What Is Credentialing (and Why Do You Need It)?
🕒 Updated on Last Modified Date
Your guide to getting in-network with insurance companies—without the overwhelm.
If you’re a private practice provider thinking about taking insurance, you’ve probably heard the word credentialing more than once. Credentialing for private practice providers is the process that allows you to join insurance networks, bill for services, and attract new clients through payer directories. But what does it actually involve—and why does it matter?
Let’s break it down in plain English.
What Is Credentialing?
Credentialing is the process insurance companies use to verify that you’re a legitimate, qualified provider. They’ll review your education, licensure, training, malpractice history, and work experience to determine if you meet their standards to join their network. It’s their way of making sure you’re the real deal, before they agree to pay you for seeing their members.
Think of it like a background check, but specific to your clinical qualifications. It’s the payer’s way of ensuring their members are receiving care from legitimate, vetted professionals before agreeing to reimburse you for services.
This process can take anywhere from 30 to 120 days, depending on the payer, your specialty, and how quickly you provide accurate documentation.
Credentialing vs Contracting vs Enrollment
These three terms often get used interchangeably, but they’re actually three distinct steps in the process of joining an insurance network.
- Credentialing = This is the verification process. The insurance company evaluates your education, training, licenses, and other credentials to ensure you meet their standards.
- Contracting = Once you’re approved through credentialing, the insurance company may offer you a contract. This outlines your reimbursement rates, covered services, and provider obligations.
- Enrollment = After the contract is signed, you are formally enrolled into the insurance company’s system. This is the step that officially makes you an in-network provider and allows you to submit claims.
Skipping or misunderstanding any of these stages can delay your ability to bill or get paid—so it’s important to know how they work together. You may need to go through all three before you’re officially in-network.
Why Credentialing for Private Practice Providers Matters
You might be wondering, Can’t I just see clients and bill insurance later?
Not exactly.
If you plan to accept insurance in your private practice you’ll need to go through credentialing to become in-network. Here’s why it matters:
- You can’t bill most insurance companies until you’re credentialed and contracted.
- You won’t appear in insurance provider directories, which can reduce your visibility to new clients.
- You may not be able to accept new patients who rely on in-network benefits.
- Trying to bill before you’re officially in-network could lead to denials, compliance issues, or clawbacks.
Being in-network opens the door to steady referrals, increased trust, and consistent reimbursements. It also makes care more accessible to clients who rely on insurance to receive services.
What Happens If You Skip Credentialing?
Some private practice providers assume they can just bill insurance on behalf of clients and figure out the details later. Unfortunately, that can backfire—quickly.
If you skip credentialing and try to bill anyway:
- Your claims will be denied. Insurance companies will reject claims submitted by non-credentialed providers unless the service is out-of-network—and even then, reimbursement is often minimal.
- You may be required to refund payments made in error or through improper billing.
- You could face compliance violations, especially if you’re unknowingly billing incorrectly or using another provider’s NPI (which can raise red flags).
- You’ll miss out on new client referrals from insurance directories, primary care providers, and other network-based systems.
Bonus: Do All Providers Need to Be Credentialed?
If you’re part of a group practice, sometimes credentialing is handled by the group administrator, owner or a third-party credentialing company. However, each individual provider still needs to be credentialed and enrolled with the insurance companies they plan to bill under—especially for mental health and medical specialties.
Even if you’re fully licensed and experienced, insurance companies don’t assume you’re eligible until you go
through the full process.
The Bottom Line
Credentialing is an essential step in the journey to becoming an in-network provider. It might feel tedious, but it’s the foundation for getting paid by insurance companies and building a sustainable, accessible private practice.
Yes, the process takes time. But once you’re credentialed and contracted, you’ll:
- Be able to bill insurance directly
- Show up in provider directories
- Reach more potential clients
- Build trust with referring providers and patients
- Create new revenue streams for your practice
And you don’t have to go it alone. Credentialing can be time-consuming, confusing, and full of red tape—but with support, it becomes much more manageable.
Coming Up in Part 2…
Before you fill out a single application, there are a few key documents and details you’ll need to have ready. In Part 2 of this series, we’ll walk you through the must-have items—like CAQH, NPI, malpractice insurance, and more—to make sure you’re fully prepped and not scrambling mid-process.
Stay tuned—you won’t want to miss it.
Feeling Overwhelmed?
Need help navigating credentialing for your practice? I support private practice owners like you every step of the way—from initial setup to long-term maintenance. Let’s chat!
