Starting A Private Practice With Credentialing

PayrHealth · Updated November 2026

To credential a new private practice, set up the business first, then the identifiers, then the payors. Form the entity and get a tax ID, get the group NPI, license and register at the new location, buy malpractice coverage, open the bank account, get the location operational, update CAQH, then file Medicare and state Medicaid with commercial applications alongside, and Medicare Advantage and managed Medicaid plans once your Medicare and Medicaid numbers arrive. Start four to six months before opening day, and budget for a gap: many payors won’t process an application until the location is open.

Leaving a hospital or a large group to open your own practice means a long list of details, and credentialing sits near the top. Until each payor has credentialed you under your new practice, you can’t see its members in network, no matter how long you were credentialed at your last job. Here is the order of operations, what it costs, and how to become credentialed with insurance companies without delaying your opening.

What is credentialing for a new practice?

Credentialing is how each payor verifies your education, training, licenses and history before it lists you in its directory and lets its members see you in network. For a new practice, it also means linking you to your new business: its tax ID, its group NPI and its locations. Once you are credentialed, you move into contracting, where you and each payor set reimbursement rates.

Credentialing is the first step to attracting patients who want an in-network provider so their plan pays most or all of the bill.

The order of operations

Each step depends on the one before it, so the order matters.

1. Form the business entity and get a tax ID. Payors contract with the entity, under its Tax Identification Number.
2. Get a group NPI. Apply for a Type 2 (organization) NPI through the national NPI registry, and update the practice location on your individual Type 1 NPI.
3. License and register for the new location. Confirm your state license is active, including any prescriptive authority, and that your DEA registration and state controlled substance registration cover the practice address.
4. Buy malpractice coverage. Payors ask for a certificate of insurance. For commercial plans it has to list the practice’s name and each individual provider.
5. Open the business bank account. Medicare and most payors pay electronically and need the account details on the application.
6. Get the location operational. Medicare needs a practice location where you deliver care, and some provider types get a site visit. Many payors require the location to be operational before you submit an application, or within 30 days of submitting it, so plan to carry rent and staff before the first effective date.
7. Update CAQH. Add the new practice, tax ID and location to your CAQH Provider Data Portal profile, attest, and authorize each payor you will apply to.
8. Apply to payors in the right order. Enroll the group and yourself with Medicare through PECOS and reassign your Medicare payments to the group, and apply to your state Medicaid program. Commercial applications can go in alongside. Medicare Advantage and Medicaid managed care plans won’t accept an application until you have your Medicare PTAN and traditional Medicaid number, so they come last.
9. Review every contract before you sign. Each participation agreement sets your rates and terms for years.

How to become credentialed with insurance companies

For each payor: confirm its network is open to your specialty in your service area, submit its application with your CAQH profile attested and authorized, follow up at the interval the payor recommends, answer requests for information the same day, and confirm the contract is loaded and dated before you schedule its members. Plan on 60 to 150 days per payor. See 7 Key Steps In Provider Credentialing and how long credentialing takes.

Which payors should a new practice credential with first?

A major hurdle for new practices is knowing which insurance companies cover the most patients in their service area. Office managers often know from experience, but these decisions lead to contracts that last years, so use data. Your options run from government programs like Medicare and Medicaid to large commercial plans and regional Blue Cross Blue Shield plans.

The good news is that payor markets are concentrated. In the median state, five parent companies hold 80% of commercial covered lives, in PayrHealth’s analysis of January 2026 enrollment data. Credentialing with the right five first gets a new practice to most of its commercially insured patients. Then add the Medicare Advantage and managed Medicaid plans your patients use. See What Are Insurance Panels?

Requirements for credentialing and contracting

Before you reach out to payors, settle these:

• A professional liability insurance policy for the practice
• Full licensure in your state, including prescriptive authority
• DEA and state controlled substance registrations at the practice address
• A complete, attested CAQH profile, with reminders set to re-attest every 120 days for as long as you practice
• A group NPI, tax ID and bank account in the practice’s name

What does credentialing a new practice cost?

Some of it is free. NPIs and the CAQH profile cost nothing, and physicians, other practitioners and their groups don’t pay Medicare’s enrollment application fee. The costs come from state license and registration fees, malpractice premiums, the staff time or outside help the applications take, and above all from opening before your effective dates. Visits you can’t bill in network while applications are pending may never be paid. See what a credentialing delay costs.

A planning timeline for opening day

• Six months out: form the entity, get the tax ID and group NPI, confirm licenses and registrations, buy malpractice coverage that lists the practice and each provider.
• Five months out: open the bank account, get the location operational (many payors require it before, or within 30 days of, submission), update and attest CAQH, file Medicare and state Medicaid, and send commercial applications alongside.
• When the Medicare PTAN and Medicaid number arrive: submit Medicare Advantage and managed Medicaid applications.
• One month out: confirm every effective date and loaded contract; decide how to handle patients of any payor still pending. Some contracts won’t start paying until after you open.

Mistakes that delay opening

• Not budgeting for the gap between opening and effective dates: many payors require the location to be operational before they’ll process an application, so you may carry rent and staff for months before contracts pay
• Applying under your old employer’s tax ID or location
• Forgetting to add the new practice location to CAQH and the NPI registry
• Not reassigning Medicare payments to the new group
• Signing the first contract offered without reading the rates

Frequently asked questions

How do I get credentialed with insurance companies for a new practice?

Set up the entity, tax ID, group NPI, licenses, malpractice coverage and bank account; update and attest CAQH; then file Medicare and state Medicaid with commercial applications alongside, add Medicare Advantage and managed Medicaid once your numbers arrive, and follow up consistently at each payor’s cadence.

How long before opening should I start credentialing?

Four to six months. Most payors take 60 to 150 days, and you need effective dates before you see their members.

Does my credentialing carry over from my old job?

Your verified credentials do, but each payor has to add your new practice, tax ID and location, often under a new group contract, before you can bill as that practice.

Do I need a group NPI?

Yes, if the practice bills as an organization. You keep your individual NPI and add the group’s Type 2 NPI.

What does it cost to credential a new practice?

NPIs, CAQH and physician Medicare enrollment are free; license, registration and malpractice costs, staff time, and revenue lost to delays are the real costs.

Open your practice in network

PayrHealth’s credentialing team enrolls new practices and their providers with commercial payors, Medicare, Medicaid and Medicare Advantage plans and tracks every application to an effective date. See our credentialing services.

Once you are credentialed, the rates in those first contracts set your revenue for years. Compare them with the best-paid quarter of practices like yours, for the same codes, in your market. See if you qualify for a free rate review.

Read next

• 7 Key Steps In Provider Credentialing
• What Is Provider Enrollment?
• What Are Insurance Panels?

How we got this number

PayrHealth analysis of payor enrollment data, January 2026 snapshot: commercial covered lives (fully insured and self-insured) by parent company in each of the 50 states and the District of Columbia. For each state we ranked parent companies by covered lives and counted how many it takes to reach 80% of the state’s total, then took the median across states.

Sources

• CMS, National Plan and Provider Enumeration System (NPI registry): nppes.cms.hhs.gov
• 42 CFR 424.514, Medicare application fee for institutional providers: ecfr.gov
• 42 CFR 424.520(d), Medicare effective date of billing privileges, as applied in HHS Departmental Appeals Board decision CR6566 (2024): hhs.gov
• CAQH, provider guide to re-attesting every 120 days: caqh.org