Credentialing Services

What Is Credentialing In Healthcare?

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Here at PayrHealth, we know medical credentialing is a vital part of any functioning healthcare facility. Without proper provider credentialing, the healthcare professionals who work in your facility may be unable to perform certain tasks or treat patients at all. Credentialing is also an important aspect of most payor contracts. An insurance provider will have a list of required credentials that your providers must meet to see patients and be reimbursed for their work.  

Sometimes it can feel like there are an endless amount of steps in provider credentialing with a lot of moving parts. This quick guide will provide you with everything you need to know about credentialing in simple terms from facility requirements to credentialing issues in healthcare. To help your healthcare facility operate smoothly and efficiently, learn the ins and outs of credentialing so you won’t be caught by surprise by your credentialing responsibility.  

Credentialing and LIPs  

Before answering the question “What is credentialing in healthcare?” it’s good to be familiar with the concept of an “LIP.”  

LIP stands for licensed independent practitioner. An LIP is defined as “an individual, as permitted by law and regulation, and also by the healthcare organization, to provide care and services without direction or supervision within the scope of the individual’s license and consistent with the privileges granted by the organization.”1

Put simply, an LIP is someone who is allowed to treat patients without being managed or supervised.

The laws that define who is and who is not allowed to treat patients without supervision vary from state to state. For example, nurse practitioners are seen as LIPs in 17 states. However, in the other 33 states, they are not and must work under the supervision of an LIP.  

Provider credentialing

How Credentialing Works

When you’re credentialing the providers in your healthcare facility, you’ll likely be checking for proof that they are legally considered LIPs. You need to verify the qualifications of each LIP’s education and training from primary sources. Typically, this process involves a lot of documentation.

Here is some of the most common information requested of providers:

  • Name, date of birth, gender, ethnicity, mailing address, and other personal details
  • Social security number and other citizenship information  
  • Proof of immunizations and tuberculosis testing records
  • Controlled substances certificates (in certain states)
  • A recent photograph  
  • A current CV
  • Medical school record or other healthcare training certificate
  • Proof of residency
  • Licensing and specialties
  • National Provider Identifier (NPI) number, username, and password
  • Board certification  
  • Hospital and/or medical group affiliations
  • Sanctions or disciplinary actions
  • Malpractice claims history  
  • Proof of professional liability insurance
  • Continuing medical education documentation
  • Peer references  

Your healthcare facility gathers all of this information about the medical practitioner, then checks directly with the relevant licensing agencies, medical boards, and other organizations to verify it. Once all of the information has been reviewed and verified, your healthcare facility awards its own credential to the provider. The credential signals that the provider possesses all of the necessary evidence of their ability to work in their assigned medical role.

Examples of awarded credentials include:

  • Official letters
  • Badges
  • Identification cards
  • Certificates  

Credentials Verification Organization

The medical credentialing process can be tedious, and it requires a lot of your facility’s valuable time. It often takes 60 to 180 days, or more, to complete.2

However, cutting corners is not an option. Valid credentials are essential for your healthcare facility to operate.People who want to complete the credentialing process more efficiently often use a Credentials Verification Organization, or CVO.  

A CVO is defined as “any organization that provides information on an individual’s professional credentials.”1

In other words, a CVO is a third party you can turn to for help with the credentialing process. They make money by providing the medical credentialing service for you, so your facility can focus on daily operations. CVOs can often fulfill your credentialing needs more completely, accurately, and quickly than an in-house team member who’s also balancing patient care.  


Privileges are another important aspect of the credentialing process, which must be fully understood to avoid future contract disputes and litigation.

When your healthcare facility assesses a provider’s eligibility and gives them a credential, it also gives them certain privileges. Based on your evaluation of a provider’s licensure and performance, your healthcare facility authorizes that provider to perform a limited and clearly defined set of patient care services.

These patient care services are often described as the provider’s privileges.  

The privileges you grant are dependent on your healthcare facility’s equipment, qualified staff, financial resources, and other factors. Privileges must only include services that can be performed within your healthcare facility. For example, you may hire a provider who is fully licensed to perform heart surgery, but if your facility lacks the capacity to support that privilege, you cannot include heart surgery as one of their authorized patient care services.  

Credential Renewals  

Credentialing is far from a “set it and forget it” aspect of the healthcare business. In fact, you must verify the qualifications, education, and license of the LIPs in your healthcare organization every two years in 49 out of 50 states. (The credentialing and privileging renewal requirement in Illinois is every three years.1)

Credentialing Best Practices  

If your healthcare facility does credentialing in-house (meaning it doesn’t hire the services of a CVO), there are a few best practices that you should keep in mind.

  • Become familiar with your state laws – Not only do states have different requirements for credential renewals, but also for how quickly credentialing must be completed, what providers must do to be credentialed in multiple states, how providers can transfer their credentials from one facility to another in the same state, and how providers must be credentialed to perform telemedicine services.  
  • Get to know the CAQH – The Council for Affordable Quality Healthcare, or CAQH, is a nonprofit organization that allows insurance companies to use a single, uniform credentialing application. To date, there are over 900 health plans, hospitals, and other healthcare facilities that use the CAQH credentialing program.3 If you master the requirements of this program, credentialing and recredentialing will be much easier.
  • Require linkage in your contracts – It’s becoming more popular for healthcare facilities to link a provider’s start date to their submission of all credentialing paperwork. This incentivizes the provider to speed the process along, enabling them to see patients faster, which helps grow your practice.  

Common Credentialing Errors to Avoid

With so much information to handle from many different sources, mistakes can easily be made in the credentialing process. Here are some of the most common errors to watch out for:

  • Outdated provider information – Although a lot of the required documentation is not time-sensitive, some items are. You could find yourself 60 days into the credentialing process when one piece of outdated information grinds everything to a halt. For example, information on previous malpractice claims or disciplinary action often gets reported slowly by healthcare facilities. Triple check that your information is up to date.
  • Missing primary source verifications – It’s common for providers to have trouble accessing their primary source certificates, records, licenses, and so on. Feeling pressured to complete their applications and submit all the required materials, they may turn to various secondary source verifications. These sources often lead to even more delays, and may not be entirely accurate. Credentialing a provider with these incomplete or inaccurate verifications can cause issues for your facility.

Credentialing and Payor Contracts

With any payor contract, there will be clauses dictating the requirements your facility must meet for proper credentialing and privileging. In some cases, payors offer contracts whose credentialing requirements are not ideal for your facility and work against your best financial interest.  

Luckily, you don’t have to navigate complicated payor contracts by yourself.

With PayrHealth, the managed care contracting solution in all 50 states, you can sign better contracts and get more value from your business relationships. The payor contract experts at PayrHealth manage your contracts so you can focus on delivering the best patient care. They will support you in negotiating better rates, getting more patients, expanding your practice, and more.

If you think your facility could benefit from earning higher returns on investment across all of your payor contracts, contact us today.


  1. The Joint Commission. The Who, What, When, and Where’s of Credentialing and Privileging.
  2. Revenue Cycle Inc. Provider Credentialing & Payor Contracting Processes.  
  3. TherapyNotes. How to Complete Your CAQH Profile.
  4. Practice Suite. 4 Physician Enrollment and Credentialing Best Practices.
  5. Symplr. Most Common Provider Credentialing Errors and Real Life Cases to Learn From.
  6. SmartSheet. Everything You Need to Know About Healthcare Provider Credentialing.  
  7. The Bogotá Post. 10 Reasons Why Medical Credentialing Is Important.

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