The Credentialing Investment Gap: Why Healthcare’s AI Spending Misses a Million-Dollar Problem 

By Elena Pak, Credentialing Department, WCH 

A new industry report reveals a striking disconnect in healthcare’s technology investment strategy: organizations are losing over $1 million annually to credentialing delays, yet only 12% of their AI investments address these revenue-draining administrative processes. 

Medallion’s 2026 State of Payer Enrollment and Medical Credentialing Report, surveying over 550 healthcare leaders from hospitals, provider groups, health systems, and payers, documents measurable financial losses from credentialing bottlenecks while most AI resources flow toward clinical applications. 

The data raises a fundamental question: Are healthcare organizations strategically prioritizing long-term clinical innovation, or simply overlooking their most expensive administrative problem? 

The Revenue Crisis 

More than half of hospitals and provider groups surveyed report measurable revenue loss directly tied to credentialing delays, with many organizations losing over $1 million annually. When newly hired physicians cannot see patients because credentialing paperwork remains incomplete, every day represents lost billable encounters. 

“Most provider groups and payers are in survival mode,” explains Jennifer Mohler, Chief Revenue Cycle Officer at Southwest Medical Imaging. “Gone are the days of providers staying with an organization for a significant portion of their career. This makes having a strong enrollment process more critical than ever. The risk of lost or delayed revenue for provider groups has never been higher.” 

Increasing provider mobility—with physicians moving more frequently between organizations—amplifies the business impact of credentialing inefficiency, making rapid onboarding a competitive differentiator. 

The Workforce Crisis 

Beyond revenue losses, 38% of healthcare organizations surveyed report high turnover or burnout in both administrative and clinical roles associated with credentialing, while another 20% indicate vacancies across medical staff services teams. 

This staffing crisis compounds the problem: understaffed departments process applications more slowly, creating longer delays, which increases revenue losses, constraining budgets for hiring. Credentialing professionals face mounting workloads of repetitive manual tasks—precisely the work that drives talented employees to leave healthcare administration. 

The Denial Rate Problem 

Nearly one-third of healthcare organizations experience claim denial rates between 25-50%, with 40% of these denials tied directly to payer enrollment and application-related errors. 

These administrative failures—incomplete documentation, missing signatures, outdated provider information, incorrect enrollment forms—trigger costly rework. Each denied claim requires staff time to identify errors, resubmit documentation, manage appeals, and follow up with payers. 

The AI Investment Paradox 

Healthcare organizations are investing heavily in AI, yet only 12% of AI investments and initiatives touch credentialing or enrollment. The overwhelming majority flows toward clinical and patient-facing use cases. 

Why the disparity? 

• Visibility: Clinical AI generates headlines. Organizations announce systems that detect disease, not systems that process paperwork faster. 

• Time horizons: Clinical AI targets long-term transformation; administrative automation delivers immediate but less transformative returns. 

• Organizational structure: Credentialing departments often lack the executive advocacy that clinical and IT departments command when competing for innovation budgets. 

• Complexity: Credentialing involves multiple external stakeholders—state boards, specialty boards, payers, hospitals—each with unique requirements. 

What Organizations Are Missing 

Derek Lo, CEO and Founder of Medallion, frames it directly: “The data isn’t subtle. Credentialing delays are costing organizations real money. Behind every delay is a stack of manual, error-prone processes that are ripe for automation. The organizations that move first will unlock revenue faster, reduce risk, and free their teams to work at the top of their license.” 

Credentialing automation delivers compounding returns: it accelerates revenue, addresses workforce burnout, reduces denial rates, improves provider satisfaction, and frees administrative staff for higher-value work. Few technology investments claim such multi-dimensional impact. 

Strategic Implications 

For organizations experiencing delays: 

• Quantify revenue impact specific to your specialty mix and market position 

• Assess whether current processes can meet growing provider mobility trends 

• Evaluate whether administrative automation might deliver faster ROI than clinical AI projects 

For technology planning teams: 

• Consider whether 12% allocation reflects strategic prioritization or organizational blind spots 

• Review whether existing systems include underutilized automation capabilities 

• Require vendors to demonstrate measurable outcomes, not projected gains 

For credentialing teams: 

• Document time spent on manual tasks automation could eliminate 

• Quantify error rates and rework burden to build the business case 

• Identify specific bottlenecks where automation delivers immediate impact 

Implementation Realities 

Organizations face legitimate challenges: technical integration across multiple external stakeholders, regulatory compliance concerns, resource constraints in departments lacking IT support, and variable returns depending on context. 

However, the survey data suggests these challenges may not justify the current investment disparity. Organizations losing seven figures annually while allocating only 12% of AI investment to the problem face a clear question: Is current allocation strategically sound, or are we prioritizing excitement over essentials? 

Tailored Insights 

Recognizing that credentialing challenges manifest differently across organization types, Medallion structured the 2026 report with tailored summaries for financial leaders, operational teams, and executives, plus specialized insights for provider groups, health systems, and payers—acknowledging that effective solutions require understanding specific pain points rather than one-size-fits-all approaches. 

The Medallion report documents a measurable gap between where healthcare organizations experience operational pain (credentialing) and where they allocate technology investment (predominantly clinical applications). 

Whether this represents strategic misallocation or reasonable prioritization remains context-dependent. Organizations with efficient credentialing and strong clinical AI use cases may be making optimal choices. Organizations losing millions to delays while pursuing speculative clinical AI pilots may need reconsideration. 

What’s clear: credentialing delays impose real, quantifiable costs. The workforce faces documented burnout. Denial rates create measurable rework. Provider mobility trends suggest intensifying challenges. 

Healthcare organizations can accept credentialing inefficiency as unavoidable, or recognize that AI technologies transforming clinical care could unlock immediate value in administrative operations—if they choose to invest there. 

The report doesn’t prescribe universal answers. It provides data to inform each organization’s specific strategic choice about where AI investment delivers greatest value given their particular circumstances, challenges, and objectives. 

The question isn’t whether to automate credentialing—it’s whether the financial impact, workforce crisis, and denial burden justify maintaining current investment priorities, or whether the 12% allocation reveals a strategic blind spot costing healthcare organizations millions they can no longer afford to lose. 

About the Survey 

Medallion’s 2026 State of Payer Enrollment and Medical Credentialing Report surveyed over 550 healthcare leaders from provider groups, health systems, and payers. The full report, including tailored insights for different organizational roles and types, is available at Medallion.co. 

Analysis based exclusively on Medallion’s 2026 State of Payer Enrollment and Medical Credentialing Report. All statistics, findings, and quotes sourced directly from the published survey results. 

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