Payer Enrollment vs Credentialing: What's The Difference?
A quick breakdown of the two processes, how they differ and why both are important
Payer enrollment and credentialing are two terms that often cause confusion in the healthcare industry. It's a common misconception that they’re the same thing, and this uncertainty can lead to issues across your organization. Therefore, it’s imperative that everyone is on the same page when speaking about these terms and how they relate to health plans, providers, and practices.
In this payer enrollment vs. credentialing article, we'll explain what these processes are and when they should be used. So, let’s get started, shall we?
What is credentialing?
Let’s start with credentialing, as this process must occur before payer enrollment takes place. Credentialing is a formal multi-step process of verifying a provider's education, training, qualifications, malpractice history, and more. In other words, it’s an extensive background check done to review a licensed or certified healthcare provider's competency and ensure they can provide patients with the highest level of care.
Why is credentialing important?
In a nutshell, it all comes down to protecting patients. A series of established guidelines is used during the credentialing process, which helps ensure providers are held to the same standard. This consistency is important across all healthcare institutions, as patient safety and quality of care are paramount. The last thing we want is inexperienced healthcare workers performing medical services they’re not qualified to do, or even worse, individuals posing as providers by utilizing fake certifications.
While credentialing is time-consuming and tedious, it’s meant to help patients receive superb care. In addition, getting clinicians credentialed provides healthcare institutions and payers with a safety net of liability protection.
It’s also important to mention that some organizations, like the Joint Commission and the Centers for Medicare and Medicaid Services (CMS), require credentialing. Providers can’t receive Medicare or Medicaid reimbursements if they aren’t credentialed. Plus, if hospitals want to maintain or achieve Joint Commission accreditation, their providers must be credentialed.
How does credentialing work?
It ultimately depends on the health institution's bylaws, but typically, the process involves the following:
Providers must complete an application for every facility they plan to work at
They must provide supporting documents, such as their medical licenses, proof of liability insurance, sealed transcripts, and more. Primary verification of all documents is required and often takes a lot of time.
Once submitted, the information is reviewed and verified for accuracy
If everything checks out, the provider is approved
Credentialing can take anywhere from a few weeks to several months; if there are errors along the way, it takes even longer. Performing credentialing in-house is often challenging for institutions since it requires having staff who are knowledgeable about the process and have the right technology. The outcome of delayed credentialing and re-credentialing is lost revenue, which can significantly impact a practice's financial health, so staying on top of this is essential.
Many healthcare companies outsource credentialing to Credentials Verification Organizations (CVOs) like OpenLoop. Offloading the credentialing process to an NCQA-accredited organization saves money and time, as companies can cut labor and supply costs. By working with experts, you should also experience fewer errors, which can be costly for medical organizations.
What is payer enrollment?
Once the credentialing process is complete, it’s time to work on payer enrollment (aka provider or insurance enrollment). Payer enrollment is a process providers undergo to enroll in a health insurance plan. Some of those payers include public health insurance programs like Medicare and Medicaid. However, there are also several commercial payers they may want to align with, such as Humana and Blue Cross Blue Shield.
Why is payer enrollment important?
On a basic level, it comes down to providers getting paid and patients saving money. Once a provider is enrolled in a health plan, they’re deemed “in-network” or “participating.” By joining a plan, providers, and practices agree to accept a discounted rate for certain medical services rendered to an insurer's covered members. These reimbursement rates are key to a provider’s financial health.
It’s also safe to assume that providers enrolled in multiple health plans attract more patients. After all, most patients try to avoid out-of-network care costs and stick with those covered by their insurance. It’s no secret that America has one of the highest healthcare costs in the world, so patients are trying to stay in-network to reduce out-of-pocket spending.
How does payer enrollment work?
Like credentialing, payer enrollment can also be a confusing and long-drawn-out process, especially if you’re unsure how to go about it. For one, each payer has their own rules and regulations, so you can’t assume they all require the same information. In addition, health plans may differ from state to state. However, here’s generally how the process works:
Providers identify which plans are most prevalent in their area
Next, they submit a participation request to the health plan using their application process
The health plan reviews the provider's application and performs credentials verification
If verified, the credentialing file is sent to the plans Credentialing Committee for approval
Once approved, the provider is sent a participation contract
Provider reviews terms, rates, responsibilities, etc., and signs if they agree
Once the health plan receives the signed agreement, they’ll assign a provider number and an effective date
Providers should be prepared to wait 1 to 6+ months for approval. Many underestimate the amount of time it takes and assume they’ll be reimbursed if they provide services before being enrolled. However, this isn’t always the case. If there’s a lot of uncertainty surrounding the process, it may make sense to outsource payer enrollment, too.
Payor enrollment vs. credentialing: both necessary hassles
Payer enrollment and credentialing are a required part of our healthcare industry, but you don't have to suffer through all their administrative headaches.
OpenLoop offers credentialing and access to our expansive payer network through our provider staffing services. Our advanced technology allows us to complete credentialing in 2 to 4 weeks. We can also assist you with ongoing reviews to avoid lapses that could affect your bottom line. Plus, OpenLoop has an extensive network of NCQA-certified providers across all 50 states, so you don’t miss a beat.
Want to learn more? Contact us today!
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