What is Credentialing in US Healthcare?

Credentialing is the formal process of verifying a healthcare provider’s qualifications before they are allowed to treat patients or bill insurance companies.

In simple words:

 It is the process of checking whether a doctor or provider is truly qualified, licensed, and eligible to practice.

Credentialing is an extensive vetting process. The payers will conduct a background check to verify the provider’s personal identity, schooling, experience, scope of service, licensure, claims of malpractice and criminal record.

Credentialing Specialist is a person who is responsible for maintaining the providers current credentials and licenses to work legally in their field or specialty. 

Why Credentialing Is Important

Insurance companies (like Medicare, Medicaid, BCBS, Aetna) will NOT pay claims unless the provider is credentialed with them.

Without credentialing:

• Claims get rejected

• Payments get denied

• Practice loses revenue

• Compliance risk increases

Payer Credentialing

Payer credentialing, also known as payer enrollment, is the formal process through which a healthcare provider becomes contracted with an insurance company. Once approved, the provider is considered “in-network” with that payer.

For CMCC professionals, understanding payer credentialing is critical because without proper enrollment, revenue cycle operations cannot function effectively.

Enrollment Applications

PECOS – Physician Credentialing

PECOS (Provider Enrollment, Chain and Ownership System) is the online enrollment system managed by CMS.

• It is used by physicians and healthcare providers to enroll in Medicare, update information, and maintain active billing status.

• PECOS is mandatory for providers who want to bill Medicare and receive reimbursement.

• It captures detailed provider information including:
– Licensure
– Practice location
– Ownership details
– Reassignment of benefits
– Managing employees

• PECOS enrollment ensures providers are properly credentialed and compliant with CMS regulations.

• Failure to maintain PECOS information can lead to:
– Claim denials
– Payment delays
– Deactivation of Medicare billing privileges

• PECOS plays a critical role in:
– Fraud prevention
– Transparency of ownership
– Medicare program integrity

• It is closely linked with:
– NPI (National Provider Identifier)
– Medicare Administrative Contractors (MACs)
– CMS compliance audits

• Revalidation through PECOS is required periodically to maintain active Medicare enrollment.

• Proper PECOS management is essential for smooth Revenue Cycle Management (RCM) operations.