Medical insurance credentialing 101: Everything you need to know

Medical insurance credentialing is the way insurance companies verify that medical providers are legitimate and qualified to receive reimbursement for services provided. When a provider is credentialed with a given payer, they can bill the payer directly and receive reimbursement.

It's an involved and time-consuming process, but is of great value to a practice. This article will cover:

We will conclude with an FAQ section to cover remaining questions. From avoiding hours of paperwork to getting paid by insurance companies, find out what you need to know about medical insurance credentialing.

Being credentialed is not the same as being licensed. In the United States, a medical license indicates that you have:

Some insurance companies, including Medicare, require additional, verified information, including information about malpractice claims, to officially deem you a safe and trusted healthcare provider for their members.

By obtaining certification with multiple health insurance companies, you gain the ability to submit claims for a diverse array of treatments and promptly receive reimbursement.  

Credentialed providers can expand their patient base by accepting a variety of insurance plans, thus increasing practice revenue. Being listed on insurance websites as an in-network provider improves visibility and credibility, attracting more patients. Insurance credentialing also helps providers access a broader number of insurance benefits for their patients, enhancing the affordability and accessibility of healthcare services.

Moreover, credentialing helps streamline administrative tasks, reducing overhead costs associated with billing and claim processing. Being credentialed with insurance plans can indirectly affect patients' insurance deductible costs by giving them access to lower-cost healthcare services within their insurance network. Ultimately, it facilitates better patient care by ensuring seamless coordination with insurance carriers.

Insurance credentialing for healthcare providers involves several key steps to ensure eligibility to participate in insurance networks and receive reimbursement for services rendered.

Credentialing requirements vary by state. Check your state’s medical board website to find out which staff members must go through the credentialing process. 

Generally speaking, anyone in your practice who is a medical provider must be credentialed. This includes physician specializations as well as nurse practitioners, physician assistants, respiratory therapists, and nuclear medicine technologists.

At this point, apply for or update your national provider identifier (NPI), if you haven’t already. This is a unique 10-digit designation that each healthcare provider uses to identify themselves in their standard treatment documentation and transactions.

Not all insurance companies or medical insurance plans are standard in every area. In addition to major national carriers such as Aetna, Blue Cross/Blue Shield, Cigna, Humana, and United Healthcare, consider any common regional insurance carriers, along with Medicare and state-based programs like Medicaid.

You may also want to consider becoming credentialed with supplemental insurance carriers. One way to go about this is to conduct market research  — you can call or visit the websites of your competitors to see which insurances they work with. Once you have compiled a list, call each insurance company to determine which panels are open to new practitioners.

Now that you’ve identified which insurance boards to approach for insurance credentialing, complete a pre-application for each one. This allows the insurance carriers to conduct a semblance of a background check to see if you have the basic qualifications for practicing medicine.

Once you’ve submitted your pre-applications, gather all of the pertinent information. You will need to provide the following:

Group credentialing is available when you are joining or starting a larger practice. The initial application process is similar to what happens when an individual provider or a practice with just a few physicians applies for credentialing. However, the ongoing process focuses only on the individual new provider information because the physical practice information doesn’t change.

Send this information as one cohesive packet. If you send it piecemeal, portions will likely be misplaced or attached to the wrong file. To help you organize your data, consult the following  checklist you can use to ensure you have gathered everything you need.

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The insurer may use a third-party company called a credentials verification organization (CVO) to gather and review your documentation. Most will accept your information via email, electronic document transmission, or snail mail.

In some cases, these insurance experts may do a lot of the background searches to gather various pieces of your packet. For it to do this, you will likely need to sign an affidavit allowing it to access your personal information.

Regardless of whether you work with a CVO or a company representative, get a contact name, direct phone number, and email address when possible.

Once the insurance company approves you for credentialing, you will enter the contract phase. At this point, you and the insurance company have finalized a contract that specifies the in-network services you will provide, the percentage of your fee they will reimburse, and how you will receive reimbursement from them.

The contract will also define which party is responsible for instances that involve multiple insurance companies. The coordination of benefit-filing responsibilities often initially falls on the practice, then shifts to the insurance companies as they determine which company pays what percentage of the treatment bill.

Once your insurance company credentials are in place, you can accept your patients’ various insurance plans. Afterward, you can submit those claims to the associated insurance companies for reimbursement, or even better, outsource that function and have someone else manage the insurance billing process on your practice’s behalf.

Once credentialed, a practice can enroll with a clearinghouse to submit insurance claims electronically.

Healthcare providers should take a number of important considerations into account when choosing an insurance credentialing expert. Their services guide customers through the insurance billing and payment procedures, help with insurance card verification, and support recredentialing in subsequent years. They also can help providers maximize their participation in insurance networks while avoiding delays in the credentialing process.

A provider's first priority should be to hire advisors who have experience negotiating the maze of insurer credentialing requirements. Knowing one's way around insurance documents, health insurance premium quotes, and individual health insurance premiums is a must. Healthcare providers should also look for insurance credentialing consultants who have a history of successfully negotiating good credentialing results on their customers' behalf.

Providers also should consider the consultant's communication and advocacy skills with insurance companies, namely how well they handle inconsistencies and problems.

Many healthcare providers have questions about the insurance credentialing process. Taking time to review answers to these questions ensures clarity and understanding, enabling providers to navigate the process more effectively and efficiently.

Every practice that wants to bill an insurance company needs to be credentialed. This includes hospitals, clinics, physicians, chiropractors, dentists, physical therapists, behavioral health therapists, occupational therapists, optometrists, and social workers. 

There are 3 potential challenges that might arise during your credentialing process.

First, not all insurance providers within an area are open to additional medical professionals. In some instances, the insurance company’s market research may indicate the market is at a saturation point regarding its services. If this happens, ask the representative if they know when that decision may change.

Additionally, share any information you have that the insurance company doesn’t, such as if you are taking over an existing practice and will acquire an established patient base that is accustomed to having their insurance accepted. This may influence a different decision.

Second, some companies require experience before contracting with a new physician. This doesn’t apply to all companies and is less frequent than it used to be. Still, some indicate they want a medical professional to have anywhere from 6 months to 2 years of experience before they will include that healthcare provider in the credential process.

Third, many companies do not plan for enough time to complete the process. Multiple websites and agencies suggest you need to plan 6 to 10 hours to gather your information to simply begin the credentialing process. Once you submit your packet to each insurance company, you will have to schedule time to follow up with those organizations, gather additional information they request, and keep your application process moving forward.

Know that just because these are potential challenges, it is not a given that you’ll run into them. Working with a health insurance brokerage company or insurance credentialing consultants can help navigate these challenges and ensure compliance with insurance policy and coinsurance requirements outlined in the contract.

Healthcare providers will face challenges in joining insurer networks and receiving reimbursement for services if they make mistakes during the insurance credentialing process. For example, submitting credentialing applications that have incorrect or missing information will cause approval delays.

Not thoroughly researching and understanding the specific requirements of each health insurance company can result in mismatched expectations and potential issues with insurance costs and reimbursement rates. Private health insurance companies often have their own unique sets of criteria, documentation requirements, and application procedures for credentialing healthcare providers. Not effectively communicating with insurance representatives or failing to respond promptly to inquiries can result in delays or denials.

Forgetting to renew licenses, certifications, or malpractice insurance can lead to credentialing lapses and difficulties in maintaining provider status with insurance companies. Unexpected insurance costs, reduced reimbursement rates, and unsavory clauses might emerge from insurance contracts that are not well-reviewed and understood.

Due to the plethora of moving pieces in this overall process, it is best to:

The length of the process varies depending on the company or agency you work with. In general, you can estimate the approval time:

If you plan to practice before you receive your official credentials, you can request a statement of supervision. This will allow you to temporarily bill under a supervising physician until your credentialing process is complete.

You will need to renew the insurance credentials for your practice. The frequency depends on the company. Some require renewals every 12 months, others up to every 3 years.

The good news is that there are companies you can hire and software programs you can use to manage credential processes.

You must know that any time your practice is affiliated with a different employer tax ID number (EIN), you will need to obtain new credentials. Your health insurance credentials do not move with you from one medical practice to another.

This depends on your practice type and the credential application you completed. In some cases, medical practitioners can complete a group application, but not all practices are eligible for this umbrella.

When a new medical professional joins your practice:

You already know you need to renew your credentials with the multiple insurance companies and agencies you will work with and to whom you will submit payment claims. Still, you should also be aware that you will need to validate that your CAQH information is current.

"In-network" means that a provider is credentialed with a given insurance company, and is eligible to submit claims for reimbursement. Being in-network allows patients with primary insurance coverage to access the provider's services at negotiated rates, potentially reducing their out-of-pocket expenses. It's essential for healthcare providers to regularly review their in-network status with health insurance companies to ensure continued eligibility for reimbursement.

Even the tiniest error in the credentialing process leads to claims being rejected by the payer, which means major delays in the provider’s revenue stream. Timing is everything. Sometimes missing a submission window results in the healthcare provider not being paid at all.

A major payer like Medicare or United Healthcare might comprise a significant percentage of a practice’s revenue. If most of your claims are held up for 3 months or more, you might not have enough revenue to keep your doors open. You could even be forced to stop seeing clients until the issue gets resolved. The average denial from a large payer costs the provider a staggering $10,000 a day.

One clinic recently was denied by Blue Cross Blue Shield, their largest payer, due to a minor administrative mix-up. This caused them to lose $100,000 a month. 

They had to terminate their contract with their billing company, and make other painful financial adjustments. By the time they turned to a credentialing service, they were out $350,000 — all because of one missed piece of paperwork. Fortunately, the credentialing service helped them get back on track.

On the other hand, they were not able to recover the lost revenue because filing deadlines had passed. Their example illustrates how important it is to dot every “i” and cross every “t.”

Providers have between 30 and 90 days after the day of service to submit a claim, depending on the state and payer. Payers then have 90 to 120 days to pay on that claim. If the claim is rejected and then resubmitted, the waiting period starts all over again. However, the payer’s 90-day clock does not reset if a claim is denied.

Healthcare providers could be faced with timely filing issues if they see patients when they are not credentialed properly with payers. Payers will not process claims that occur when the provider is not credentialed. Time can easily run out, and the provider will never be paid for work done.

Medical practices typically assign one person to handle the credentialing process. The job includes gathering about 20 different documents, ensuring that the data is accurate, and submitting it to various payers one at a time. 

This person would ideally be responsible for recredentialing in the following years. But if the person leaves, is reassigned, or even just gets too busy and forgets about credentialing, organizational knowledge is lost and deadlines are missed. That’s why many practices choose to use credentialing software or outsource tasks to insurance credentialing consultants who offer this service. Outsourcing to a credentialing service provider is one of the simplest ways to manage the process, ensuring providers remain eligible to receive reimbursements through qualified health insurance plans.