October 5, 2021

The Difference between Provider Credentialing, Provider Enrollment, and Provider Contracting

Provider credentialing, provider enrollment, and provider contracting are essential processes for private medical practice. They are also frequently confused or misunderstood. As providers focus more on revenue and compliance, understanding these terms and concepts is a must.

Provider Credentialing, Provider Enrollment, and Provider Contracting: What Do They All Mean?

Provider credentialing, provider enrollment, and provider contracting are different aspects of healthcare administration. Chiefly, they are concerned with ensuring that staff is credentialed and "in-network." However, they are also vital to ensuring steady revenue streams.

 This article will define each term, explain their differences, and look at why they are essential for any private practice.

What is Provider Credentialing?



There is a perception that the provider and patient relationship is one-on-one. However, behind the scenes, there is lots of work happening to ensure that patients get the best treatment. One part of this is provider credentialing. Practices use credentialing to vet their provider's backgrounds and qualifications to confirm their suitability for their role.

Medical practices need provider credentialing to grant clinical privileges to their providers. Organizations must follow this process so that their providers can perform anything like:

 ●    A patient history

●    A physical

●    Prescribe drugs to a patient in a hospital setting

●    Perform surgery

Provider credentialing is a multi-stage process that healthcare providers use to both gather and then verify a practitioner's medical qualifications. It is required for practitioners that are employed by and affiliated with an organization.

Additionally, insurance companies and managed care companies also carry out provider credentialing. They can conduct these checks within the healthcare system or independently.

What Is The Provider Credentialing System Process?

Provider credentialing happens in steps that are completed by either the:

●    Provider organizations credentialing department

●    Payor's credentialing department

●    An internal credentialing verification organization (CVO)

●    A third-party CVO

Credentialing staff perform several duties to ensure the provider can give safe, high-quality healthcare.

Step #1:

They gather information and documents from a wide range of sources, including from the prospective provider. The data and documents required are relatively standardized, although there is some variance depending on regulatory or accreditation bodies.

Step #2:

Any documents collected are subject to primary source verification (PSV). This step requires documents to be assessed as legitimate and accurate.

Step #3:

From here, the credentialing staff analyzes the documents to find any problems. There is a wide range of things they look out for, such as:

●    Missing documents

●    A providers hesitancy to grant permissions to contact past employers

●    Past loss or limitation of clinical privileges

●    Frequent changes in employment

●    Past claims of professional liability actions that have gone against the provider

Step #4:

With all the information and check completed, credentialing staff can recommend clinical privileges or enrollment with payers.

Why is Provider Credentialing Required?

Provider credentialing is essential for several reasons. Firstly, it helps ensure that patients get safe and responsible healthcare.

Secondly, it means that staff can work in a safe, professional setting. Providing an excellent healthcare environment begins with provider credentialing. This atmosphere is vital for patients, clinicians, and other healthcare staff. To ensure each provider contributes to this environment, credentialing checks are necessary.

It's also worth noting that providers must be re-credentialed roughly every two years. During this period, the provider's performance data is collected regularly. This data is used to inform future appraisals.

If a private practice or a hospital doesn't have a credentialing process, it could reduce patient and staff safety. These scenarios could result in significant legal issues.

Summary of Provider Credentialing

Each healthcare organization must deliver the best quality and safest healthcare possible. Additionally, they are obliged to protect both staff and patients. Provider credentialing helps achieve this goal by collecting documents and character references.

By following this process, organizations can ensure their patients are in the hands of thoroughly vetted and qualified professionals.

What Is Provider Enrollment?

 Provider enrollment also called payor enrollment is the process of requesting access to participate in a health insurance network as a provider. There are many benefits to this for providers, such as gaining access to insurance plans provider panels.

In a commercial insurance network, provider enrollment is a two-part process.

#Step 1: Credentialing

To apply to the network, providers need to send in a participation request. Each health plan has different criteria. Some have a personal credentialing application, while others accept a standardized state credential application. Others still require application through the Council for Affordable Quality Healthcare (CAQH).

Once the health plan gets the provider enrollment application, they begin the credentialing process. This process is an exhaustive check of the provider's documents, qualifications, and references.

Once the credentials have been verified, a credentialing file is sent to the Credentialing Committee for endorsement. Approval of the documents can take up to 90 days. Once the Credentialing Committee signs off on approval, the contracting process begins.

#Step 2: Contracting

Once the provider has passed the credentialing stage, they are given a contract for participation in the health plan. Contracting is distinct from the credentialing process. The majority of commercial insurance networks have different departments that deal with the contracting phase.

The provider enrollment contracting phase is an opportunity for the provider to review:

●    Payment rates

●    The contract itself

●    What responsibilities are expected from participants

If everything is in order, the provider can then sign their agreement. Additionally, providers can discuss reimbursement rates during this stage. Depending on several factors like location and expertise, the standard payment rates could fall below their expectations.

Once the agreement is signed and sent to the network, providers are given two things. Firstly, they get the date when their participation in the health plan becomes active. Secondly, they receive a provider number. Once the provider has these details, they can bill the healthcare plan and receive the "in-network" payments.

Typically, the provider enrollment takes between 30-45 days. This period does not include the up to 90 days it takes for provider credentialing.

Provider Enrollment in Government Healthcare Programs

Provider enrollment in government healthcare programs has some differences. Examples of these programs are Medicare, Tricare, Medicaid, and so on.

Government health programs have standardized forms. They must be completed and filed with a designated intermediary that administers the program in the relevant jurisdiction.

For example, Medicare has a reasonably strict enrollment process. The process is comprehensively explained on the Centres for Medicare and Medicaid website, but some of the main requirements are:

1) The provider needs a primary place of service, either operational or in the final stages of preparation

2) Provides must declare personal details of each stakeholder in their practice

3) Providers must give banking information to set up an electronic fund transfer for Medicare reimbursement.

4) Providers born outside the U.S. must provide citizenships documents

5) Providers educated outside the U.S. must provide an Education Commission for Foreign Medical Graduates (ECFMG) certificate.

Medicare enrollment is complex and detailed. As a result, many applications use parties or services with Medicare enrollment experience to review their application.

What is Provider Contracting?


As mentioned above, provider contracting is one of the phases involved in provider enrollment. This contract represents the business relationship between a provider and a payor, e.g., the medical health plan or insurance company.

The provider can be an individual doctor with a private practice or a healthcare facility with several clinicians. The provider gives medical care to patients, while the payor is the healthcare or insurance company. Typically, payors pay the costs of the patient's medical services.

A provider contract is essential for health care providers who want a steady flow of patients and secured revenue. However, these contracts come in many forms. As a result, providers need to pay careful attention to wordings, clauses, and stipulations.

Why Provider Contracts are Necessary

Insurers or health plans can send a private practice a steady stream of patients. However, to receive reimbursement for their services, providers need a provider contract. These contracts stipulate what information doctors need to collect from their patients before requesting payment from the payor. Failure to follow the procedure can lead to payments being delayed or even declined.

Clauses to Watch For in Provider Contracts

Providers need to read their provider contracts carefully. Doing this will save them from issues that can harm their practice.

Providers should look out for two issues in particular.

1) Credentialing and Licensure Requirements

Some payors contract dictates that the health care facility will lose it's agreement if a single doctors license is revoked or suspended. For facilities with multiple physicians, this is far from ideal. Providers should look for contacts that don't punish them for their colleague's mistakes. As a side point, this underlines the importance of a thorough provider credentialing process.

2) Indemnification Clause

An indemnification close — also known as a hold harmless clause — states that one (or both) parties cannot hold the other responsible for either financial or legal liability. Some payors include these clauses to move liability from themselves and on to the provider. For providers, a mutual clause that shares liability is typically preferable.

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