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Should my billing company do my payer credentialing?

While this question of who to use doesn’t come up as often as it should, it’s one that we know is worth asking. It’s also one that 95% of new practices must answer whether they’re prepared to or not. With 15 years of experience being a credentialing & billing company and spending the last 6 years as a company specializing in solely payer enrollment and contracting, we are uniquely equipped to answer this question.  When we were doing billing, we had two options for clients as it related to our credentialing/billing packages.  We had to use a third party to handle payer negotiations as required by anti-trust laws.  This was due to us being paid a percentage of the practice’s revenue and could therefore, not provide services to the practice that enhanced this revenue by means of marketing or payer contracts.  We are going to approach this decision as if we are opening a new practice and in the process of selecting all of our vendors.

Why Should You Care?

This is actually a great question and really needs to be explored prior to getting into any other specifics.  If you don’t understand the importance of credentialing and contracting for your practice, then the rest of this article will be pointless.  While it’s true that you need it done right, caring who actually does it is the primary prerequisite to ensuring it IS done right.  There are dozens of companies out there claiming to be the Best, Cheapest or most experienced which makes it all the more challenging to select the “right” company.  Before we get to selecting the “right” company, I’d first like to cover why it actually matters.


4 Reasons To Care Who Does Your Credentialing

1. Fast Pass to Failure:

Done incorrectly, credentialing and contracting is the easiest way to ensure your business doesn’t make it beyond its first 6 months. There are dozens of ways to screw up credentialing and any one of them could inhibit or prevent you from submitting claims.  The most common problem is a delayed participation status due to errors made in the application.  This extends the credentialing time period from 4-6 months to 8-12 months.  Unless you’re a charity, the notion of waiting for over a year to get paid is a sure way to skip the line and obtain your very own fast pass to failure.

2. Privacy Concerns:

Shouldn’t it concern you when supplying your personal information to a company that is likely subcontracting the work out  I can’t tell you how many credentialing “firms” and billing companies have approached us to be their credentialing department because they either don’t know what they’re doing and recognize our skill or because their offshore office mysteriously stopped responding to them.

3. Foundation of Practice:

Credentialing & Contracting Comes First.  Before concerning yourself with selecting a billing company, you should already be well on your way within the credentialing & payer enrollment process.  Failure to do so will ensure that you are not ready to submit claims upon opening your doors.  Payer credentialing and contracting represents a significant part of your practice’s foundation and your success or failure will be built upon it.

4. The Who & How Much Behind Your Payments:

Your payer list is what dictates which patients you can see and an experienced firm can ensure you participate with all of the right payers.  In addition to determining the who, insurance/payer agreements are also what dictates your reimbursement.  Working with an inexperienced team of professionals will result in either you missing out on patients because you’re not participating or missing out on revenue because of poor contracts.

Do Billing Companies Make Good Credentialing Partners

As you likely already know, there are dozens of billing/EHR companies out there that do credentialing/contracting as part of their billing package.  As mentioned earlier in this article, we were one of those billing companies for nearly ten of the past 15 years, so we can speak from experience.  To make this decision easier, we have put together a list of pros and cons as we see them.

Pros/Cons of Using your Billing Partner for Credentialing


  1. One company/contract for billing and credentialing which can have less upfront costs associated with it.
  2. There is or should be a vested interest in getting you credentialed and ready to bill as quickly as possible.
  3. One company and account manager to handle both services
  4. As a billing company, they can take you from the credentialing process to EDI/clearinghouse enrollment in what you would hope to be a fluid motion


  1. Billing companies often contract with an outside company for credentialing that you never know about.  You overpay for both services over the course of a year.  Typically, you will pay a minimum of .5% of your monthly collections for the “integrated’ credentialing service.  Even if a billing company says it’s “all-inclusive” you are certainly still paying for it. (.5% of revenue of 700k=$35,000 which is paid for the life of your billing contract)
  2. Often the billing company is only aware or concerned with the main payers in the area leaving a lot of patients out-of-network.
  3. Single contract for both services.  If you fire them for billing, then you also lose your credentialing vendor
  4. By being a billing company, they are legally prohibited from negotiating rates with the payers due to anti-trust laws.
  5. The billing company’s experience with credentialing is often limited to completing an online application. Very little contracting knowledge or direct points of contact at insurance companies on the credentialing side.  Billing/claim contacts do not work for credentialing
  6. When problems arise on the credentialing side such as panel closures or low rates, billing companies do not have the expertise to overcome these hurdles.
  7.  If you do run into problems with a billing company doing your credentialing, it often costs much more and takes longer to have a professional company correct the issues.
  8. Maintenance items such as Medicare/Medicaid revalidations are often overlooked as they are not their primary concern.
  9. Billing is typically outsourced(to some degree) overseas which is not a good place for your credentialing info.

Our Conclusion

In our opinion, it would be a rare occurrence where a billing company would make a better credentialing partner than an actual professional payer credentialing, start-up services company.  The most frequent misconception is that you save money by selecting an integrated credentialing/billing services partner.  As you can see above, by paying an average of .5% for the added service, you are actually overpaying by tens of thousands dollars over the course of the agreement(credentialing costs average $35,000 per year based on revenue of 700k).

At the end of the day, once you’re equipped with the information needed to make a good decision, the rest comes down to you selecting the partner that you’re most comfortable with.  There will certainly be those occasions where a billing partner makes the most sense as your credentialing vendor but you need to be sure and negotiate your billing rate without credentialing services, then add that service to your agreement for a nominal increase.