Healthcare Provider Credentialing Process: Complete Guide

Effective provider credentialing is fundamental to patient safety and financial stability. As a case in point, 

A study found that approximately 1% of physicians accounted for 32% of all paid malpractice claims. 

This underscores the importance of thorough credentialing to identify practitioners with repeated claims.

A strong oversight framework is essential because patient safety is paramount in healthcare. At its core is provider credentialing—a thorough process that verifies practitioners' qualifications, competence, and reliability before they deliver.

With over a million physicians in the USA and thousands more joining each year, healthcare facilities must manage an intricate web of regulations and stringent standards.

To make the process clearer and less time-consuming, we have underlined the key steps in provider credentialing in this blog post.

What Is the Healthcare Provider Credentialing Process?

The provider credentialing process flow is a multi-step procedure that hospitals and healthcare organizations use to gather and verify practitioners' qualifications to practice medicine. 

This comprehensive vetting approach examines and validates a healthcare provider's professional background, education, training, licensure, certifications, and ability to safely practice medicine.

Credentialing applies to various healthcare practitioners, including:

• Physicians
• Physician assistants
• Certified registered nurse assistants
• Advanced practice professionals
• Licensed physical therapists
• Mental health providers
• Dentists

The process is typically conducted for providers employed by healthcare organizations or those seeking affiliation—for example, community physicians applying to join a hospital's medical staff.

Insurance companies and payers also perform credentialing to determine which providers to include in their networks. 

Why Should Provider Credentialing Matter?

Credentialing is the first step for hospitals to ensure safe, quality care while protecting their staff and organization. Here's why it matters:

• Patient Safety: It ensures practitioners have the necessary qualifications and skills to provide care, reducing the risk of medical errors. In fact, strict credentialing alone cuts patient safety incidents by 25%.
• Provides Legal Protection: Helps healthcare organizations avoid negligent credentialing lawsuits, which can lead to millions in damages.
• Ensures Mandatory Regulatory Compliance: Hospitals must meet guidelines from accreditation bodies like: 
  
  • The Joint Commission (TJC)
  • DNV Health Care USA
  • NCQA (National Committee for Quality Assurance)
  • CMS (Centers for Medicare & Medicaid Services)
  • URAC (Utilization Review Accreditation Commission), 
  • AAAHC (Accreditation Association for Ambulatory Health Care)
• Promotes Efficient Reimbursement: Payers, including insurance companies and government programs, require providers to be appropriately credentialed before they can be reimbursed for their services.
• Ensures Quality Assurance: It guarantees only qualified professionals operate in healthcare systems, upholding high-quality standards.
• Improves Company Reputation: A good credentialing process helps a healthcare institution establish confidence with patients and the community.

Key Steps in Provider Credentialing Process Flow Healthcare

Though it may seem complicated, the provider credentialing process follows a step-by-step approach. Here's a breakdown:

1. Application Submission

It starts with a healthcare provider completing an application, either online or through a traditional paper process. Information includes

• Personal and demographic information
• Educational background and training history
• Work experience and employment history
• Professional references
• Specialties and patient care experience
• Licensure information
• Board certifications
• Malpractice insurance coverage

2. Information Gathering and Primary Source Verification (PSV)

PSV involves going directly to the issuer of credentials rather than relying on secondary sources that may be inaccurate or fraudulent. It typically includes verification of the following:

• Identity (government-issued identification)
• Education, residency, and fellowship training
• Board certification status
• State medical licensure
• DEA Registration and Controlled Substances Registration
• Work history and professional references
• National Practitioner Data Bank (NPDB) query for sanctions or disciplinary actions
• Professional liability coverage and claims history
• System for Award Management (SAM) status

Modern credentialing solutions automate much of this process, using advanced NCQA-compliant tools and system integrations to verify information efficiently while maintaining compliance with relevant regulations.

3. Data Analysis and Review

Following verification, credentialing professionals analyze the collected data to identify any discrepancies, gaps, or concerns that might affect the provider's application. This step often involves:

• Cross-referencing information from multiple sources
• Criminal background checks and searches of the National Practitioner Data Bank (NPDB)
• Identifying potential red flags in the provider's history
• Making sure all documentation is complete and up-to-date
• Preparing comprehensive reports for decision-makers

In some cases, a peer review process is followed, where other healthcare professionals in the same field evaluate the applicant's qualifications and experience.

4. Credentialing Committee Review

The verified information is then presented to the appropriate decision-making bodies, which may include:

• Credentialing Committee
• Medical Executive Committee
• Hospital governing board

The members typically comprise physicians, administrators, and other healthcare professionals. They assess provider qualifications and decide on approval, denial, or the need for more information.

5. Enrolment with Insurance Networks

Providers must also be enrolled with relevant insurance networks for billing purposes. This process often runs parallel to organizational credentialing and comprises:

• Submitting provider information to payers
• Completing payer-specific applications

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6. Ongoing Monitoring and Recredentialing

Credentialing is not a one-time event but an ongoing process. Providers typically undergo re-credentialing every two to three years to ensure continued compliance with organizational and regulatory standards. 

Between formal re-credentialing cycles, continuous monitoring tracks:

• License renewals and expirations
• Sanctions or disciplinary actions
• Changes in board certification status
• Malpractice claims

How to Optimize the Credentialing Process Flow in Your Organization

The credentialing process is generally time-consuming and resource-intensive, even more so for large healthcare organizations. 

However, there are ways to streamline the process and improve efficiency:

• Cloud-Based, Automated Credentialing Systems: Modern credentialing platforms integrate automation, cloud accessibility, and centralized management to streamline the entire provider lifecycle from application to privileging and enrollment. These systems reduce manual tasks, eliminate redundancies, and enhance collaboration across stakeholders.
• Data Integration: Systems that connect credentialing data with other healthcare operations, ensuring consistency across departments.
• Standardization: Developing standardized policies and procedures for credentialing to ensure consistency and compliance across the organization.
• Staff Training and Audits: Regular training sessions to keep credentialing teams updated on evolving regulations, along with internal audits to identify gaps and ensure compliance.
• Outsourcing Options: Partnering with credentialing experts like HOM can offload administrative burdens from the provider’s office while ensuring compliance and efficiency. This allows healthcare providers to focus on patient care instead of complex credentialing tasks.

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Final Thoughts

Credentialing errors disrupt revenue cycle management and compromise trust, contributing to a significant portion of the 48.3 million annual USA claim denials—16.6% of all in-network claims.

Provider credentialing, which involves collecting and reviewing extensive data to verify qualifications, is crucial for delivering safe, high-quality care and preventing costly errors for providers.

Outsourcing the provider credentialing process flow to a trusted AI-driven cloud solution partner like HOM RCM offers numerous advantages to healthcare organizations. 

While automation ensures speed and accuracy, our vetted credentialing experts oversee complex cases, resolving discrepancies and ensuring compliance with evolving regulations. This means an added layer of oversight, offering providers confidence in the process.

To note, HOM's data-driven provider credentialing and contracting solution achieves an impressive 99.8% accuracy rate, contributing to one of the industry's highest first-pass claim approval ratios. 

The company boasts over 100 years of cumulative experience and has served over 500 providers. Our services also include:

• Generation of Type 1 and Type 2 National Provider Identifiers (NPIs).
• Medicare and Medicaid credentialing.
• Creation and maintenance of CAQH (Council for Affordable Quality Healthcare) profiles.
• Assistance with hospital privileges and periodic renewal of medical and DEA licenses.

HOM deeply understands state-specific regulations and nuances and utilizes NCQA-compliant tools to collate and analyze data efficiently.

Request a free audit today to understand how we can optimize your provider credentialing process flow and improve your organization's efficiency.

You can also reach out to us here.