Contracting and Credentialing with Insurance Companies

Jan 7, 2020

When it comes to engaging with insurance companies in the business and consumer services industry, two essential processes that organizations need to navigate are credentialing and contracting. Understanding the nuances and disparities between these two terms is crucial for professionals in the field. Let's delve deeper into the differences between credentialing and contracting and their relevance.

Understanding Credentialing

Credentialing is the process of verifying the qualifications and legitimacy of a healthcare provider or organization before they can offer services to insurance companies and their policyholders. The objective of credentialing is to ensure that the healthcare provider meets specific professional standards and requirements set forth by the insurer.

Healthcare providers often need to provide detailed information about their educational background, licensure, certifications, insurance coverage, and any relevant work history. This information is thoroughly reviewed by the insurer to determine if the provider is eligible to be part of their network.

Exploring Contracting

Contracting, on the other hand, involves the formal agreement or contract between a healthcare provider or organization and an insurance company. This agreement outlines the terms and conditions under which the provider will offer services to the insurer's members.

Contracts typically include details such as reimbursement rates, services covered, billing procedures, compliance requirements, and other provisions that govern the relationship between the provider and the insurer. Establishing a contract is crucial for healthcare providers to participate in an insurer's network and receive payment for the services rendered.

The Relationship Between Credentialing and Contracting

While credentialing and contracting are distinct processes, they are closely interconnected in the healthcare industry. Credentialing serves as the initial step for providers to become eligible for contracting with insurance companies.

Successfully completing the credentialing process paves the way for healthcare providers to enter into contractual agreements with insurers, allowing them to deliver services to a broader patient population covered by the respective insurance plans.

The Significance of Insurance Contracting

Engaging in insurance contracting offers several benefits for healthcare providers, including access to a larger patient base, streamlined billing processes, enhanced credibility within the healthcare network, and potential for increased revenue streams.

By partnering with multiple insurance companies through contracting arrangements, healthcare providers can diversify their revenue sources and expand their practice while ensuring that they meet the healthcare needs of a more extensive range of patients within the community.


In conclusion, understanding the difference between credentialing and contracting with insurance companies is essential for healthcare providers and organizations in the business and consumer services sector. By mastering these processes and leveraging strategic partnerships with insurers, professionals can optimize their practice operations, expand their patient reach, and foster sustainable growth in the competitive healthcare landscape.