What Is Credentialing in Healthcare? Simplified for Clinicians and Teams

What Is Credentialing in Healthcare?

Credentialing, in healthcare, is the process of verifying that a clinician is qualified and competent to provide care.

In essence, credentialing confirms that clinicians are who they claim to be in their résumés. It involves a thorough background check of education, licensure, board certifications, malpractice history, and professional affiliations.

For example, when a new clinician joins a practice, the respective credentialing committee or department will go beyond just verifying their active license. They will also check their medical school degree, residency completion, malpractice history, outstanding disciplinary actions, and other key factors.

Although tedious, this process ensures that healthcare professionals meet the standards set by insurance companies, regulatory bodies, and healthcare facilities.

How Long Does the Credentialing Process Take?

Most credentialing processes take between three and six months. Timelines may vary depending on several factors, such as how responsive third parties are and the amount of information to be checked. Credentialing is, in most cases, a slow process.

A common bottleneck is missing paperwork, even if it’s as simple as an unsigned form from months ago. On top of those last-minute surprises, manual systems can slow things down further, as staff often have to chase down needed information by phone or fax.

Picture a newly hired nurse whose paperwork sits in limbo because she’s missing documents from her medical school. Those small gaps, although meaningless at first, can domino into a stagnated process that keeps medical staff out of the practice. 

H2Why It Matters for Physicians and Practices

Credentialing is about safety and trust. But what is provider credentialing in healthcare​ for the people involved?

From a patient safety point of view, credentialing offers reassurance that each and every clinician has been thoroughly vetted for their capabilities. This means professionals whom patients can rely on without worrying about malpractice.

For practices, proper credentialing and contracting are essential to meet regulatory requirements and avoid penalties. Yet, the process goes beyond compliance: effective credentialing means new hires can be onboarded smoothly without long gaps after an initial employment offer.

Financially, the stakes are high — although often overlooked. Delays or errors in credentialing create gaps in billing, which can snowball into denied claims and unpaid services. Margins are thin for all practices, so streamlining credentialing processes protects both the center's patients and financial bottom line.

Can Credentialing Errors Really Stop You From Billing?

Yes, credentialing errors can indeed stop you from billing. Payers won’t reimburse services provided by professionals who aren’t credentialed in their network, even if the services were delivered correctly.

Although this may seem obvious at first, preventing these errors involves ensuring correct data entry, complete documentation, regulatory compliance, and periodic re-credentialing.

Credentialing errors, even if they are later corrected, can lead to slow reimbursements and delayed revenue cycles. In some cases, they may even result in denied claims (such as a CO-59 denial code) and write-offs.

Credentialing vs. Privileging vs. Payer Enrollment: What’s the Difference?

What is the credentialing process in healthcare​ compared to privileging and payer enrollment? Although they sound pretty similar at first, there are some key differences that you need to understand — no matter if you're looking to start a medical billing company or improve your practice's operations.

Credentialing, essentially, checks if you’re legit. It involves verifying your education, licensure, background, and work history.

Privileging defines what you can and can’t do in a facility or care center. For example, you may be allowed to perform specific surgeries but not lead other procedures.

Finally, payer enrollment gets you paid. It means linking your credentials to insurance networks so claims can be correctly processed in time.

Think of credentialing as the centerpiece in these processes. Without it, privileging and payer enrollment just can’t happen, as the provider hasn’t verified who you actually are. 

How Credentialing Feeds Into the Revenue Cycle

The link between the two may seem a bit far-fetched, but when credentialing goes wrong, your revenue cycle gets stuck.

Until a clinician is fully credentialed and enrolled with each payer, billing is effectively blocked. The provider simply isn’t on file, so claims will be rejected very early in the process during claim scrubbing or denied by the plan later on. Services rendered during this gap often have to be resubmitted later, and are sometimes at risk of being written off.

Take, for example, a clinician who’s seeing patients without being fully enrolled with payers. As months and completed visits pile up, the practice can unknowingly generate dozens, if not hundreds, of uncompensated services.

Each denial and delay in each of these services can create a massive headache for administrative teams juggling an already tight cash flow. Each day without proper credentialing adds workload for the future and risks losing even more income.

3 Proven Tips To Keep Credentialing on Track

Organization is crucial to prevent credentialing from becoming a maze. 

It all starts with how you compile the necessary documents. Try to keep paperwork organized from the start, building clear requirements for each and every case. Diplomas, licenses, malpractice, work history, and all other aspects should be present the moment a new clinician is hired. Verify dates and typos across forms, and store digital copies as soon as possible.

Next, ensure your team is using credentialing software to manage incoming clinicians and re-credentialing. Checklists, status dashboards, autofill forms, and other digital tools go a long way in reducing back-and-forth between departments.

Finally, make reminders a fundamental part of your process by building a credential calendar. Track expirables (such as certifications or registrations) and deliver alerts at least 90 days in advance to accelerate re-credentialing and the onboarding of new hires. Keep an audit log of what was renewed and when, and ensure future billings can go smoothly.

How Puredi Helps You Rapidly Credential and Bill

At PUREDI, we firmly believe that provider credentialing is the foundation for effective hospital and physician billing. Our credentialing and contracting service is built to simplify the process for healthcare providers.

Our practice management solutions help care centers set up notifications for expiring documents and show gaps in information via clear analytics while being seamlessly integrated with billing workflows.

With PUREDI, teams can spend more time focusing on patients instead of on financial headaches. Request a demo with our team to find out how you can streamline credentialing and billing in your practice.