Credentialing and Contracting in Healthcare
Credentialing is the process of verifying a provider’s qualifications. Contracting involves negotiating reimbursement rates and signing a binding agreement between a provider and payer. Credentialing confirms education, training, licensing for a provider to practice, while contracting enables a provider to be paid by establishing an agreement on reimbursement rates. All providers must understand the difference. Whether opening an independent practice or agency, providers must complete both to work with insurers. This facilitates network participation, efficient operations, and sustainable success. Though intricate, outsourcing credentialing and contracting to specialized companies saves providers time and money. Beyond offering quality care, credentialing and contracting processes enable providers to focus on patients.
What It Means to Be Contracted with an Insurance Company
An insurance contract transfers risk and guarantees payment of a premium. Contracts spell out terms and conditions, including the offer, acceptance, consideration, and limitations. Review carefully before signing to understand coverage and costs. They typically include an offer made through an application, acceptance often by an agent for the company, premiums as consideration for guaranteed payouts, and limitations that outline coverage parameters. Relationships can be civil, commercial, or mixed based on entities involved. E-signature is a secure, regulated process many companies now use.
Obtaining Contracts and Understanding Insurance
Providers obtain contracts through credentialing. Insurers review applications and then send contracts if accepting into networks. Retain copies to reference for standardized insurance contracts. Buyers join when suitable. Contracts financially protect against uncertainties and support better financial decision-making. Life insurance covers life; general insurance covers other losses.