What's the Difference Between Credentialing and Contracting a Provider?

For medical professionals, questions about population growth can impact the overall clinical care that you’re able to provide and your ability to leverage technology effectively in treating patients. Improved health care means an increased population. For instance, life expectancy has increased by as much as 60 percent in countries with greater access to health care. While the same population shows a sharp decrease in childhood mortality. 

There are many factors in place that contribute to these statistics, which include social changes, better access to care, and higher economic means for the population. However, technology and education are among the leading contributors to these positive outcomes. When patients understand their medical needs, they are more equipped to make informed decisions to improve outcomes. With better outcomes across all age brackets, life expectancy increases while infant and childhood mortality decrease.

Improved health care correlates to increased population growth. However, many experts agree that overpopulation can lead to public health concerns, as well as heightened concerns for the environment. The impact of population growth is something that each practice and provider should consider, as it impacts both public health and population health.

What Is Provider Credentialing?

Provider credentialing is the process that health insurance companies and payers like Medicare and Medicaid go through to verify a provider. This process can be rather lengthy, taking as much as three months. It includes verifying the provider’s background, their licensing, certifications, work experience, and liability coverage. Provider credentialing also includes verifying that the provider is licensed in the state and their standing with all regulatory bodies and board certifications.

For practices and healthcare organizations, each physician and provider needs to finalize the credentialing process in order to work at the facility. This is one reason we recommend that new practices start the credentialing process prior to the time they plan to open.

There are a few steps involved in the credentialing process. First, the organization needs to gather all of the documentation required for the payer. Then the provider will need to submit this information to the payer in the format that they require.
The next step is the verification process. The payer will verify that all of the information is accurate. This is the most time-consuming part of the process and errors in documentation can result in being declined and having to start the process over. So it’s important that all information is verified and checked before submitting it.

The next step is being verified. Though you may have to follow up with the insurer to speed up the verification process. Once your providers are verified, you need to note how long the credentialing is valid so that you can schedule the recertification process for that payer.

What Is Provider Enrollment?

Credentialing is all about checking the provider’s background and verifying their credentials. Provider enrollment is the next step of the process. Enrollment is how you formally request to participate in a health insurance or payer network. Payer enrollment for your organization includes compiling all of the information on the various insurers, deciding which insurers you’d like to enroll with, providing all documentation that each payer needs, and negotiating the contracts.
Enrollment is crucial for organizations because many patients will only see physicians within their network. Billing out-of-network is also time-consuming and can make medical billing more difficult for the organization, as well as the patient.

Enrollment is a key part of the process before seeing patients and we do not recommend seeing patients before this step is completed. Payers will not guarantee reimbursement for services rendered prior to enrollment.

What Is the Difference Between Credentialing and Contracting?

Where credentialing is a comprehensive background check on the provider, contracting is the process of signing the contract to become a part of the insurer’s network. The contract is signed by both the payer and the provider and all of the terms and conditions are listed. Each payer has their own specific contract, so it’s important to verify each point and make sure that you understand the responsibilities and obligations prior to signing.

During the contracting process, your organization will negotiate reimbursement rates. Every payer is different, so you do need to verify what their rates are for services and you can negotiate these points. Once the contracting phase is completed, you’ll be able to see patients and submit claims to that payer.

What Is an NPI Number?

The NPI number is the National Provider Identifier number. This is the formal number used by the Department of Health and Human Services and the US Centers for Medicare and Medicaid to identify the provider and group. This is an assigned number that does not change.

The provider will keep their NPI permanently and it will stay with them if they change healthcare organizations throughout their career. The provider’s number is part of their professional identification and is attached to their own credentials and social security information. The provider number is a Type 1 NPI.

There is also an NPI number to identify a business or healthcare organization. These are Type 2 NPI numbers and one business may have a single NPI number or several. An organization’s NPI numbers are connected to their business information, such as Tax Identification Number, Business Name, Type of entity, etc.

What Is CAQH?

The Council for Affordable Quality Healthcare is usually referred to as CAQH. This is a database that makes it much easier for payers and providers by keeping all of the credentialing information located in one place.

This makes the process much easier because providers can complete the information once, and each payer can have access to that same information for verification. This saves time and reduces errors that were once manually typed or filled out for each individual payer, every time a provider needed to certify or re-certify.

How Do I Get Started With Contracting and Credentialing With Payers?

We’d recommend contracting with a credentialing service for your opening few months or year. They have a wealth of experience and can streamline the process for you while you concentrate on building the practice. If you’re handling the process on your own, make sure that you verify and double check all information before submitting it because errors, even typos, can cost a lot of time.

If you are going to do the contracting and credentialing process in house, we recommend spending some time researching each payer and contract negotiations ahead of time. You’ll be negotiating your own contracts, so you want to be as knowledgeable as possible before entering into any contracts.

Can I Make the Credentialing Process Faster?

There are a few things that you can do to speed up the credentialing process. The first is to verify all information prior to submitting it. The biggest thing that stalls the process is incorrect or incomplete information. Make sure that your CAQH information is correct, updated, and complete, because this is one of the methods your payers will be using to verify it.

You should also make sure that all of your licenses and information are still current. Not updating this information can lead to a much longer process. Overall, be proactive in the information included. For instance, make sure you include explanations for any gaps in work history.

Key Takeaways

  • Credentialing is the process that the payer takes to verify each physician and caregiver.
  • Contracting is the process of verifying a healthcare organization and bringing it into the payer’s network.
  • Enrollment is how you formally request to participate in a health insurance or payer network.
  • CAQH is a database that makes it easier for payers and providers by keeping all of the credentialing information located in one place.