Exploring Types of Credentialing in Healthcare

Trust is the key to running the healthcare industry. Patients have faith in physicians, hospitals, medical staff, and insurance companies because they know all people involved in providing care are of high standards. The basis of that trust is credentialing, the process of checking the qualifications of a provider in more detail to allow them to practice or receive payment. However, did you realize that there are actually many different types of medical credentialing? Knowing the types of credentialing in healthcare may seem a tough task, but they are all well-defined.

Here, we take a look at the key categories of healthcare credentialing, understand the difference between them, and know why they are important to all parties.

What is Credentialing in Healthcare?

Before we get down to the types of credentialing, it is better to define the term. Credentialing refers to the official verification of the education, training, licenses, certifications, work experience, malpractice experience, and general competency of a healthcare professional to offer care. This process is used to safeguard patients and avoid risk by hospitals, insurance panels, and government programs alike.

Consider credentialing as the gatekeeper that determines the doctor who is allowed to treat a patient and who is paid to do so.

Why are there different types of medical credentialing?

Healthcare is not a retail business. A large hospital system, a solo family physician, and a Medicare patient all have different approaches to interacting with providers. The risk, regulations, and source of payment are different, which leads to different types of credentialing in healthcare. Each of the types provides an answer to a slightly different question:

• Is this provider safe in our facility?
• Is this a provider within our insurance plan?
• Is this provider in compliance with federal or state program requirements?

So here are the key categories of medical credentialing you need to understand.

1. Initial Credentialing (Or Primary Source Verification)

What is the case when a physician or advanced practitioner is applying for the first time to receive privileges or insurance contracts? That is initial credentialing.

In primary source verification (PSV), organizations directly contact schools, residency programs, licensing boards, the National Practitioner Data Bank, and former employers. This will ensure that diplomas, licenses, board certifications, and references are authentic and up-to-date.

Initial credentialing typically lasts 60-120 days. The Council for Affordable Quality Healthcare (CAQH) reports that, on average, providers spend 21 hours per application performing initial credentialing paperwork, a massive waste of time that can be reduced by companies such as Capline Healthcare Management.

2. Hospital Privileging (Clinical Privileges)

Do you desire to admit or operate in a certain hospital? Clinical privileges are required. Another form of credentialing is handled by the hospital’s medical staff office.

Depending on training and experience, hospitals determine the kind of procedures to perform. For example, a general surgeon may be given the privilege in appendectomies but not in heart surgery. The grants are normally for two years, after which they are renewed.

3. Insurance Credentialing (Also Called Provider Enrollment or Payer Enrollment)

This is likely to be the most discussed type among private practices. Insurance credentialing places a provider under commercial contracts (Blue Cross, UnitedHealthcare, Cigna, etc.) and government contracts (Medicare, Medicaid, Tricare).

Each payer will have its application 50 or more pages long and its own deadlines. The absence of one document can postpone the payments for several months. Research suggests that practices are losing revenues of $1.5 million due to delayed or refused credentialing by insurers.

4. Re-credentialing (Or Recredentialing)

Nothing is permanent, not even your accepted position. Providers are re-credentialed every 2-3 years (depending on the organization). This quicker process verifies new malpractice claims, license sanctions, expirations, or work history lapses.

Re-credentializing ensures the data is up-to-date. Missing a re-credentialing deadline could translate to an automatic termination from a health plan and loss of revenues.

5. Delegated Credentialing

Large medical groups or Independent Practice Associations (IPAs) sometimes take over the credentialing work for health plans through delegated credentialing agreements. Initial and continuing credentialing is carried out by the group, although auditing by the payer is carried out frequently. When the group has a good system, delegated credentialing may help the providers move faster.

6. Organizational Credentialing (Facility Credentialing)

Credentialing is not only done to people but whole facilities as well. Organizational credentialing is done for all ambulatory surgery centers, imaging centers, home health agencies, and DME suppliers to be contractors with Medicare and private payers.

This type of credentialing targets licenses, accreditation (such as The Joint Commission), malpractice coverage, and compliance programs instead of individual clinicians.

Quick Comparison Table: Types of Medical Credentialing at a Glance

Type	Who Performs It	Main Focus
Initial Credentialing	Payers, hospitals, NCQA-certified bodies	Education, licenses, full background
Hospital Privileging	Hospital medical staff	Specific clinical procedures allowed
Insurance Credentialing	Health plans or delegated groups	Contract & reimbursement eligibility
Re-credentialing	Same as initial	Updates, sanctions, expirations
Delegated Credentialing	Medical group or IPA	Meets payer standards on their behalf
Organizational	Payers	Facility licenses, accreditation

Why Getting Credentialing is Important

Slow or no credentialing is a slow or no-revenue situation. A CAQH report released in 2023 estimates that the industry continues to incur costs of 2.4 billion a year on manual credentialing that could be used to provide care to patients.

The stakes keep rising. Including new telehealth policies, value-based care schemes, and tougher Medicare regulations implies increased scrutiny than ever. Even a single oversight of an out-of-date DEA license or unreported sanction can put a provider out of business on a temporary basis, months. It is precisely due to this reason that most practices now outsource the credentialing to professionals such as Capline Healthcare Management.

Conclusion

Managing the various types of medical credentialing does not necessarily consume your time and income if you outsource it. Capline processes your applications, carries expirables, re-credentials on time, and pursues verifications to ensure that you attend to patients. So contact us today!

FAQ

Q: Is medical credentialing a time-consuming process?

A: The first insurance credentialing takes 90-150 days on average. Hospital privileging usually takes shorter durations (30-90 days), whereas re-credentialing usually takes shorter periods (30-60 days).

Q: Are the same types of credentialing required for nurse practitioners and physician assistants?

A: Yes, they undergo initial insurance, re-credentialing, and privileges like the physicians, but in some states, collaborative agreements can be made in place of full independent privileges.

Q: What are the consequences of failure by a provider to re-credential?

A: A majority of health plans automatically end the contract. It makes the provider out-of-network, and claims are denied until re-credentialing is completed.

Q: Does a third-party company provide all forms of credentialing?

A: Absolutely. Longtime credentialing services handle first applications, payer enrollment, privileged packets, expirables tracking, and re-credentialing in dozens of plans simultaneously.