The Importance of Insurance Credentialing

Amanda Marten, MSN, FNP-C
Insurance credentialing

Healthcare providers must complete insurance credentialing to receive reimbursement for services. There are many steps to this time-consuming process. In this blog, we’ll review what is insurance credentialing, the process, and who’s required to complete insurance credentialing. We’ll also discuss how healthcare organizations manage credentialing and why it’s essential.

What is Insurance Credentialing?

Insurance credentialing is the process where a healthcare organization registers a healthcare professional through specific insurance networks or government payers, like Medicare or Medicaid, to receive reimbursement for services rendered during a patient’s visit. The primary goal is for the healthcare facility and provider to become “in-network” with the insurance company. 

Before beginning insurance credentialing, healthcare organizations must first complete the provider credentialing process. Next, the healthcare organization initiates contract applications with insurance entities. Once the insurance organization approves the application, the provider is registered as in-network.


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Healthcare Providers That Require Credentialing

Most people think of healthcare providers as physicians, nurse practitioners, and physician assistants. While these professions do require credentialing, many other licensed healthcare providers require insurance credentialing as well. Some of these include:

  • Physical therapists
  • Occupational therapists
  • Speech pathologists
  • Behavioral health therapists
  • Dentists

Insurance Credentialing Process

The insurance credentialing process typically takes 90 to 120 days. Timing depends on the insurance company and if the healthcare facility already has an established contract with that carrier. Here are the main steps of the insurance credentialing process:

  1. Gather and verify the provider’s information
  2. Contact the insurance carrier to begin the credentialing process
  3. Submit the required application and documents
  4. Complete contract negotiations 
  5. Sign the payer agreement
  6. Establish effective date of in-network coverage

Successful Insurance Credentialing

Insurance credentialing is a complex process. In addition to initial credentialing, most insurance networks require provider re-credentialing every two years. Healthcare organizations manage this detailed task in a variety of ways:

  • Hire a credentialing specialist: This person is part of your internal staff and is extensively trained to manage each step in the process. Here are 10 attributes to look for when hiring a credentialing specialist.
  • Use automated, self-service software: Platforms house provider profiles and necessary documents in one location. Software offers a unified view of application status, priority, last update, and more to keep payer enrollments moving forward. Comprehensive software solutions may already work with the most common payer organizations that help jumpstart enrollment reports.
  • Outsource credentialing: For many organizations, contracting with an agency or a fully managed credentialing team is a more reliable or less expensive alternative to hiring.

Why Insurance Credentialing is Essential

Insurance credentialing is vital to establishing and verifying a healthcare organization’s and provider’s standards and qualifications. Here are some reasons why insurance credentialing is important:

  • Confirms Information Accuracy: Healthcare organizations must maintain, verify, and regularly update facility and provider information. Depending on the health organization, provider information is re-verified every couple of months. If there are any updates, they must report this information to the insurance company or vice versa.
  • Meets Compliance Standards: Healthcare facilities and insurance networks are legally required to verify a provider’s credentials before they can provide medical services. This helps to uphold required compliance standards, like policies, training, auditing, and reporting.
  • Authorizes Reimbursement: Insurance credentialing authorizes reimbursement of medical services provided by a specific healthcare provider. Ultimately, this is how the healthcare facility and provider get paid.
  • Upholds Patient Safety: As part of insurance credentialing is verifying a provider’s credentials, this helps to uphold patient safety. The healthcare facility and sometimes insurance network verify a provider’s education, licensing, and experience. This helps confirm a provider is competent and licensed to practice and deliver safe patient care.
  • Provides In-network Coverage: Healthcare facilities and providers are considered in-network for insured patients once the insurance carrier has approved them. This helps patients identify and receive medical services covered by their insurance. If an insurance company is not credentialed with a certain healthcare facility or provider, they are “out-of-network.” The patient’s insurance company will not likely reimburse for out-of-network services. In most cases, the patient is solely responsible for paying the medical bills regarding services completed by out-of-network providers.

Choosing the Right Option for Your Healthcare Organization

There’s no “best” method of credentialing providers, although it’s not advisable to try managing the process using paper and spreadsheets. It comes down to what will work best for your organization. If you are hiring providers faster than you can credential, it may be worth paying a premium to get those healthcare professionals in front of patients faster. But, if your team just needs a little help, credentialing software could be your best bet.

MedTrainer can help, no matter what you decide. See for yourself.