Credentialing in Medical Billing: Process, Benefits & Best Strategies

Credentialing in medical billing plays an essential role in improving the patient experience and providers’ revenue. All healthcare providers, whether a nurse practitioner, general physician, or behavioral therapist, who work in a hospital must obtain credentials with insurance companies. However, it is a complex and lengthy process that involves multiple steps to verify a provider’s credentials and ensure they are qualified to deliver patient care. In today’s guide, we will help you understand what credentialing in medical billing is and the steps you should follow during the credentialing process. Moreover, we suggest best practices to help you credential quickly without delays, improve your reimbursements, and enhance your financial stability.

What is Credentialing in Medical Billing?

Credentialing in medical billing means the verification process of a facility provider’s medical history and personal information. By doing this, healthcare organizations and regulatory authorities ensure that the doctor is certified, experienced, and holds a medical license to treat patients.

Throughout the medical credentialing process, credentialing experts verify skills, experience, medical licenses, and qualifications. After that, the doctor can provide patient care and be reimbursed for the services.

Why Credentialing in Medical Billing is Important?

In medical billing, credentialing is central, as it enables healthcare professionals to receive timely reimbursement for services provided to patients.
Let’s dive into the top five benefits of credentialing in medical billing.

Quality Care Assurance

Credentialing in medical billing confirms that a doctor can serve patients. It ensures that every patient who needs any service receives quality care that meets the healthcare industry’s standards.

Improves Financial Stability

When doctors obtain medical billing credentials, it ultimately improves their financial stability. Why? Because most patients search for in-network doctors, when you’re credentialed with any payer, it improves your patient volume and helps you earn more.

Reduce Denials

One of the standard medical billing errors that leads to denials is “credentialing”. If a provider is not properly credentialed, payers may deny claims due to enrollment issues. Proper credentialing means your insurance claims never get rejected or denied due to credentialing issues.

Build Patient’s Trust

As we discussed above, credentialing ensures quality care, which means many people want to see in-network doctors. Also, it helps build patients’ trust in the provider.

Ensure Compliance

By verifying doctors’ credentials, healthcare organizations ensure that everything meets the standards of HIPAA and other regulatory health wellness policies, ensuring compliance.

What are the two types of Medical Billing Credentialing?

Individual Credentialing

Individual credentialing in revenue cycle management refers to a solo practitioner being verified by healthcare organizations. It means they will be able to look after patients without worry and get paid accurately and on time.

The best part of individual credentialing is that the physician never needs to worry about changing workplaces, as they have their own NPI type I and submit claims on their own. Therefore, it streamlines the overall medical billing process, increases revenue, and reduces payment delays.

Group Credentialing

Group credentialing applies to practices, whether they’re small clinics or large hospitals. If the practice doesn’t have its credentials verified by organizations, it won’t be able to receive payment for the services it renders.

Especially if you’re a nurse practitioner, you must get group credentialing as you work with an organization. In group credentialing, NPI type II issues for the practice ensure every person who works there is certified.

In group credentialing, the connection is between the practice and the insurance payer, in which the practice receives the payment for the insurance claims. Moreover, if the doctor changes jobs, they are unable to submit claims using the same practice group credentialing.

What Steps Must Be Followed During the Medical Credentialing Process?

If you want to get on board with healthcare insurance companies and receive payments faster, then you must have credentials. However, credentialing is a lengthy and complicated process, and a minor documentation error can delay it for weeks or months, leaving the provider exhausted.

That’s why you need to follow a step-by-step medical credentialing process so nothing blocks your revenue.

Step 1: Data and Document Collection

The first step in credentialing is gathering all necessary provider documents, ensuring all data is correct and valid to avoid rejections.

Here’s what documents you need to submit to insurance companies;

Medical licences
Educational documents
Employment history record
Malpractice insurance
Board certifications
Insurance coverage

Step 2: Credentialing Application Submission

Once you’ve gathered all the necessary documents required for the credentialing process, apply promptly and efficiently. Before submission, ensure everything aligns with the payer’s requirements and standards to avoid delays or rejections.

Step 3: Primary Source Verification

Now, the most critical part is the credentialing team’s verification of documents. In this step, they contact the medical boards and workspaces to determine whether the provided documents are valid. Based on the primary source verification, the insurance company decides whether you’re eligible to serve patients.

Step 4: Credentialing Committee Review

Once credentialing experts complete the primary source verification, it is forwarded to the insurance company. They review all the provided information and match it with the PSV report to ensure the healthcare professional meets the standards to provide the best possible care to patients.

Step 5: Final Approval & Ongoing Maintenance

When the credentialing committee reviews all information, and if it’s corrected, they finally approve the application. It means the provider can deliver services within the practice and get paid for each claim submitted to the insurance companies.

However, credentialing is not a one-time process. Every healthcare professional needs to revalidate their credentials in medical billing, typically every 2-3 years (depending on payer requirements).

Best Strategies for Faster and More Efficient Credentialing

To get your credentialing fast, avoid common mistakes during the process. Here are the best strategies to help you get credentialed efficiently and promptly.

Make sure that you have gathered all healthcare credentialing requirements in one place – correctly and accurately.
Don’t forget to update your CAQH profile, as many payers pull data from it.
Always ensure everything aligns with payer credentialing requirements to avoid delays.
Track, monitor, and follow up on your credentialing application continuously so you can promptly answer payer questions and streamline the credentialing process.

Final Thoughts

In short, credentialing in medical billing plays an important role in overall revenue cycle management. If the provider isn’t credentialed, they can’t be enrolled with the payer, so they can’t submit claims.

However, it’s also a complex process, and a minor mistake can lead to delays that ultimately slow down your reimbursement. By following the right credentialing steps, you can onboard with any network/payer and start your practice.

Frequently Asked Questions

What is provider credentialing in healthcare?

In healthcare billing, provider credentialing is a lengthy and complex process. It involves verifying facility members’ education, medical board licenses, employment history, training, and skills to ensure safe patient care.

What is the credentialing process?

The credentialing process is a verification of a provider’s data, including malpractice insurance, employment history, personal information, medical licenses, and board certifications. It helps ensure that the doctor meets high standards for providing services to patients and is paid for the services they render.

Does credentialing help reduce denials and improve revenue cycle management?

Yes ofcourse. In medical billing, credentialing plays an important role: if a provider doesn’t have credentials, the payer won’t pay for the patient’s treatments. Hence, proper and valid credentialing helps reduce claim denials while improving revenue cycle management.

What is Provider Enrollment and Credentialing, and how do credentialing companies help?

Provider Enrollment and Credentialing is the process of verifying a healthcare provider’s qualifications and enrolling them with insurance payers so they can bill and receive reimbursement. Medical Credentialing companies assist practices by managing documentation, verification, payer applications, and follow-ups, helping reduce delays and credentialing-related claim issues.

What are common credentialing mistakes, and how to overcome them?

The common credentialing mistakes that providers do is forget to attach important documents, an outdated CAQH profile, or expired medical licenses. To overcome these, make sure to recheck everything before submitting applications, ensuring compliance and accuracy, streamlining the medical credentialing process.

What is the difference between NPI and CAQH in credentialing?

NPI is a 10-digit unique National Provider Identification number, which is issued by the federal government to the healthcare industry, used for billing purposes. On the other hand, CAQH in credentialing stands for the Council for Affordable Quality Healthcare database setup. Through this, the provider’s information is saved and can also be updated, used by the insurance companies for the verification process during credentialing.

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