Credentialing is the term used in medical billing and medical billing services for this process. It enables doctors, clinics, and hospitals to join insurance networks and to get reimbursed.
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In healthcare, getting paid isn’t as easy as just submitting claims. Payments are late, claims are refused, and providers may even lose the ability to bill some insurers if they don’t have the right credentials.
Credentialing is the term used in medical billing and medical billing services for this process. It enables doctors, clinics, and hospitals to join insurance networks and to get reimbursed.
In this blog, we will talk about credentialing; namely, what it is, its importance, and how it is shifting and changing in today’s healthcare system.
Credentialing is the process of verifying that a healthcare provider has the proper qualifications (education, licenses, training, and/or experience) to provide care that is acceptable to insurers. It is a quality check for patients to receive care from qualified professionals and assists providers in getting reimbursed properly and in a timely manner while also reconciling claims.
Doctors’ credentials are verified by insurance payers, healthcare organizations (hospitals and clinics), and Credentialing Verification Organizations (CVO).
Credential verification is conducted by verifying the provider’s education, licenses, training, work history, and malpractice history, usually by primary source verification, background check, and committee review.
The credentialing process may seem confusing, but it often involves a straightforward process:
Credentialing may appear to be just another layer of paperwork. However, it’s actually the bond between the financial and clinical aspects of healthcare. For providers, credentialing in medical billing is not optional; it’s their opportunity to be compensated for the care they provide.
Here are a few important reasons that credentialing is so vital:
Insurance companies will not pay a provider’s claim until that provider is credentialed. Credentialing can assist in mitigating unnecessary denials in terms of care or delays in payment.
When patients know their provider is verified by insurers, it reassures them that they’re in qualified hands.
Credentialing protects the provider’s practice and ensures the provider meets all state, federal, and payer requirements and indemnifies or defends the practice against penalties.
At the clinic and hospital level, credentialing is essential to ensure continued revenue flow and to ensure no interruption occurs within the reimbursement process.
Many practices also rely on medical billing consulting services to navigate the credentialing process, avoid revenue disruptions, and stay compliant with payer requirements.
Credentialing is not simply a step; it is a process of ascertaining that healthcare providers are qualified, reputable, and authorized to provide care to patients in the healthcare system. Just as you have different types of medical billing, credentialing has variations of its own that substantiate that they have subsequently secured proper authorization to provide care.
The first phase of credentialing begins when an insurance company and sometimes a hospital verifies a provider’s education, certification, licensure, and history of work and malpractice. Depending on the insurance company and the specialty of the provider, the credentialing process can take a few weeks to several months.
Pro Tip: Updating your CAQH profile or one similar to it can speed up the credentialing process.
Example: A new physician who has just joined a clinic won’t be able to submit claims to Medicare until their initial credentialing is fully completed.
Re-credentialing helps the insurance company and the hospital check in every couple of years. They verify that the provider’s licenses and certifications are still active and that the provider has not experienced any events of note in their professional history.
Where credentialing documents who a provider is, privileging documents what the provider is allowed to do at the facility.
An example can be if a surgeon may be fully credentialed, with no issues from payers, but still needs hospital privileging to perform surgery and bill for it.
Electronic health records (EHRs) are more than the digital form of patient charts; they are part of increasing the efficiency and lessening the possibility of errors involved throughout the credentialing process.
EHR systems will have a provider’s credentials, licenses, and certifications stored in one space, making verification easier when a provider is initially credentialed or re-credentialed.
In many EHR systems, the administrator will get a notice letting them know when a provider’s credentials are getting close to expiring, thereby helping avoid a lapse and possible setbacks in billing documents that can impact revenue.
Some EHRs integrate directly with credentialing services such as CAQH, which provides for smoother data transitions and less duplicate data entry.
EHRs allow for better communication between the healthcare teams and their checklists that ensure team collaboration and education between all team members.
According to a Modio Health 2023 report, 85% credentialing applications were submitted with an error, blank data, or missing an authorization or signature.
Credentialing in medical billing has seen significant progression over the past ten years. While the main objective still is to validate provider qualifications, many of the methods and tools have greatly changed.
It is estimated that approximately 85% of credentialing applications contain either inaccurate, missing, or just outdated information, which typically delays or denies the application.
Overall, credentialing today is much faster than prior credentialing processes, it is much more accurate, and much easier to work with than credentialing from the past. For providers, this often means fewer delays, more accurate reimbursement, and much less administrative workload.
Credentialing in medical billing is not a task for one person to accomplish. Credentialing requires a team effort among multiple parties. Understanding the individuals involved in the credentialing process can help administrators to place it in context and steward it more consistently.
The healthcare provider, regardless of whether a physician, nurse, therapist, or other licensed healthcare provider, serves as the foundation of credentialing. It is the responsibility of the provider to provide up-to-date information and accurate details about their education, training, licenses, certifications, and professional experience.
Hospitals, clinics, and group practices must verify credentialing and manage credentialing at an organizational level. Organizations are also responsible for ensuring that their providers obtain and maintain compliance with regulatory bodies and organizational policies.
Commercial insurance and government payers – such as Medicare or Medicaid – require providers to be credentialed before they are reimbursed. Here’s a fact: for new providers, delays in payer credentialing can limit reimbursement to migratory months, impacting the cash flow of any new practice.
Some healthcare organizations choose to outsource credentialing to credentialing verification organizations (CVOs). CVOs are third parties whose specialty is primary source verification (this is checking licensing boards, medical schools, and former employers directly).
Organizations such as The Joint Commission (TJC) or NCQA (National Committee for Quality Assurance) establish the structure by which medical billing occurs through credentialing. Organizations in healthcare need to follow these structures to obtain and maintain accreditation, as well as avoid penalties.
Credentialing in medical billing verifies that a provider is qualified, compliant, and reimbursed for services. Every part of the credentialing process, including first-time applicants, timely re-credentialing, and privileging, safeguards patients, providers, and practices.
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