Physician Credentialing Importance In Healthcare Improvement

According to a recent survey, 26% of physicians state that patients can be potentially protected against malpractice and other medical errors with the help of physician credentialing. 

Medical or provider credentialing extends beyond the assessment of a provider’s academic achievements, it encompasses a comprehensive evaluation of their experience, clinical skills, and ethical standing.

Credentialing in medical billing is a challenging task, and to make it accountable and steer clear of potential mistakes, here is what you need to know. 

Overview of Physician Credentialing

To put it in simpler terms, credentialing in medical billing is a process through which healthcare facilities evaluate the eligibility of prospective practitioners. 

The process involves validating physicians’ certifications and licenses, confirming their work history and malpractice coverage, and assessing their education and training.

The legal authority of staff selection and overseeing the credentialing process lies with the official board of a hospital. 

Not just that, insurance providers and other healthcare facilities also utilize the medical credentialing process to verify healthcare providers including therapists, pharmacists, dentists, nurses, and physicians. 

Each time a healthcare provider switches specialties or opens a new practice, they must undergo credentialing. Physician credentialing services ensure that patients receive care from healthcare providers that meet certain standards of professionalism. 

How Does It Work?

So, exactly does provider credentialing work? It involves three stages: credentialing, privileging, and enrollment or contracting. 

Many people tend to confuse credentialing with privileging, which is an entirely different process. 

While medical billing credentialing is the evaluation of a doctor’s qualifications, privileging done at healthcare facilities and hospitals provides credentialed physicians with the authority to perform specific procedures. For example, a physician granted privilege by the hospital can perform procedures like endoscopy. 

Privileging is granted by conducting OPPE (Ongoing Professional Practice Evaluation) and FPPE, which is a more focused evaluation conducted only if there are concerns related to the physician’s practice. 

This step comes after credentialing in the provider credentialing process. The third step is contracting in physician medical billing. This entails the involvement of payers and insurance companies. 

In this step, physicians apply for participation in health insurance networks. After approval, the physician enters a legal agreement in which specific terms and reimbursement rates are settled, allowing physicians to bill for their services.

If you’re confused about how to get credentialed with insurance companies, here are some steps you can follow:

  1. Researching potential insurance providers. 
  2. Gathering mandatory documentation. 
  3. Filing a Council of Affordable Quality Healthcare application for a provider identifier. 
  4. Follow-ups and re-credentialing.


Appropriate credentials are crucial for providers to perform treatment and get reimbursement. And if a provider has been credentialed, the process does not stop there.

The medical industry is continuously evolving, and to meet certain criteria, providers undergo re-enrollment or re-credentialing every two years or so. 

Once the credentials expire, providers receive a letter entailing a re-credentialing deadline. Repetition of the same credentialing process by a medical credentialing specialist ensures that the provider’s skills are up to par.

Importance and Significant Benefits of Credentialing In Healthcare

After knowing what credentialing is in healthcare, you may still be wondering why it’s important. 

Let’s dive right into how credentialing is directly linked to healthcare improvement. 

  • Avoiding Lawsuits: It’s not uncommon for healthcare organizations to confront false claims and lawsuits. When that happens, credentialing can help protect the organization and its providers. 
  • Safeguarding Patient Wellbeing: Patient safety is one of the primary objectives of provider credentialing. Any issues in the provider’s work history are uncovered during the credentialing process.
  • Building a Reputation In the Industry: Medical credentialing also plays a critical role in preserving and shaping the reputation of a healthcare facility as it validates the qualifications of healthcare providers. 
  • Prevents Loss of Revenue: Proper physician credentialing reduces delayed reimbursements, preventing thousands of dollars worth of loss in revenue of a medical practice. 
  • Access to Patient Bases: Credentialing allows practices to boost their revenue streams by accessing more patient bases, such as patients covered under health insurance. 
  • Delivering a Competitive Edge: Qualified practitioners are more inclined to join credentialed facilities and similarly, you can enlist professional and highly skilled providers in your practice through medical billing credentialing. 

Common Physician Credentialing Mistakes 

Allocating adequate resources to properly credential each provider can be a hassle most organizations are not equipped for. Extremely lengthy credentialing processes are one of the basic causes of provider credentialing mistakes. 

With that said, here are some common credentialing mistakes on the provider’s end. 

  1. Providing inaccurate or outdated information during credentialing. 
  2. No follow-ups on re-credentialing and failure to respond to requests for additional documentation. 
  3. Submitting expired credentials. 
  4. Not disclosing issues about former work history, such as malpractice. 
  5. Failure to track expiration dates of licenses and certificates. 

On the other hand, there are also common credentialing mistakes on the staff’s end that can lead to errors. 

  1. Inaccurate data entry can lead to confusion. 
  2. Delaying provider credentials and not acquiring provider credentialing services. 
  3. Allowing providers to practice and perform treatments before credentialing is complete. 
  4. Relying on manual workflow instead of automating the credentialing process. 
  5. Not using primary source verification to avoid errors. 


What are the provider credentialing process steps?

The provider credentialing steps include researching documentation requirements, selecting insurance providers, ensuring the accuracy of the information, completing the CAQH, waiting for the insurer’s approval, follow-up, and re-certification. 

What makes credentialing in medical billing essential?

Credentialing in medical billing is essential for numerous reasons, including reduction in medical errors, streamlining the reimbursement process, compliance, maintaining professionalism, and maintaining patients’ confidence in the providers treating them.