Credentialing is essential to keeping your providers active with payers and able to see patients. But the cost, complexity, and time requirement of credentialing can strain even the most organized practice. This raises a fundamental question many healthcare leaders face:
Is credentialing more cost‑effective and efficient when managed internally, or should it be outsourced to specialists?
At Konnext Solutions, we’ve helped dozens of practices evaluate this choice objectively. What we’ve seen repeatedly is that organizations often underestimate the true cost of in‑house credentialing and overvalue the perceived control it provides. This article breaks down the real costs and benefits of each approach, with actionable data and practical insight.
The Hidden Expense of In‑House Credentialing
Many practices assume that credentialing internally is cheaper because it avoids paying vendors. But when you calculate all related expenses, that assumption rarely holds up.
Direct and Indirect Costs You Might Be Missing
When credentialing is handled in‑house, your expenses go well beyond the coordinator’s salary:
- Salary + Benefits: A credentialing coordinator often costs $45,000–$65,000 per year before benefits. With payroll taxes, healthcare, and retirement contributions, total compensation can reach $70,000–$90,000.
- Training and Ramp‑Up: New hires typically take 3–6 months to become proficient in credentialing processes. During this time, credentialing quality and speed often lag.
- Turnover Costs: The average turnover cost for administrative roles is significant. Recruiting, onboarding, and lost productivity easily add thousands more.
- Software and Infrastructure: Credentialing software, tracking systems, and secure document management can cost between $3,000–$15,000 annually and someone has to manage it.
- Administrative Oversight: Practice leadership or office managers spend hours supervising, troubleshooting, and intervening, time that could be spent on higher‑value tasks.
When you add these up for a small or mid‑sized practice, total annual credentialing costs range from roughly $75,000 to $120,000 or more.
What Happens When Your Credentialing Lead Leaves?
One of the biggest risks in a purely internal model is turnover. If your credentialing coordinator resigns or takes unexpected leave, pending applications can stall. Deadlines get missed. Providers can’t start seeing patients. And lost revenue can mount quickly.
Loss of income during credentialing delays isn’t theoretical:
A provider waiting even 30 extra days to credential can cost a practice tens of thousands of dollars in unrealized billing opportunities.
The Case for Outsourced Credentialing
Credentialing firms typically charge a predictable fee based on the number of providers and the breadth of services. Industry standards usually fall between $150 – $400 per provider per month, depending on complexity.
Let’s look at how this compares with internal credentialing:
Cost Comparison Example
Practice with 5 Providers
| Expense Category | In‑House Annual Cost | Outsourced Annual Cost |
| Staff salary + benefits |
$70,000 – $90,000 |
$0 |
| Credentialing software |
$3,000 – $10,000 |
$0 |
| Training & education |
$2,000 – $5,000 |
$0 |
| Lost revenue due to delays |
$25,000 – $50,000+ |
$0 |
| Outsourced credentialing fees |
$0 |
$15,000 – $24,000 |
| Faster revenue capture |
$0 |
$25,000 – $50,000+ |
Net Outcome: Outsourcing often delivers an annual saving of $60,000 – $120,000 or more when compared to internal credentialing, and that’s before factoring in reduced error rates and streamlined workflows.
Speed Matters: Faster Credentialing Means More Revenue
Time to credential isn’t just a convenience metric, it directly affects your bottom line. Primary care physicians and specialists often generate significant monthly revenue. Every week a provider waits for payer enrollment approval is revenue that practice can’t realize.
Credentialing specialists accelerate timelines because they:
- Know payer requirements and contact points
- Maintain dedicated workflows and escalation channels
- Handle verifications efficiently
- Track deadlines automatically
In contrast, credentialing done between other responsibilities rarely moves with urgency, leading to unnecessary delays and lost income.
Minimizing Errors and Compliance Risk
Credentialing isn’t just paperwork, it’s compliance. A single missed license expiration, missed re‑credentialing deadline, or incorrect application can:
- Lead to reimbursement denials
- Require refunds of billed services
- Result in providers being dropped from payer networks
- Expose the practice to audit risk
Credentialing firms invest in automated alerts, secondary quality checks, and ongoing payer policy monitoring. Internal teams often lack these systems, increasing the risk of costly mistakes.
Opportunity Cost: What Else Could Your Staff Be Doing?
When your office manager or administrator spends hours each week on credentialing, you’re paying a hidden cost: lost opportunity.
That time would be better spent on activities such as:
- Negotiating more favorable payer contracts
- Optimizing office workflows
- Improving patient experience
- Supporting provider recruitment and retention
Outsourcing credentialing liberates internal staff to focus on higher‑value priorities that directly impact the practice’s growth and financial health.
Scalability: Growth Without Growing Pains
Internal credentialing teams struggle to scale. When you hire new providers or open additional locations, your credentialing workload spikes. Managing that surge in‑house means hiring more staff, often before the workload justifies the ongoing cost.
Outsourced credentialing adapts more flexibly:
- Extra resources during peak periods
- No long‑term staffing commitments
- Consistent performance whether you’re credentialing one new provider or 20
This makes outsourced credentialing a strategic choice for practices planning future growth.
Technology and Expertise You Don’t Have to Buy
High‑quality credentialing software can be expensive, and keeping it updated with payer rule changes requires constant attention. Outsourced providers bring enterprise‑grade systems without passing the full license cost on to you.
Their teams also stay on top of:
- Payer enrollment requirements
- State licensing changes
- Insurance network policies
- Recredentialing deadlines
- Regulatory updates affecting credentialing
This expertise is costly to replicate internally, but is included as part of outsourcing.
How to Evaluate Your Credentialing Strategy
Before deciding between in‑house and outsourced credentialing, consider asking:
Cost‑Related Questions
- What are the true annual costs of your internal credentialing team?
- How much staff time goes into credentialing per week?
- What revenue losses could be tied to credentialing delays?
Capability Questions
- Does your team have certified credentialing expertise?
- How quickly can credentialing needs be addressed during turnover?
- How well do you track expirations, recredentialing, and payer requirements?
Scalability Questions
- Is your credentialing process flexible to handle rapid growth?
- What happens to workload spikes?
- Can internal systems support future plans?
Often, honest answers to these questions point toward outsourcing, especially for practices with fewer than 20 providers.
Conclusion: Outsourcing Credentialing Pays Off
While maintaining credentialing internally may seem cost‑effective at first glance, a detailed analysis reveals a different story. Outsourced credentialing significantly reduces direct and hidden expenses, accelerates time‑to‑credential, minimizes compliance risk, and frees up staff for strategic work that grows your practice.
For many practices, the move from in‑house credentialing to a specialized partner like Konnext Solutions results in:
- Lower overall costs
- Faster credentialing timelines
- Fewer errors and compliance issues
- Better use of internal staff time
- Scalable support aligned with growth
Ready to see how credentialing outsourcing can impact your bottom line?
Contact Konnext Solutions for a personalized cost‑benefit analysis tailored to your practice.
