Medical Credentialing for New Practice Owners: What You Must Know

Planning on starting a new practice? Beginning your own clinic is exciting, with you taking one step closer to delivering exceptional patient service and care. While the journey is one without many challenges, the most important one is getting your credentialing done.   

To establish direct patient relationships and business equity, medical credentialing for new practice owners is a must. If not done on time, a delayed credentialing process can not only delay your initial insurance reimbursement but also your revenue growth. Naturally, the next step is to learn about the process and everything related to it so you can begin your practice seamlessly.   

If you are a solo practitioner, specialist, or a group, once you are done with this blog, you will know all about how to start credentialing a new practice, insurance credentialing for a new practice, provider enrollment for a new clinic, credentialing checklist for doctors, and credentialing timeline for a new practice.   

Why Is Credentialing Critical Before Seeing Patients? 

Before we get into the details of the credentialing process, let us tell you why credentialing is critical before seeing patients. Credentialing is not an optional paperwork required for running a practice legally, whether you are a group-run service, a solo practitioner, or a healthcare specialist. It is one of the critical steps you must take to receive patient revenue from insurance payers.   

When you are credentialed, insurance payers know you are licensed and experienced, proving to be less risky. Credentialing acts as the eligibility proof that you are “eligible” to treat people. And in case you treat insured people before medical credentialing is fully complete, the risk of denials, delayed A/R, appeals, rebilling, and rework increases.   

Some of the common issues pertaining to not getting medical credentialing done are: 

• Revenue delays: For new practices, the credentialing lag alone can come up to 90 days in accounts receivable (A/R) per revenue cycle. If claims are submitted before paneling will be rejected, citing a non-participating provider, which then adds to rebilling or write-offs in some cases, which can account for a significant portion of the revenue.   

• Insurance reimbursement rejections: A mismatch with the NPI or an expired license can trigger denials not only with one payer but with multiple payers. For example, private providers like UnitedHealthcare or Aetna, with strict regulations, can suspend apps for missing CAQH documentation.   

• Compliance risks: One of the non-negotiables in medical credentialing, compliance is critical. The Centers for Medicare & Medicaid Services (CMS) directs providers to enroll in PECOS to avoid audits, large fines, or even termination of enrollment.  

Step-by-Step Credentialing Process for New Practice   

Now that you are aware of why medical credentialing for new practice owners is critical, let us explore how to start credentialing a new practice.  

Step 1: NPI (National Provider Identifier) 

The first step in a medical credentialing checklist for doctors and other healthcare providers is obtaining a Type 1 (individual) NPI, depending on the provider type (individual, organization, etc.). Meanwhile, groups may need a Type 2 NPI. To get the NPI, apply through the NPPES (National Plan and Provider Enumeration System) at npiregistry.cms.hhs.gov. This is a free process that does not require any fees and processes the application in 10 to 20 business days, whereas the paper route can take longer.   

Step 2: Register and Build CAQH ProView Profile 

CAQH (Council for Affordable Quality Healthcare) is the center/data hub from where the majority of the payers obtain data. Create a free profile at caqh.org and upload the necessary information, like: 

• Demographics such as your name, NPI, TIN, addresses, etc.  

• Licenses and DEA  

• Malpractice history 

• 5-year work history  

• Education/hospital background and history  

The above documents must be re-attested every 120 days to keep them active, avoid delays, and avoid “expired status,” which can halt payments. For Illinois providers, re-attestation is required every 180 days. 

Step 3: Apply for Medicare Enrollment 

PECOS is the online system used for Medicare provider enrollment. So, if you are planning on billing Medicare, submit CMS-855I (for solo/group through 855B) through PECOS (pecos.cms.hhs.gov). Begin the enrollment process early if it is integral to the payers, as it is a time-consuming process. The processing time is generally 30-100 days, and longer if additional steps like fingerprinting and background checks are required.   

Step 4: Apply to Private Insurance Panels 

For payer credentialing and contracting, apply to private insurance panels such as Aetna, Cigna, or UnitedHealthcare. All these commercial payers have their own workflow and timelines, where the provider’s information is mostly pulled from CAQH. But in some cases, they will demand payer-specific forms, new submissions, background checks, etc. Therefore, even if the CAQH is completed, you are still not authorized by the payers.   

Step 5: Secure Hospital Privileging 

This step is specific to specialties; that is, if your process is directly related to hospital admissions and procedures, privileging must be done parallel to credentialing and mostly requires similar documentation. If this is a required step, begin this one early to avoid delays.  

Credentialing Checklist for New Practice Owners 

Here is a credentialing checklist for new practice owners; this can help any healthcare provider streamline the process and maintain a credentialing checklist for doctors. 

Provider Identity and Registration 

• Individual NPI (Type 1): Apply via NPPES  

•  Organization NPI (Type 2):  If billing is under a group/clinic name  

•  Federal Tax ID (EIN): Matches legal entity on W-9  

•  W-9 form updated with current practice address and TIN  

•  Practice locations, all details consistent across all platforms

Licensure and DEA 

• Active state medical license 

• DEA certificate 

• State-controlled substance registration 

• CLIA Certificate, if performing lab tests in the office  

• Specialty Board Certification

Education and Training 

• Medical school diploma 

• Internship documentation 

• Residency certificates 

• Fellowship certificates 

• CME certificates

Work history and References  

• Five-year work history  

• Employer name and address  

• Position title and responsibilities 

• Supervisor name and contact  

• Start and end dates 

• Professional gap explanations  

• 3-5 peer references  

• Hospital privileges

CAQH ProView Profile   

• CAQH profile created 

• All sections completed  

• Supporting documents uploaded 

• Initial attestation completed  

• Re-attestation schedule set 

Disclosures and Background   

• OIG exclusion check  

• SAM.gov exclusion check 

• NPDB self-query  

• Malpractice claims history 

• Any license actions restrictions or investigations  

• Medicare/Medicaid sanctions  

• Criminal background 

Insurance and Liability Coverage   

• Malpractice Insurance Policy  

• Coverage limits  

• Carrier name and contact  

• Effective and expiration dates  

• Claims-made vs. occurrence type  

• General Liability Insurance for practice premises

Medicare Enrollment (if applicable)  

• Completed PECOS account 

• Pay the application fee 

• Completed CMS application  

• Supporting documents  

• Enrollment confirmation 

Operations  

• EFT (Electronic Funds Transfer) enrollment (banking info submitted to each payer)  

• ERA (Electronic Remittance Advice) enrollment  

• Credentialing coordinator designated  

• Clearinghouse setup  

• Primary contact email monitored

Reminders 

• License renewals  

•  DEA renewal  

•  Malpractice renewal  

•  CAQH re-attestation  

•  Medicare re-validation  

•  Payer recredentialing 

How Long Credentialing Takes for New Practices? 

With a strong credentialing checklist for new practice owners like the one we have collated for you, the next step is understanding the credentialing timeline for new practice owners: How long does it take? Is it the same for all practices?  

For new healthcare practitioners, medical credentialing can be done within a period of 60 to 180 days, which is roughly 3 to 6 months. This estimated period is fitting for service providers starting from the beginning, which involves multiple payers and a lot of back-and-forth.   

New practice owners can get their CAQH done, set up the payer’s verification cycles, carry out contracts, and plan possible dates. If you want to speed up the process, applying for Medicare enrollment through an online platform can save time compared to the paper route. However, this is not the case for online applications, as some incur extra steps like site visits or fingerprinting, which add to the total timeline.   

The credentialing timeline for a new practice is 3 to 6 months, which includes an end-to-end process for 5 to 10 payers and Medicare. Here is how it works out:  

• NPI/CAQH: 2 to 4 weeks  

• Medicare: 30 to 100 days  

• Medicaid: 45 to 90 days 

• Telemedicine: 15 to 45 days 

• Commercial: 60 to 120 days each  

Cost of Medical Credentialing for New Clinics 

The cost of medical credentialing for new clinics can fluctuate based on factors like payers, specialty, or whether you manage the credentialing process in-house or outsource to third-party service providers. Generally, insurance credentialing for a new practice costs $2,000–$5,000 per provider, with an initial fee.   

Here is a comparison for your understanding:  

Common Credentialing Mistakes New Practice Owners Make 

Any process that is complex and time-consuming definitely has some challenges pertaining to it. Like any other process, there are a few common credentialing mistakes new practice owners make. As experts in medical credentialing for new practice owners at competitive rates, we have charted it out here for you, so you know what to avoid. 

• Data mismatch: Inconsistencies in data are among the most reported errors made during provider enrollment for new clinics.  When the data is mismatched across platforms, such as CAQH, NPI, or the payer form, it can be flagged, hindering NPPES validation.   

• Missing CAQH re-attestation: The re-attestation is required every 120 days, which, if missed, can result in expired status. A service provider with an expired status will not be able to connect with payers or access a payer’s profile by the payer.   

• Incomplete documentation: The importance of proper documentation cannot be highlighted. Practices such as Medicare enrollment without the correct documentation can result in longer turnarounds and delayed timeframes.   

• Delayed responses: Not responding to the payer’s emails regularly or leaving faxes unattended is another mistake practices can make. The guidelines from CAQH highlight the importance of maintaining an active email address as your current channel of communication.   

• Delayed start: Starting the medical credentialing process too late can cause cash-flow issues and negatively impact your reputation. So, plan the opening of the practice aligned with credentialing, so you can submit claims and get reimbursements.   

Should You Outsource Credentialing or Do It In-House? 

So now that we have gone through the costs, step-by-step process, and the common mistakes you should avoid, the next big step is deciding whether to outsource credentialing or do it in-house. This largely depends on the size of your practice, resources, and your potential growth plan. Let us look at both options so you can learn which option best suits you. 

In-house credentialing: The benefit of in-house medical credentialing is that you have full control of the process, and no service fee is included. However, it can be slow and carry a higher risk for errors, further delaying the credentialing. Moreover, staffing can cost you another $40,000 to $85,000, with the overall cost of in-house medical credentialing being high.   

Outsource credentialing: Choosing a professional medical credentialing service fee, although it comes with a service fee. You are getting the most cost-effective service. When you work with trustworthy service providers like Credex Healthcare that provide medical credentialing for new services in the U.S., you get faster results. With their expertise and professional relationships, the process can become almost 50% faster and completely error-free. At Credex Healthcare, the standard medical credentialing cost for new practices ranges from $200 to $500 per provider, and group practices can avail services at discounted rates.   

How Credentialing Impacts Your Revenue Cycle? 

Credentialing is integral to any healthcare provider, whether you are a solo practice or a group practice. If you are wondering how credentialing impacts your revenue cycle, here are a few critical ones: 

• A delay in credentialing can interrupt the revenue cycle, affecting cash flow. Improper credentialing prevents providers from submitting claims to payers, which in turn pushes revenue further out. 

• Credentialing delays can add to the operational costs due to claim denials, which affect the entire workflow of the practice.  

• Patient inflow will be directly affected if a practice does not have valid credentials, as patients tend to choose to go to providers who are in the payer network.  

• Without up-to-date medical credentialing, providers are at increased risk of billing errors, which can trigger fines.  

FAQs 

How long does it take to credential a new practice?  

To credential a new practice, it takes about 3-6 months, which includes the process from scratch. The time duration for each practice can vary depending on the payer and if any additional checks are required.  

Can I see patients before credentialing is complete?  

Yes. You can see patients before credentialing is complete, but you cannot submit the claims to the payers until your credentialing process is verified and complete.  

Do I need credentialing for cash-only practice?  

If you are a cash-only practice, you generally would not need credentialing. Credentialing is carried out with the intention of medical insurance companies.  

How much does credentialing cost for a new clinic? 

For a new practice, credentialing costs range from $200 to $500 per provider, per insurance plan. The initial cost, including the setup process, can come around $800, depending on the number of payers involved.  

Conclusion 

Medical credentialing is integral to a new practice, irrespective of its type or size. Medical credentialing for new practice owners is a rigorous process involving multiple steps; if missed, it can result in monetary loss.  

So, why stress over verifications and payer connections? Connect with Credex Healthcare, an expert in medical credentialing, today.