provider to be credentialed).
Keep in mind the insurance company will issue a 1099 to the entity that submitted claims each year, so the seller has an incentive not to allow a lot of submissions under their number.
Always understand the rules and laws around insurance claim submissions prior to closing on a practice and have a plan of attack mapped out with the seller and front office.
How Long Does Insurance Credentialing Usually Take?
The median amount of time most buyers take to get credentialed with insurance companies is 30-60 days after the application is submitted, but the range of actual answers is huge. The worst companies can take up to 120 days (or in really extreme cases, longer). And Medicaid can be even longer. Have a plan in case this happens and consult with an expert to understand your options.
As a general rule, if you’re an associate in the office already or if you’re already credentialed as an associate with a particular insurance company the total time to get through the process tends to be shorter.
Can the Staff Help Me with Credentialing?
Yes, the staff can often be a big help when dealing with the insurance companies. They’re often talking with them daily. However, there is one potentially huge issue that comes up around the staff. The staff may not know you’re coming.
It’s common for a seller and broker to want to keep the transition a secret from staff before closing. But, insurance companies will call the office with questions related to new providers being credentialed. This presents an obvious problem: how do you start on credentialing if it has to be a secret from the office?
Honestly, this is a tough one. Some sellers will instruct the insurance company to only call them directly and send mail to their home address. My personal preference is to push the seller and broker to bite the bullet and start to let a few, select people know that ownership of the office is changing. It is unreasonable for a seller to expect you to be out of network for months after a transition without some kind of accommodation or plan. Work with your team to come up with a solution as soon as you have an LOI in place.
I Recommend Hiring Help in Many Cases
Beside an accountant and attorney, one additional provider you may want to hire through your transition is an insurance expert. There are a few companies now that specialize in helping through the types of insurance questions and issues buyers have in a transition. They will typically do two things: help through the process and negotiate with the insurance companies. Having professional help through the process can be a huge stress relief and even get you in-network faster than doing it yourself. In my mind, the big value comes in the negotiation portion. If they’re able to secure 5-10% higher reimbursement rates for you on some of the common submission codes, that insurance expert will easily pay for themselves in your first year of ownership.
Let me know if you’d like a referral to a good insurance expert that works with buyers.
The Bottom Line
The bottom line with insurance credentialing when buying a dental practice is that it’s complex, slightly different for everyone, and very important. There are a lot of rules and laws to be aware of and follow. Start early, have a plan in place with the seller, and consider getting some professional help with this area.
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