What's The Difference Between Credentialing And Contracting?

If you're a health department that wants to start a billing program or is going to expand, you have probably heard the terms Contracting and Credentialing before. These are very important steps that you have to complete, or you can't bill private insurance companies for services your hospital provides, losing a huge part of revenue. But what these two terms mean and where should you start?

The main points of credentialing

Local health facilities can start billing insurance companies only after they've got credentials. Credentialing is a process that private insurance companies use to verify, obtain, access, and validate a healthcare facility in order to ensure it's a reliable place and for liability purposes.

The start of the credentialing process, create a file folder for an insurance company. Different companies require different documents and forms, and folders will save your time and help you to simplify and organize the process for every payer. To choose the best insurance companies among many others, try to create a survey and ask your clients about their companies to see which are used the most. The most common ones should be among the first ones.

After you have created the list of companies to get credentials from, you'll need to get acquainted with the requirements for every company. Each insurance company has a web page where they state all necessary forms and requirements. From there you'll get all relevant information, provide all documents and fill out all forms. Submit everything you get, and you should get credentials within 180 days. And when you're credentialing, it's time to think about contracting with companies.

The main points of contracting

Contracting refers to the process of creating agreements with private insurance companies to become one network with them. It includes establishing services covered, rates, payments, and other information with each company. Every company requires a separate contract.

If you find credentialing process hard, then you should know that contracting is much harder. You will have to negotiate a lot of things with all insurance companies and your success depends on talking to the right person within each organization. You can try to speak to directors and administrators who have some useful contacts to make the process easier.

In today's world of revenue cycles and health insurance, it's important to remember that improper credentialing may lead to serious consequences, such as denied or delayed reimbursement for services provided. Even worse, it may lead to consequences in terms of compliance violations, which means criminal charges and monetary damages.

Some payers take a long time to get to your case and you may face multiple delays. They arise from the non-standard language some organizations use. Sometimes you will have to work with payers to revise the language. It will require even more time.

Healthcare payers often don't know much when it comes to understanding what billing services what local organizations provide. So, it's always a good idea to be persistent and remind them from time to time that it's very beneficial to contract with your facility.

Premier Credentialing Solutions, LLC has the best credentialing and licensing solutions for you and your business; We proudly offer Provider Enrollment & Physician Credentialing, Medicare – Provider Enrollment & Revalidation, Medical Licensure Services, and Full-Service Credentialing For Billers / Billing Companies. Call (800) 455-4773 for a free, no-obligation consultation.