Credentialing vs. Contracting: Everything Rehab Therapists Need to Know

There’s a lot of confusion about the difference between credentialing and contracting—as well as what PTs, OTs, and SLPs must do to complete each process. In fact, questions about the insurance credentialing process are some of the most common inquiries we get from new clinics. So, I decided to do a little digging. And with some help from clinical-biller-turned-WebPTer Asia Giuffrida, our Therabill Onboarding Team Lead, I’ve compiled everything rehab therapists need to know about credentialing and contracting:

What is insurance credentialing?

As Giuffrida puts it, “Credentialing proves you are who you say you are: an educated, eligible, and licensed provider.” During this process, the payer verifies your professional records, including:

• licenses, 
• diplomas, 
• attestations, 
• certificates, and
• personal references.

According to Giuffrida, some payers even verify your CV. “Naturally, insurances need to ensure you’re a real professional before they want to do business with you,” she says. Makes sense, right? Just as a practice owner wouldn’t want to hire a new staff member without verifying his or her identity, an insurance company wouldn’t want to pay a provider without knowing exactly who that provider is.

What are the steps?

1. If necessary, make sure you first establish a business entity (e.g., LLC, S-Corp, or PC) and obtain a tax ID number. (If you operate as a sole proprietor, you may need to get a federal TIN.)
2. Obtain liability insurance.
3. Get yourself an NPI number—if you haven’t already. You’ll also need a Type 2 NPI for your business entity. (If you’re incorporated as a sole proprietor, you’ll need a Type 2 NPI as well.)
4. This probably goes without saying, but make sure you’re fully licensed in the state in which you’ll be rendering services.
5. Create your Council for Affordable Quality Healthcare (CAQH) profile and keep it current.
6. Have an address for your practice.
7. Decide which insurance companies you want to be credentialed and contracted with. Ask your peers or your biller who the most widely-used insurance payers are in your area. Generally speaking, it’s a safe bet to go for the large entities like Blue Cross Blue Shield, Humana, Aetna, UnitedHealthcare, and federal payers like Medicare and Medicaid.
8. Reach out to each payer to inquire about the credentialing process; then, complete the credentialing application. The process itself can be different for each payer, so it’s important to verify the steps you’ll need to take.
9. Once payers receive your applications, they’ll vet your credentials to make sure you meet their requirements.
10. When verification is complete, your file will go to the credentialing committee for approval.

How long does it take?

According to Giuffrida, “That's enormously variable and depends completely on the insurance company. Everyone should be prepared for it to take three to six months. No joke.”

What is insurance contracting?

Once the credentialing phase is complete and the payer has approved the provider, the payer will extend a contract for participation. In Giuffrida’s words, “Contracting (a.k.a. being ‘in network’) is an optional relationship offered by most insurances that makes you an official ‘participant’ with that insurance. Being contracted restricts your freedom to charge and collect from patients and often involves negotiating rates with that respective insurance company.” That said, being in network means you'll likely get a more steady patient stream, because patients typically receive better coverage for in-network services.

What are the steps?

1. Once the payer provides you with a contract, carefully review the language, reimbursement rates, and any other details and obligations. You may wish to have your legal advisor review the terms of your contract.
2. If the standard reimbursement rates don’t meet your expectations, start negotiations. (For a step-by-step guide to negotiating payer contracts, check out this resource.)
3. Once everything looks good, sign the contract and return it to the network.
4. You’ll receive an effective date and provider number. Once your contract is active, begin billing the plan and receiving in-network reimbursement.

How long does it take?

Contracting can be just as unpredictable as credentialing, but it's usually not as crucial. That’s because, generally speaking, you can still bill out of network when you’re not contracted. But Giuffrida advises providers to budget a few months total to complete both processes.

What should therapists know about Medicare credentialing and contracting?

If you choose to contract with federal payers (e.g., Medicare), you should first reach out to the intermediary officer who handles the administrative functions for your jurisdiction. For example, those who are interested in contracting with Medicare should reach out to the Medicare Administrative Contractor (MAC) for their region. Medicare has some pretty strict enrollment standards, which you can learn more about on the CMS website.

Before you apply to contract with Medicare, you’ll need:

• a primary operational service location,
• banking information for electronic reimbursement,
• personal details for all of your practice’s owners (including partial owners), and
• supporting documents (including citizenship documents for therapists born outside of the United States).

What are some best practices for credentialing and contracting?

So, you’re all ready to get credentialed and contracted, right? Not so fast; here are some final considerations before you dive in:

• Make sure all of your documents are accurate and that the information matches. Update any details as needed (e.g., address, names, or TIN).
• Contact your professional references beforehand so they respond in a timely manner to any reference requests.
• Make sure your biller (or any staff member who submits the documentation) understands the regulations before submitting documents.
• Consider having someone experienced in enrollment review your applications before you submit them.
• Don’t wait. As Giuffrida mentioned above, the application process can take months, and in most cases, you won’t be able to bill as an in-network provider until your contract is effective.
• Retain a copy of all your documents, credentialing applications, and contracts.

So, there you have it: everything PTs, OTs, and SLPs need to know about credentialing and contracting. Hopefully, you feel armed with the knowledge you need to confidently (and efficiently) move through these processes. Got any questions? Leave them in the comment section below!