Handling Claims During Pending Contracting and Credentialing Status

Handling claims during pending contracting and credentialing status confuses many healthcare providers. Today, let’s untangle the myths and clarify what happens if you hold claims for patients with insurances you’re not yet credentialed or contracted with. Spoiler: retroactive coverage isn’t always guaranteed.

Key Takeaways:

Most commercial insurers don’t offer retroactive coverage during pending credentialing.
Medicare and Medicaid often allow retroactive claims but vary by state.
Communicating transparently with patients about pending credentialing reduces confusion.
Offering self-pay options upfront can minimize financial risks.
Regular follow-ups with payers can expedite the credentialing process.

The Misconception About Holding Claims During Pending Contracting and Credentialing Status

Many providers assume that if they hold claims for patients while waiting on contracting or credentialing, they’ll get retroactive coverage once they’re officially in-network. But commercial insurance typically doesn’t work this way. Most will only cover services rendered after your effective date as an in-network provider.

Example of How This Works (or Doesn’t Work!)

Imagine you’re treating patients with Blue Cross Blue Shield while waiting for your contract to finalize. If your effective date is May 1st, and you saw patients in February, March, and April but held their claims, guess what? Submitting those claims on May 2nd doesn’t mean they’ll magically process as in-network. In most cases, they’ll either be denied or processed as out-of-network, leaving patients with significant out-of-pocket expenses.

What About Federal Payers?

Here’s where things get a little easier: Federal payers like Medicare typically allow retroactive coverage.

Medicare Retroactive Coverage Example:

Your Medicare effective date is May 1st.
You treated patients with Medicare Part B six months earlier, in November.
Once your credentialing is complete, Medicare will likely retroactively cover those claims as in-network.

Medicaid often works similarly, but the timeline varies depending on your state. Many state Medicaid plans will retroactively cover services up to six months before your effective date. However, always confirm their specific rules with your state Medicaid office.

Managed Medicaid MCO Plans: A Common Pitfall

Managed Medicaid MCO plans, like those offered by UnitedHealthcare or Blue Cross, don’t always follow standard Medicaid guidelines. Often, they operate like commercial insurance plans and won’t retroactively cover claims. This distinction is critical because it catches many providers off guard.

Commercial Insurances: Proceed with Caution

Commercial insurances like Aetna, UnitedHealthcare, Cigna, and Blue Cross Blue Shield generally do not offer retroactive coverage. If you’re treating patients insured under these plans before your effective date, those claims will likely process as out-of-network or get denied altogether if the patient lacks out-of-network benefits.

This is why it’s vital to ask questions during the contracting process. Don’t assume anything. Some smaller or regional payers might offer retro coverage, but you’ll never know unless you ask explicitly.

Best Practices for Handling Pending Credentialing Situations

1. Educate Patients Before the Appointment

During scheduling, your front desk staff should inform patients if you’re still pending credentialing with their insurance. Patients need to understand their options:

They can pay as self-pay patients and receive a discount at the time of service.
You can submit the claim as out-of-network, but they’ll likely have higher out-of-pocket costs.

Having this conversation upfront avoids misunderstandings and reduces potential backlash later.

Streamlining Workflows While Handling Claims During Pending Contracting and Credentialing Status

So, we’ve established that holding claims during pending contracting and credentialing status is not always the best idea—especially with commercial insurances. Now, let’s talk about workflow strategies to minimize disruptions, improve patient communication, and protect your revenue.

Collaborate with Your Team Early On

Before you open your doors or onboard a new provider, it’s critical to have a plan in place. Gather your medical director, billing specialist, and front desk staff to discuss how you’ll handle patients whose insurances are pending.

The conversation should center around these questions:

Will you treat these patients as self-pay until credentialing is finalized?
Will you bill their insurance as out-of-network, knowing they might face higher out-of-pocket costs?
How will you document and communicate their financial responsibilities?

Your team needs to be aligned to avoid confusion down the line—both for your staff and your patients.

Patient Communication is Key

Patients don’t just appreciate transparency—they expect it. If their insurance is pending, they need to understand how that impacts their coverage, costs, and billing.

Here’s how to make this easier:

Create a Cheat Sheet for Your Front Desk Staff
A quick-reference document listing all pending insurances and their status can help your staff communicate clearly with patients. For example:
- “I see you have Aetna. Unfortunately, we’re still in the process of contracting with them, so here are your options…”
Have Patients Sign a Financial Responsibility Agreement
When patients arrive, provide them with a clear document explaining their options.
- Option 1: Pay as self-pay and receive a discount.
- Option 2: Submit the claim to their insurance as out-of-network (with the understanding that this may cost more).
Ask patients to sign this document, acknowledging they understand the potential costs. Store this in their chart to avoid future disputes.

Sample Patient Agreement Text:

“I acknowledge that [Provider Name] is not currently contracted with my insurance company. I understand that claims may be processed as out-of-network or denied, and I accept responsibility for any additional costs this may incur.”

Automating Your Credentialing Timeline

The reality is, credentialing and contracting delays can feel like they’re dragging on forever. Here’s how to keep things moving:

Set Reminders to Check on Status
Make it someone’s responsibility—whether it’s your office manager or billing team—to check on pending contracts regularly. Create a schedule (e.g., every 2 weeks) to call and follow up with insurance companies.
Ask for an Expedite Option
Did you know some insurance companies offer an expedited credentialing process? It’s not always advertised, so you’ll need to ask for it. This can be especially useful for new providers or practices just getting off the ground.

Staff Education: The Foundation of a Smooth Workflow

Let’s be honest: this process puts a lot on your front desk staff. But empowering them with the knowledge they need will pay off in the long run.

Key Areas to Train Your Staff On:

Understanding Credentialing Basics
Make sure they know the difference between in-network, out-of-network, and pending status. They should also be familiar with key terms like effective date and how they impact claims.
How to Verify Patient Benefits
Teach your staff to ask the right questions when verifying benefits. For example:
- “Does the patient’s plan include out-of-network benefits?”
- “What is the patient’s out-of-network deductible and co-insurance?”
Patient Education Tips
Train staff to clearly and confidently explain how pending credentialing impacts the patient’s claim. Most patients appreciate honesty and will trust you more if you’re upfront about potential costs.

Don’t Forget: Documentation is Your Best Friend

Every conversation with an insurance company or patient needs to be documented. This not only protects your practice but also ensures consistency in case of disputes.

Key Details to Log:

Date and time of the conversation
Name of the insurance rep (if applicable)
What was discussed (e.g., retroactive coverage, effective date, etc.)
Next steps agreed upon

If you’re documenting patient discussions, ensure this is noted in their chart. For example:

“Patient was informed that claims will process as out-of-network until credentialing is finalized. Patient acknowledged and signed the financial responsibility agreement.”

FAQ: Handling Claims During Pending Contracting and Credentialing Status

Handling claims during pending contracting and credentialing status can leave providers scratching their heads. Below, we’ve compiled the most frequently asked questions to help clarify this often-confusing topic.

What does “pending contracting and credentialing status” mean?

This refers to the time period when a provider has applied to become in-network with an insurance payer but hasn’t yet received approval. During this time, the provider is considered out-of-network for that insurance.

Can I hold and submit claims after I’m in-network to get retroactive coverage?

Not always. Most commercial insurances (e.g., Blue Cross, Aetna, Cigna, UnitedHealthcare) do not retroactively cover claims submitted before your effective date as an in-network provider. Those claims will likely process as out-of-network or be denied if the patient lacks out-of-network benefits.

Which insurance payers allow retroactive coverage?

Federal payers like Medicare and Medicaid are more likely to allow retroactive coverage:

Medicare: Typically retroactively covers up to 1 year before your effective date.
Medicaid: Coverage varies by state, but many plans allow retroactive coverage for up to 6 months.

However, Managed Medicaid MCO plans (e.g., UnitedHealthcare Medicaid or Blue Cross Medicaid) often follow commercial insurance rules, meaning they usually don’t retroactively cover. Always check with the specific payer.

What happens if I see patients while still pending credentialing?

If you treat patients before your effective date with their insurance, the claims will process as out-of-network. This means:

Patients with out-of-network benefits will have higher out-of-pocket costs.
Claims may be denied entirely if the patient lacks out-of-network coverage.

Self-Pay Fee Schedule: How to Set Fair and Compliant Rates

Should I just hold claims and wait for credentialing to finalize?

Holding claims isn’t always the best solution. If the insurance doesn’t offer retroactive coverage, the claims will still be processed as out-of-network—even if you submit them later. Instead, consider:

Offering patients a self-pay option at the time of service.
Educating patients about their potential out-of-network costs upfront.

How can I explain pending credentialing to patients?

Be honest and transparent. Let patients know:

“We are currently in the process of contracting with your insurance, and claims will be processed as out-of-network until credentialing is complete.”
Offer them options:
1. Pay as a self-pay with a discount.
2. Proceed with submitting the claim to their insurance, knowing they may have higher out-of-pocket costs.

Providing patients with a written financial responsibility agreement can avoid future confusion.

Should I ask insurance companies about retroactive coverage during credentialing?

Absolutely! It’s critical to ask each payer if they will retroactively cover claims before your effective date. If they say no, plan your workflows accordingly. Even if a payer doesn’t offer retroactive coverage by default, they might agree if you explicitly request it.

What are the risks of seeing patients before credentialing is finalized?

The biggest risks include:

Revenue loss: Claims may be denied or processed as out-of-network, leaving you with unpaid services.
Patient dissatisfaction: Patients might be frustrated with unexpected out-of-pocket costs.

To mitigate these risks, always communicate clearly and provide documentation for patients to sign acknowledging their financial responsibilities.

How can I protect my practice financially during pending credentialing?

Here’s how to safeguard your revenue:

Collect payment upfront: Offer patients the option to pay as self-pay with a time-of-service discount.
Verify benefits ahead of time: Confirm if the patient has out-of-network benefits and their associated costs.
Document everything: Have patients sign an agreement acknowledging their claims may process as out-of-network.

How do I handle claims for Medicaid patients during pending credentialing?

Medicaid’s rules vary by state, but most plans allow retroactive coverage for up to six months. However, Managed Medicaid MCO plans often follow commercial payer rules, which means they typically don’t retroactively cover claims. Always confirm the rules with the payer directly.

What are my options for commercial insurance patients?

For commercial insurance patients, the best options include:

Self-pay model: Patients pay upfront with a discount. Once you’re credentialed, you can offer to bill their insurance and issue a refund if any payment is received.
Out-of-network claims: Submit the claim as out-of-network, but warn patients they may face higher costs or denials.

Can I speed up the credentialing process?

Yes! Here are a few tips:

Follow up regularly: Don’t assume the insurance company will update you. Call every 1-2 weeks to check on the status.
Ask for expedited credentialing: Some payers offer expedited processing, especially for new providers or urgent situations—but you have to ask!
Provide all documents upfront: Missing paperwork can delay the process significantly. Double-check that your application is complete.

How can I avoid future issues with pending credentialing?

The key is preparation and communication:

Start the credentialing process as early as possible—preferably 3-6 months before seeing patients.
Create a workflow for handling patients with insurances you’re not yet credentialed with.
Train your staff to educate patients about their financial responsibilities.

What should I document when discussing pending credentialing with patients?

Always document the following:

The patient was informed their claims would be processed as out-of-network.
Whether the patient chooses to pay as self-pay or have their claims submitted to insurance.
A signed financial responsibility agreement.

This protects your practice from disputes and ensures patients are fully informed.

Wrapping It All Together

Handling claims during pending contracting and credentialing status is more about strategy than shortcuts. You can minimize disruptions and keep your revenue flowing by communicating with patients, aligning your team, and staying proactive with payers.