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What is Credentialing in a Healthcare Setting?

CREDENTIALING. That word captures lots of processes. But most people think of credentialing in terms of vetting providers before they can touch your patients in a hospital or group practice, or vetting members of a managed care organization, the insurer or payer. What entails the vetting? Vetting or credentialing are the steps taken to determine whether the provider is qualified and competent to provide healthcare services. In other words, it is your legal responsibility to determine that the provider or practitioner is who they say they are and can do what they say they can do when it comes to treating patients.


The process of credentialing includes collecting applications and relevant documentation to support a provider's eligibility. After you or your team have obtained information such as licensure, ability to prescribe controlled substances, insurance coverage, education, training, and work history, it is the healthcare organization's responsibility to verify and then establish tracking of this data. In addition, your credentialing team must adhere to the organization’s internal requirements outlined in its Bylaws, Rules and Regulations, or policies and procedures. And those documents should detail how to meet any regulatory or accrediting agency requirements that perform oversight of the type of services your organization provides.


So, what is the importance of credentialing? Healthcare organizations could not exist without providers, whether they are doctors, advanced practice professionals, like nurse practitioners, physician assistants, psychologists, and other licensed practitioners. That is why it is imperative that you should invest much-needed resources into this process in an ongoing manner. Credentialing may not be an income producing function, but it affects revenue, and revenue generation is heavily affected by it. Don’t wait to discover that fact. A provider must be fully credentialed before they can be added or enrolled to a payer contract. No credentials. No pay for services. No pay. No revenue.

Generating Revenue

Credentialing covers many processes and points back to the ability of the provider to generate revenue. For instance, it may depend on your type of healthcare organization and how it affects revenue.

Let's start with hospitals and even group practices. What can the provider do in those venues? That will be based upon training, education, certification, or surgical logs that can support the provider's privileges. Now, I am not talking about perks, if you are not familiar with that term. I am referring to what procedures and diagnoses they can competently perform in that type of setting. For instance, a heart surgeon wants to come on board, but the hospital doesn't have the equipment. So, your hospital could not grant that surgeon that privilege.

What about an insurer or payer, the other terms referencing managed care organizations? Most likely, your providers will be listed in a directory allowing their members to choose their appropriate specialist, such as a primary care physician under internal medicine, family practice or gynecology. The providers must have the proper credentials to be listed under their specialties. Payers can even credential whole facilities, such as an urgent care facility or a dialysis group, where those facilities would have like providers that the facility is credentialing individually. But, in this case, the members would choose that facility and not a specific doctor contracted with the payer. In either case, it is the provider generating the revenue, so they must be credentialed according to their confirmed competency and qualifications, whether it is an individual practitioner or a provider facility.


No matter the healthcare organization type, who is watching them to measure and evaluate their performance? Perhaps that lies in a Quality Management Department. This is how the branches on the credentialing tree begin to grow. For example, your organization may continuously evaluate providers on the number of procedures performed or patient complaints received. If there were any, were they related to the office setting, or to the practitioner's behavior or performance? How is that resolved? That may fall under another branch, or a sub-branch, of Quality related to Performance Monitoring or Performance Evaluation or even Peer Review.

The tree continues to grow as the branches develop. Oversight of credentialing falls upon individuals who have clinical expertise and who can effectively evaluate whether the staff will join and then be retained on staff, which requires a chief medical officer, department chiefs and a Credentialing Committee.

Bringing It All Together

However, the structure is even more complex because of the need to generate revenue; this process would also fall under a Chief Operating Officer to help ensure everything is entirely connected. But it starts in another branch, Human Resources or Provider Relations, with tasks like recruiting, onboarding, and retaining appropriate staff that must meet the organization's credentialing requirements before officially being considered an affiliate, an employee, volunteer, or contractor -- whatever the organization’s relationship type.

Other activities will occur inside your credentialing department. There will need to be ongoing monitoring to make sure the providers you have accepted have not lost their licenses, certifications, or have not shown up on exclusions or sanctions lists. In some organizations, the credentialing staff or a sister department, like provider enrollment, applies for or renews licenses, Medicaid and Medicare numbers, prescriptive registrations, and more on behalf of the providers.

These aren't all the branches. Far from it. You can’t forget data management, for instance, or billing. However, your organization will not look like any other organization. Every healthcare system is as unique as human personalities, but there must be an infrastructure surrounding credentialing. These are examples. I bring all of these to your attention because when you take on the responsibility of credentialing, do not do it with blinders. Be aware, there is more to the process than collecting and verifying data. Remember, oversight is critical. Those practitioners you are vetting are crucial to generating revenue, and so is the team responsible for making sure they are qualified and competent to represent you.

Brought to you by: Dilsa Bailey, CPMSM, CEO and Sr. Consultant at The Right Credentials Network.

The Right Credentials Network offers to consult and contract services to healthcare organizations that must credential and enroll their practitioners. This article is meant to help organizations, their leaders, and credentialing teams better understand the nuances of credentialing operations. Please follow The Right Credentials Network to get the latest news on LinkedIn. Or visit us at, or on Facebook @therightcredentials.


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