How credentialing works
Credentialing typically involves collecting documentation such as medical school records, board certifications, state license numbers, malpractice history and references, then verifying each item directly with the issuing body rather than accepting self-reported information. Hospitals and health systems credential a provider before granting privileges, and this is separate from, but related to, payer enrollment for billing purposes.
The process can take 60 to 120 days or longer depending on the payer or facility, since primary-source verification and committee review steps cannot be rushed. A gap in credentialing means a provider may be able to treat patients but not yet bill certain payers for those services, which delays revenue even after care has been delivered.
Example
A newly hired physician joins a group practice and needs credentialing with five commercial payers before claims can be billed under their name. The credentialing team submits applications with license, education and malpractice documentation to each payer, and approvals come back over 90 days, during which services are billed under a supervising provider already credentialed with those payers.
Credentialing in QuickBooks Online vs Xero
Credentialing is typically tracked in practice-management software or a dedicated credentialing platform that flags expiring licenses and re-attestation deadlines. Once a provider is approved and billing under their own number, claims and payments flow through the same practice-management system and reconcile to the general ledger in QuickBooks Online or Xero.
Common mistakes
- Letting a new provider start seeing patients before credentialing applications are submitted, which stretches out the 60 to 120 day approval window further before that care can be billed.
- Missing a re-attestation or license renewal deadline for an already-credentialed provider, which can suspend billing privileges with a payer the practice has worked with for years.
- Submitting inconsistent information across different payer applications, such as a mismatched address or license number, which triggers delays or a rejected application that has to be resubmitted.
Why it matters
Credentialing delays mean a provider can deliver care but the practice cannot yet bill for it with a specific payer, which directly strains cash flow during a new hire's first months. For a medical practice or healthcare provider, tracking credentialing and renewal deadlines proactively protects revenue that has already been earned through patient care from being delayed or lost to an administrative lapse.
Related terms
How LedgerBPO handles credentialing
Our credentialing team manages applications, follow-up and expiration tracking across payers so a new provider can start billing as soon as approvals come through, instead of care being delivered with no way to collect for it.