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How Credentialing Relates to Billing

Two puzzle pieces representing credentialing and billing, demonstrating that the two are connected

Whether you are considering becoming credentialed with an insurance company, you are currently in the process of credentialing with an insurance company, or you are already credentialed and are experiencing claim rejections, it is valuable for you as a healthcare provider to understand how the process of credentialing relates to billing. The two things are directly correlated, and by understanding how, you can put yourself in a better position to troubleshoot claim issues down the line. Let’s get right into it!

What is Credentialing?

We have other blog posts that dive deeper into the process of credentialing, but the basic principle of credentialing is that you are applying to an insurance company to become in-network, therefore becoming eligible to submit insurance claims and receive payment from the insurance company for your services on behalf of the client. You can think of it like applying for a job; you need to fill out an application and prove the necessary skills and credentials (hence the name credentialing) so that the insurance company can decide to “hire” you.

Similar to applying for a job, the insurance company only has so many openings and you may either be accepted (yay!) or denied due to a full panel (boo). If you are accepted, they will present you with a fee schedule, which is the rate that they will agree to pay you for your services. If you are denied due to a panel being full, don’t be discouraged! You can read more about what to do if an insurance panel is full.

Now that we’ve got a basic understanding of what the credentialing process is like, let’s take a look at some of the things that the insurance company will ask for in the credentialing process.

Business Identifiers

When establishing your business, there are a number of identifiers that you will be required to obtain from different agencies. These numbers are unique to your organization, and allow insurance companies to distinguish you and your private practice from other providers and private practices who are credentialed with them.


There are two types of NPI number; the Type 1 NPI number which is typically used for individuals, and the Type 2 NPI number which is assigned to groups or organizations. You can be credentialed using either one, but it is important to know which one you are credentialed with because it will relate directly to how you submit claims! If you have both a Type 1 and Type 2 NPI, be sure to know which is which. You can double check your NPI number by looking it up in the NPPES registry, which is the organization that assigned you your NPI in the first place.

Tax ID

There are also two different types of tax ID that you may have, the first being your social security number if you are a solo practitioner, and the second being an Employer Identification Number (EIN) that would be assigned to the business. Most people will credential using one or the other, not both. It depends on how you have structured your private practice!

Business Address

Your business address is the final identifier that the insurance company will collect in the credentialing process which will also be used during the billing process. If your practice ever moves to a new address, be sure to update the insurance company across all departments! If you receive paper checks, you want to be sure that your payment address is updated and you will also want to update your address with the credentialing department so that you can submit claims using the proper address as well.

How Credentialing and Billing Interact

When you are in the process of credentialing, you will submit all of the information mentioned above. This is then entered into the system of the insurance company, and will be used to verify your organization in the future. It is similar to how you need to provide your date of birth or the last 4 digits of your social security number when completing banking transactions- both the bank and the insurance company need to identify that you are who you say you are!

The information you provide during the credentialing process is also expected to be presented on every claim that you submit for billing. You can read more about how to fill out a claim form here. This is how the insurance company checks that you are indeed credentialed and authorized for payment, and they can also then refer to the agreed upon rate in your fee schedule to properly reimburse you for services rendered. If any of the information that is submitted on the claim does not match what was offered in the credentialing process, then you will receive a claim rejection.

We see it all the time- providers are unsure of how they are credentialed with the insurance company and are submitting claims with information that they think is right, when the insurance company has something completely different on file. It can take a lot of time to identify and resolve the issue, which is where the experience of a Practice Solutions biller can come in. Our billers know what questions to ask to help identify billing issues as quickly as possible and provide direction for resolution. Our billers are then able to submit your claims for you as well as complete any necessary follow-up, allowing you to focus on the care of your patients.

What Next?

So now you know how credentialing and billing are related, but what do you do with this information? We’ve got a couple of recommendations:

Know how you are credentialed

No matter what stage you are at in the process (considering credentialing, currently being credentialed, or are already credentialed) it is important for you to know how you are credentialed! If you are doing your credentialing yourself, make sure that you have good organized notes on what information you filled out your forms with. If you are working with a company who is doing credentialing for you, make sure that you communicate with them if you would like to have your credentialing completed using specific identifiers, or have a good understanding of which identifiers are being used for which insurance company (yes- they can be different for each insurance company if you have multiple identifiers!). If you are already credentialed and are experiencing denials, make sure that any updates have been made with the credentialing department of the insurance company, especially if you have moved your practice to a new address, have acquired an EIN for your business, or have decided to bill under a type 2 NPI rather than a type 1.

Have your credentialing information ready for your biller

Whether you are doing your own billing, you have an in-house biller, or you hire out your billing to a company like Practice Solutions, the easiest way to keep things running smoothly is to have an organized documentation of how you are credentialed. Often, this information is included on the signed and completed credentialing contract, but if you keep track of what information is used throughout the application process then you should be able to record that onto your document. Whoever is doing your billing will need to know how you are credentialed, which is why Practice Solutions requests copies of your insurance contracts as part of our setup process. We make sure that everything in your EHR is set up as completely and accurately as possible to have the best chance of avoiding claim rejections.

If you would like to know more about our billing services, contact us today!

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