Hospital Credentialing vs Insurance Credentialing Key Differences

Hospital and insurance credentialing are two important processes for healthcare providers. While they may seem similar, both serve different purposes. Both key steps are critical for patient safety and reimbursement. In a nutshell, hospital credentialing deals with practice qualifications, while insurance credentialing approves payment facilities.   

From verifying licenses to education and background, understanding these two types of credentialing and their purposes is essential for physicians and administrators to help avoid delays, revenue loss, and compliance issues.   

Through this blog, you will learn about hospital credentialing vs insurance credentialing, the key differences of the insurance credentialing process and provider credentialing differences, medical staff credentialing, and physician credentialing requirements.    

What Is Hospital Credentialing?   

Hospital credentialing deals with verifying the qualifications of a provider, such as their education, training, licensure, and work history. This is done to make sure that the providers meet the requirements of the facility. The hospital credentialing process is coordinated by the medical staff office, where the application is reviewed, including primary-source verifications, background and malpractice history checks, as well as OIG exclusions.   

A credentialing committee, overseen by the Joint Commission standards, assesses clinical skills and specific privileges during the privileging process. This includes practices such as patient admission or procedure practice. Then, the medical executive committee or the hospital authorizes final approval, after which recredentialing must be done every two years.   

What Is Insurance Credentialing?   

Insurance credentialing, also termed payer enrollment, is the process by which providers are granted the authority to participate in insurance networks. This allows them to access reimbursements. The applications, including details related to certifications, education, background checks, malpractice history, licensure, NPI, and information related to practice, are submitted through platforms like CAQH ProView. This information is shared with the Centers for Medicare & Medicaid Services (CMS) or private payers.    

Then, the payers conduct primary source verification, committee review, and reimbursement rate contracting to ensure that providers meet quality standards and billing eligibility requirements. This process often requires multiple verifications across payers such as Medicaid and Medicare, resulting in a longer timeline.   

Key Differences Between Hospital and Insurance Credentialing 

In a nutshell, here are the key differences between hospital and medical insurance credentialing:  

Which Credentialing Should Be Done First? 

With credentialing being a complex process, figuring out which credentialing should be done first can be confusing. Between hospital credentialing and insurance credentialing, it is important to get the primary source verification done first. So, hospital credentialing should be done first. So why is hospital credentialing first? Well, that is because doing this before payer credentialing helps validate the required qualifications for the next step in the process. Requirements such as education, licensure, certifications, and malpractice history are all critical for insurance payers.   

This whole process generally takes 90-120 days, after which insurance or payer credentialing is carried out. While you must do one type of credentialing before the other, there are certain things you must be considerate of: 

• Before carrying out any credentialing process, ensure you have all the required documents and information.   

• In hospital credentialing, the documents are directly verified with the issuers, the core of the entire process.   

• After verifying the initial credentials, the Council for Affordable Quality Healthcare (CAQH) profile must be completed.  

So why should hospital credentialing be completed before insurance credentialing? It is to avoid interruptions or delays once the insurance credentialing process begins, as incomplete documentation is the primary reason for delays and rejections.   

Can You Do Both at the Same Time?   

If you are thinking about whether you can handle hospital credentialing and insurance credentialing at the same time, the answer is yes: you can do both at the same time. Although the processes have different timelines and procedures, many physicians do both at the same time to reduce overall time.   

In addition to that, both credentialing processes have overlapped verifications, such as education and licensure, so both can be pursued simultaneously. You can follow this strategy to handle the processes at the same time:   

• Use unified databases, such as the CAQH, for streamlined data submission.  

• Start the insurance application process immediately, without waiting for the approval of hospital privileges. Submit the applications as soon as a provider is chosen for insurance credentialing.   

• You can apply to multiple payers at the same time. Submitting simultaneously can speed up the enrollment process.   

• If delegated credentialing is available, make use of it.   

5 Common Mistakes Providers Make   

Providers often make mistakes that can substantially delay the credentialing process by days, even weeks. Being aware of the common mistakes providers make when it comes to hospital credentialing vs. insurance credentialing can always help streamline the process:   

Primary source verification and regulatory errors  

When it comes to verifications, even the slightest oversights can trigger delays or denials, such as failing to cross-check information with primary sources, ignoring state-specific requirements like forms and background checks, not reporting board actions or malpractice claims, and a lack of clarity on which entity needs what.   

Incomplete or inconsistent applications 

As mentioned, a lack of accurate information is the major cause of delays in credentialing. Applications must be detailed; something providers and practices often fail to understand. Submitting outdated documents like CVs with wrong dates and gaps, missing board certifications and licenses, DEA/state CDS, state licenses, etc. Another major cause of denials is inconsistent information across documents, such as different practice addresses; this can trigger rejections.   

Irregular follow-ups 

The importance of regular, rigorous follow-up in credentialing cannot be overstated. Credentialing is a lengthy process that requires physicians and practices to complete multiple steps of verification, documentation, and follow-up to avoid suspensions. Some common mistakes providers make include failing to track recredentialing cycles and missing deadlines, resulting in temporary termination and suspended privileges. A few of the other mistakes include:   

• Renewing the licenses too close to the expiry dates 

• Lack of systematic follow-up with payers and hospitals 

• Failing to track recredentialing cycles 

• Skipping CAQH re-attestation

Operational issues  

Another often-overlooked mistake is operational issues within the practice, as these can externally impact the credentialing process. While many tend to overly focus on the applications and documentation, the process is often given less focus. Issues such as a lack of a common document repository, a lack of proper ownership, and failure to train the new providers.   

Sequencing mistakes  

Sometimes, even when the documentation process is carried out meticulously, a lack of proper planning can cause revenue loss. For example, beginning the credentialing process late and too close to the provider’s intended start date can result in significant unbillable in-network visits.   

How Do Credentialing Delays Affect Revenue? 

Credentialing delays have a direct, significant impact on revenue. According to a report by Neolytix, credentialing delays can cost organizations $1,000 to $5,000 per provider per day, especially in specialties such as cardiology or orthopedics. In addition to the monetary loss, credentialing delays can result in operational halts.   

• Huge revenue loss: On average, physicians bill an average of $9,200 daily, which, in the case of a credentialing delay, can equate to a substantial loss, as in-network billing and procedure scheduling will not be permitted. In addition to the immediate revenue loss, the high-volume losses will be difficult to balance out.  

• Operational limitations: Lack of proper documentation, like licensure history and CAQH, can further add to the credentialing delay, amounting to further revenue loss.  

• Cash flow issue: Without incoming reimbursements, the cash flow to practices will be severely impacted, affecting salaries, rent, marketing costs and other related costs, resulting in emergency loans and delayed payments.  

• Denied claims: When claims are submitted before credentialing approval, they will be denied. This, in turn, can increase accounts receivable (A/R) days and administrative costs.   

• Onboarding issues: A lack of patient onboarding means no work for new hires, impacting employee morale and overall productivity.   

• Patient-access issue: Credentialing holds can negatively impact patient flow, often with competitors with proper credentialing getting the volume. In addition to that, this can also impact market share and overall growth. 

• Reputational damage: Patient trust is integral for successful service delivery in the healthcare industry. Operational issues such as these can directly impact how a service provider is perceived by patients. It can also lead to negative reviews on Google or Yelp.  

Should You Outsource Credentialing Services? 

While credentialing is something you can do yourself, outsourcing credentialing can not only save on operational costs but also on revenue loss and practice setup. Specialized firms like Credex Healthcare, which are experts in credentialing, billing, and licensing, provide comprehensive credentialing and enrollment across specialties. For busy practices, choosing a third-party service provider can often save more than $50,000 annually per practice by reducing in-house staff costs and errors and improving revenue.   

Serving over 7,000 providers nationwide, Credex Healthcare specializes in Medicare, Medicaid enrollments, commercial payers (Aetna, Cigna, UnitedHealthcare, Blue Cross), CAQH/PECOS setup, revalidations, appeals, and hospital privileges. When you choose Credex Healthcare services, you get: 

• Hospital credentialing: Credex Healthcare specializes in end-to-end hospital credentialing across all 50 states. By overseeing the rigorous processes of hospital privileges, primary source verification, and insurance enrollment (Medicare, Medicaid, and commercial plans) for physicians, nurses, and other specialists, their team of experts meticulously manages these processes.   

• Insurance credentialing: Credex Healthcare are experts in providing end-to-end insurance credentialing, enrollment, and re-credentialing services for healthcare providers across all 50 states. With a dedicated team handling the entire process, including CAQH profile management, Medicare/Medicaid enrollment, and payer negotiations for specialties, they ease the process by helping maximize your revenue.  

So, should you outsource credentialing services? Here are some key benefits so you can make an informed decision:  

• With credentialing taking 20-30 hours per provider, outsourcing can help save you time, as credentialing companies like Credex Healthcare deliver in record time.    

• Professional service providers usually charge a service fee that is recouped through the services they provide. For example, by getting faster approvals and avoiding revenue delays, Credex Healthcare streamlines the credentialing process.   

• Credex Healthcare reports a 98% first-time success rate, highlighting its leverage.   

• Experts can help reduce the number of errors substantially, with one of the best credentialing companies, like Credex Healthcare, assuring error-free submissions regularly.   

• Practices and service providers can focus on patient service, revenue cycles, and overall growth of the practice rather than running behind renewal cycles and resubmissions, which the third-party service providers can get done for you.   

FAQs 

How long does hospital credentialing take? 

Generally, the hospital credentialing process takes around 60-120 days. This includes application, verification, committee review, and hospital privilege.   

How long does insurance credentialing take? 

In most cases, insurance credentialing or provider credentialing takes 90-150 days. This can vary by the payer. Commercial plans can average between 90 and 120 days after submission.   

Is hospital credentialing required for private practice? 

No. Hospital credentialing is not required for private practice if the physician is not treating patients in a hospital setting. Private practices should focus on insurance credentialing for billing purposes, as hospital credentialing is only required for facility-based care.  

Can a provider bill insurance without credentialing? 

No. A provider cannot bill insurance without proper credentialing. For in-network reimbursement, credentialing is a must, and billing without it can result in risk of denial and penalties for fraud.  

Conclusion  

Learning about the differences between hospital credentialing and insurance credentialing is essential for healthcare providers to streamline operations and elevate overall revenue growth. It is also extremely important for compliance standards, without which any healthcare provider can face penalties and revenue delays. Although hospital or insurance credentialing can be done by yourself, the complex process is time-consuming, and even the slightest error will require the process to be started from scratch. To avoid further delays and expenses, partnering with a professional credentialing service provider or outsourcing credentialing services with partners like Credex Healthcare can reduce timelines by up to 50%, transforming potential setbacks into strategic advantages.   

Are you ready to eliminate credentialing delays and grow your practice?  Explore our medical credentialing services page today for expert guidance and tailored solutions to streamline your practice growth.