Medical Billing vs Credentialing: Understanding the Workflow That Keeps Healthcare Profitable
Running a healthcare practice involves far more than diagnosing conditions or providing treatment. Behind every appointment and procedure lies a series of administrative systems designed to keep the practice financially viable.
Two of the most important — yet often misunderstood — processes are medical billing and credentialing.
Both are essential to getting reimbursed by insurance payers. Credentialing grants providers the permission to bill. Medical billing ensures that the services they render actually lead to payment.
Despite being distinct workflows, they’re deeply interconnected. Let’s explore what each entail, how they’re different, and why managing both effectively is key to a thriving practice.
What Is Credentialing?
Credentialing is the process of verifying a healthcare provider’s qualifications. This includes their education, licensure, board certifications, work history, malpractice insurance, and more. Without it, a provider cannot participate in insurance networks — and therefore cannot legally submit claims for payment.
The Purpose of Credentialing
Insurers like Medicare, Medicaid, and private payers require credentialing to ensure that only qualified professionals provide care under their plans. This protects patients, mitigates fraud, and helps insurers comply with federal and state regulations.
Credentialing is mandatory whether you’re an individual practitioner or part of a multi-provider group. It applies to physicians, nurse practitioners, therapists, and many other provider types.
The Credentialing Process in Detail
Credentialing is a multi-phase process that typically includes:
- Document Collection
Providers must submit:
- State medical licenses
- Board certifications
- DEA registration
- Malpractice insurance
- Educational transcripts
- Employment history
All documents must be current and verifiable.
- CAQH Enrollment
Most private insurers rely on CAQH ProView to access and verify provider credentials. Keeping your CAQH profile up-to-date is essential to avoiding approval delays.
- Primary Source Verification
Payers will independently verify every submitted document by contacting original sources like medical schools and licensing boards. This ensures that all data is accurate.
- Submitting Insurance Applications
Each insurance company has its own application process. Providers must apply to every payer individually, submitting documentation according to their specific requirements.
- Approval and Enrollment
Once verified, the provider is enrolled in the payer’s network. Only at this stage can they begin billing for services delivered to covered patients.
- Re-Credentialing
Credentialing isn’t a one-time task. Most payers require re-credentialing every 2–3 years. Missing these deadlines can result in removal from the network — which halts reimbursement.
Practices often rely on Credentialing partner to stay ahead of documentation, deadlines, and communications with multiple payers.
What Is Medical Billing?
Once credentialing is completed and the provider is approved by insurance plans, the next phase begins: medical billing.
Medical billing is the process of translating healthcare services into standardized codes and submitting them to payers for reimbursement. It’s how a provider’s work turns into revenue.
Why It Matters
Without proper billing, services go unpaid — even if the provider is credentialed and the patient is covered. A strong billing system ensures timely payments, reduces denials, and supports the financial sustainability of the practice.
The Medical Billing Workflow
Medical billing involves a coordinated set of steps, each of which must be performed accurately:
- Patient Registration and Insurance Verification
Before the appointment, front-desk staff collect patient details and verify insurance coverage. This step prevents denials due to expired or invalid insurance.
- Clinical Documentation
After the appointment, the provider documents all services performed, diagnoses made, and treatments provided. These notes must be thorough and specific.
- Coding
Medical coders translate the provider’s notes into ICD-10 codes for diagnoses and CPT or HCPCS codes for procedures. Coding must match payer guidelines to ensure approval.
Organizations like the AAPC provide certification and standards for coders, which helps reduce billing errors and denials.
- Charge Entry and Claim Creation
Coders enter charges into the billing software and create claims that include the service codes, provider information, and patient details.
- Claim Submission
Claims are submitted to the insurance payer, often via a clearinghouse that pre-screens for errors. Prompt and clean submission is crucial to fast payment.
- Payment Posting and Adjustments
The payer processes the claim, pays the covered amount, and issues an Explanation of Benefits (EOB). Billing staff post payments and handle adjustments or underpayments.
- Denial Management
If a claim is denied, the billing team investigates the reason, corrects any issues, and resubmits the claim or files an appeal.
- Patient Billing and Collections
After the insurer’s payment, any remaining patient balance is billed. Follow-ups, payment plans, and communication tools can improve collections and reduce friction.
Practices often turn to revenue cycle management specialists to manage this process end-to-end and increase claim acceptance rates.
How Credentialing and Billing Work Together
Though credentialing and billing are separate functions, they are part of the same revenue cycle and must be tightly aligned.
Common Mistakes When They’re Misaligned
- Billing before credentialing is completed
→ Claims are automatically denied, leading to lost revenue and wasted time. - Using outdated credentials
→ Claims may be underpaid or rejected, triggering compliance issues. - Missing re-credentialing deadlines
→ Can cause a provider to be removed from the payer network, halting all reimbursement. - Poor communication between billing and credentialing teams
→ Creates gaps in provider data, delays claim submission, and frustrates insurers.
To avoid these issues, more practices are unifying both functions through a single vendor or team that handles all payer-facing communication and documentation.
The Case for Integrated Services
Whether you’re onboarding new providers, expanding into new payer networks, or simply trying to reduce administrative overhead, integrated credentialing and billing support is the most effective solution.
Benefits of Unifying Both Processes
- Faster provider onboarding
- Fewer delays in billing start dates
- Centralized document management
- Improved tracking of deadlines and payer updates
- Stronger revenue forecasting and fewer denials
By partnering with an experienced provider like AcerHealth, clinics and group practices can streamline their entire revenue cycle and avoid the risks of missed deadlines, denied claims, and revenue gaps.
Final Thoughts
Credentialing and medical billing are often invisible to patients — but they are vital to every dollar that enters a healthcare practice.
- Credentialing is the starting line. It ensures that providers can participate in insurance networks and submit claims legally.
- Billing is the finish line. It ensures that the care delivered is translated into timely and accurate payments.
Both must be handled with expertise and consistency. Practices that invest in integrated, streamlined workflows for credentialing and billing don’t just save time — they protect revenue, reduce denials, and gain a competitive edge in today’s evolving healthcare environment.
