What is Credentialing ?

Credentialing is a process that verifies healthcare providers’ education, training and experience. The purpose of credentialing is to ensure that physicians meet minimum medical standards of education and training required by law and to provide an added layer of patient safety to ensure physicians meet basic standards of care.

Importance of Credentialing for Physicians & Practices

Physicians need credentialing because it provides physicians with the ability to be granted privileges at hospitals and allow them to treat patients in other facilities. If a physician does not have credentials, he or she cannot legally perform any medical procedures, nor can he or she establish a good reputation in the healthcare system in which he or she operates.

For medical practices, credentialing is the backbone of patient safety and financial stability. Credentialing helps to protect practices from liability for hiring physicians who do not meet minimum standards of care, and it provides practices with the ability to accept different types of insurance and maintain a steady flow of patients. Workers have the rights, duties and an obligation to report any violations of the code of ethics or other policies of conduct. Violation of the code of ethics includes reporting incorrect information, not reporting suspected violations of the code of ethics or other policies and procedures, or and providing false information.

What is Credentialing in Medical Billing?

Credentialing is the process of enrolling healthcare providers into an insurance company’s network (also known as payer enrollment), which is required for insurance companies to provide reimbursement for “in-network” or “credentialed” services.

Without credentialing, the billing department will not be able to submit successful claims to the payers. This leads directly to the denial of claims at the time of submission and the complete loss of revenue for any treatment provided to patients of that insurance.

Full Credentialing Process (Step-by-Step)

Credentialing refers to the different technical procedures followed by healthcare organizations to evaluate the qualifications and competency of a provider for the purpose of providing services within their facility or network. By following the processes thoroughly, you remove many unnecessary delays in revenue.

→ Information Collection: Collecting all required documentation related to the credentialing process begins when you gather all your professional documentation such as copies of your current medical licenses/ certifications, diplomas/degrees, and proof of current malpractice insurance. This data will be the basis for your full application.

→ CAQH Profile Set-Up: The CAQH (Council for Affordable Quality Healthcare) database is what most insurances use to confirm a provider’s information. You will need to set up and attest to your CAQH profile, so the insurance companies can verify your information.

→ Submitting Payer Applications: Submitting applications to your payor once your credentialing process is completed. Once you have completed the credentialing process and have passed the background check you will submit applications to the payors you are wanting to join such as Medicare or Blue Cross.

→ Contracting & Linking: Once the insurances have confirmed credentialing and issued a contract, you will need to sign the contracts. Once you have signed the contract, your NPI will be linked to your practice’s Tax ID for billing.

Credentialing Requirements ( Required Documentation )

Before proceeding with your credentialing process, you need to have prepared a comprehensive Credentialing Documents Checklist. Failure to produce even one of these items can result in your credentialing application being delayed by up to 30-days for every missing document.

→ NPI Number (National Provider Identifier): The NPI Number is a 10-digit number given to every healthcare provider in the United States of America; it is the minimum requirement to obtain for any medical billing or enrollment type transaction.

→ CAQH Profile: The CAQH Profile is an online, central database that provides specific information about each Physician’s and other Healthcare Providers’s qualifications and is used to verify this information for most Private Payer health insurance companies; this database must be kept up dated and attested to every 90-days.

→ State Medical License: In order for a provider to practice medicine legally, they must have a current and active State Medical License in the state that they are providing services. Expired or Restricted Licenses will result in immediate denial of credentialing.

How Long Does Credentialing Take?

Typically, the credentialing process takes around between 90-120 days from start to finish; it can take longer because many insurance companies are receiving thousands of applications and reviewing them is a slow process which requires ongoing follow-up.

Reasons for delays could include: incomplete applications, slow response time from medical schools in verifying education credentials, and/or the number of applicants submitted to the insurance company. Also, even one letter off (i.e. a typo) in the provider’s name or address will reset the 90-day timeframe.

Common Credentialing Problems & Fixes

Practices often lose countless hours and thousands of dollars because of administrative mistakes that cause credentialing denials. Identifying these errors early can result in saving that time.

→ Not Having CAQH Profile Complete: If you have not completed your CAQH Profile through attestation or are missing the required documents, then the payers are unable to proceed in reviewing your documents or add to your current profile. To correct this issue: Set up reminders to update the CAQH Profile every 90 days, and don’t miss the deadline!

→ Not Following-Up: Insurance companies will not contact you with a notification of missing documents; rather they simply will not continue to process your file. To fix this issue: Call the payers Credentialing Department every 15 days to find out the status of your application.

→ Outdated Documentation: Denials will automatically occur if you present your expired malpractice certificate or an expired DEA license. To fix this: Provide a digital folder of all current documents and track their expiration dates.

Credentialing for New Practices

When you set up a new clinic, you must ensure that your business entities are correct before hiring your practitioners. You will not be able to start the credentialing process until you have legally created your business.

→ Obtain an EIN (Tax ID): You must provide federal Employer Identification Numbers to the IRS. All of your insurances’ contracts and payments will be assigned to that specific number.

→ Register your Group NPI (Type 2): A physician will have an individual NPIs (Type 1); however, a new office must register for a Group NPI (Type 2) to bill as an organization instead of an individual.

Insurance Credentialing (Major Payers)

To understand how to enroll as a provider with various payers you will need to be aware of how each type of payer enrolls their providers because there are different paths to enrollment for the different types of payers.

→ Medicare Credentialing: Enrollment for Medicare is via the PECOS system. It might be the most stringent of all processes; however, even more so than any other insurance, Medicare is the ‘biggest payer’ and covers a significant portion of the population.

→ Medicaid Enrollment: Medicaid is administered at the state level and many requirements to enroll with Medicaid are based upon the state you practice in and thus different, with the exception being that the state does require some form of verification of a criminal background or site visit.

→ Private Insurance: Private insurance companies usually have ‘closed panels’ therefore you must demonstrate to the private insurance company that your practice provides an appropriate level of service to the area in which you provide services.

Credentialing and Maintenance of Credentials

Credentialing is not just a one-time occurrence, but rather an ongoing requirement that keeps you eligible to bill for services. Re-credentialing is typically done every three years by most payers.

→ Updating/Renewing: When the provider obtains their new license or moves to a new office, those updates should be submitted to the insurance companies immediately; otherwise, they will create “ghost” providers (e.g., providers who cannot be billed).

Credentialing: In-House vs. Outsourcing

Many practices are torn between doing their credentialing paperwork in-house and hiring a credentialing service. Whether you choose to do it in-house or use a credentialing service often comes down to the size of your practice and the complexity of the contracts.

While outsourcing has a per-month or per-provider fee associated with it, typically the cost is far less than the revenue that would be lost due to a single month’s worth of denied claims from a paperwork error. In addition, professional credentialing companies have direct access to insurance companies and can handle all the “hold times” and follow-ups for you, freeing up your office staff to provide patient care.

Hospital Privileging and Payer Enrollment

Though they appear to be alike, hospital privileges and payer enrollment are actually very different processes. Hospital privileges allows a physician to perform certain procedures in a particular hospital; however there is a second step in allowing the physician to be paid by an insurance company for the work performed (i.e., enrolling him/her with the insurance company). While the physician may have been granted privileges to perform work in that hospital, without filing an enrollment application to the insurer, the physician will likely be considered an “out of network” provider for insurance billing purposes.

Telehealth Credentialing Requirements

Credentialing for telehealth is an important means of assuring that physicians performing video/phone-based services meet the same safety and quality of care standards that would be expected to be met for face-to-face visits with patients. The most important requirement is that the physician providing telehealth services must be credentialed in the state in which the patient resides at the time of the consultation.

Practices also need to make sure that their malpractice insurance covers “cross state” virtual care and (in some instances) that they have executed a separate “telemedicine addendum” before the insurance payer will provide for reimbursement for a telehealth consultation.

Credentialing for Mid-Level Providers (NPs & PAs)

(Nurse Practitioners/Physician Assistants). Credentialing of Nurse Practitioners and Physician Assistants (mid-level providers) requires complete credentialing which includes the use of “supervisory agreements” to tie them directly to one Physician/Doctor (MD/DO).

In addition, mid-level providers may be reimbursed at a reduced rate, typically at 85% of the rate paid to the Medical Physician. Therefore, it is important to properly enroll mid-level providers in order to avoid billing errors that may be deemed as healthcare fraud.

Sanction Monitoring & OIG Exclusion Checks

Periodic verification of a physician’s ongoing eligibility to participate in federal programs like Medicare; was any provider sanctioned recently? The OIG tracks all providers who are excluded from participating in federally funded programs (the Exclusion List) monthly and should be checked prior to hiring any provider for the practice.

If you hire or continue to employ any excluded provider, your practice will incur penalties that may exceed $1 million. You conduct routine and periodic checks to ensure that you continue to employ only professional, licensed, and legal providers.

Delegated Credentialing for Large Groups

Credentialing delegation involves an agreement between an insurance company and a large hospital or medical group to allow the medical institution to conduct credentialing and verification processes in order for insurance companies to trust their decisions. The insurance company does not verify every doctor before processing their applications; rather, the insurance company relies on the internal credentialing and verification process of the medical institution.

The delegated credentialing process streamlines onboarding to the point where a full-time physician may be able to begin seeing patients and billing insurance in as little as two to three weeks, compared to the traditional path through the insurance company, which could take 90 days.

The Role of NPI Type 1 vs. NPI Type 2

Knowing which specific NPI Number type your provider has is important in order to accurately bill the patient and prevent their claim from being denied.

→ NPI Type 1 (Individual): This is designated to the individual provider and is to be used by each qualifying individual healthcare professional (e.g., physicians, nursing staff, and therapist) throughout their existing career journey.

→ NPI Type 2 (Group/Organization): This is for the business entity through which services were rendered (e.g., clinic/hospital). The provider will use the group # on claim forms that will allow the payor to send funds to where they want them sent.

Credentialing Software & Automation Tools

Credentialing softwares can help to lessen the amount of administrative work by over 50% because they keep track of all documentation related to each provider in one easily-accessible location and automatically alert the administrator when a provider is close to having their license or certification expire.

Using these credentials also helps to prevent revenue from lapsing due to administrative oversight, by automatically renewing each provider’s information in the CAQH database with a simple “one-click” process. This ensures that all of your practice’s records are up-to-date with every insurance company with whom you do business.

Impact of Credentialing on Patient Retention

Your Doctor’s In-Network Status Has a Huge Effect on Patient Retention. Patients will likely receive a large bill if they learn that their provider does not have a credential with their health plan and will seek a new provider.

Credentialing can help to provide successful patient acquisition; when the Practice manages the insurance side efficiently, it builds confidence in the overall patient experience and makes it easier for the Patient to make a return visit.

Frequently Asked Questions (FAQs)

How often should I update my CAQH profile?
You must attest (confirm) your data every 90 days. If you fail to do this, insurance companies may drop you from their network.

Can a doctor see patients before credentialing is done?
Yes, but the practice cannot bill insurance for those visits. Usually, these visits are treated as “self-pay” or the revenue is lost.

What is the fastest way to get credentialed?
The fastest way is to have a 100% complete document folder and a fully attested CAQH profile before you even submit your first application.

Do I need a separate NPI for every state?
No. Your NPI Type 1 is a national number that stays the same regardless of which state you practice in.

Need Expert Help with Medical Credentialing?

Managing the medical credentialing process can be daunting and lengthy for busy healthcare providers. A minor mistake made on your CAQH profile or payer application could result in lost income for several months and denial of claims.

We offer full-service provider enrollment and credentialing services that keep your practice compliant and allow your billing to be uninterrupted. We manage everything from NPI registration to CAQH maintenance, primary source verification, and negotiating contracts with payers.

Would you like to streamline your practice? Check out our integrated medical credentialing services to see how we can simplify the paperwork required to allow you to concentrate on caring for your patients.