What’s the Difference Between Credentialing & Contracting?

How Private Practices Can Simplify Navigating Through Insurance Networks

So, you've decided to start your private practice and are ready to start seeing patients. Now it's time to get credentialed and complete contracting with insurance payers!  

But what's the difference between credentialing and contracting? What do you have to do, and how long will it take? What resources will you need to complete these processes?

A lot of providers often use these terms interchangeably, but credentialing and contracting are in fact two separate processes.

Here’s what you need to know:

What Is Credentialing?  

Credentialing is the process of proving you are who you say you are. This process involves submitting items such as your licenses, references, diplomas, and identification.  

This is the first step in establishing a relationship with a payer. They won't proceed with business transactions with you until they have a clear understanding of who you are. This process varies widely by payer but can take as long as 6 months. You should start this process right away if you're planning to transition to private practice.  

Are you already a part of a group practice that accepts the insurance you want to accept in private practice? If so, you likely already have credentials with that payer and can proceed to contracting.  

What Is Contracting?  

Contracting is the process of becoming "in network" or a "participating provider" with an insurance payer. In this process, you receive a contract for participation from an insurance company once they credential you. You'll then review the contract for details such as reimbursement rates and provider expectations.  

While contracting limits patient charges to the contracted rate, it can still secure referrals since patients seek "in network" providers. This process also varies widely on completion time. However, a provider can still bill as an "out of network" provider while waiting for the completion of contracting.  

But depending on the patient’s insurance, out of network coverage and reimbursement rates can vary widely.

In fact, some patients' plans will deny claims filed by an out of network provider.  

The Tools Needed to Prepare  

When preparing for contracting and credentialing, it's important to have primary source documents including your diploma, state license, and copies of malpractice insurance. You'll also want to update your CAQH online profile.  

CAQH stands for Council for Affordable Quality Healthcare. It includes an online profile where you can store your credentialing information and grant permission to insurance payers to access your profile. This allows you to streamline the overall credentialing process. Remember to keep it updated regularly to reflect your most accurate information.  

Final Thoughts  

And there you have it! Credentialing and contracting are two distinct but equally important processes in private practice, especially if you plan to accept insurance. They can be complex and time-consuming, but with the right tools, you can simplify these processes.

Feeling overwhelmed or unsure where to start with credentialing and contracting? Let PracticeQ be your guide. Its comprehensive practice management platform, designed for healthcare professionals, streamlines these processes by managing and organizing crucial documentation and automating necessary steps, making your journey smoother and more efficient.

Discover how PracticeQ can help you focus more on patient care and less on paperwork. Book a demo today and see the difference it can make in your practice.

About the Author

Holly Skinner is the founder of Skinner Solutions, a healthcare administration agency specializing in providing quality support for private practices. With a Master of Healthcare Administration from the University of Arkansas for Medical Sciences and extensive experience in clinic management and quality improvement, Holly brings a wealth of knowledge to healthcare providers. From clinic management to credentialing, Holly and her team help providers balance their professional and personal lives, so they can focus on what they do best: caring for patients.