Healthcare Credentialing and Its Importance


We understand that proper credentialing is an essential component of any functioning healthcare facility. To ensure that daily operations run smoothly, administrators must understand what credentialing is, how it is performed, best practices for credentialing, and the time and resources that may be required for fast and effective provider credentialing.

To that end, this guide will examine how proper credentialing practices can benefit your healthcare facility, as well as how credentialing affects medical providers and their patients.

Overview of the Credentialing Process

Let’s go over the basics of the credentialing process before we look at real-world examples of why provider credentialing is important for healthcare facilities.

Credentialing is the process by which a healthcare facility verifies the qualifications of prospective medical practitioners. When hiring Licensed Independent Practitioners, or LIPs, this verification process is especially important. Anyone who is “permitted by law to provide patient-care services without direct supervision” is classified as a LIP.

The legal definition of who can practice as a LIP varies by state, but it usually includes people who hold the following credentials:

  • Medical degrees
  • DO diplomas
  • Doctoral degrees
  • Doctoral degrees in psychology

Nurse practitioners are also allowed to work as LIPs in some states.

Required Things to Check Credentials

Although a degree from a medical school or another similar institution is important, it isn’t the only thing you’ll need before allowing a LIP to work in your facility. Not at all.

In fact, one of the most common complaints about the credentialing process is the sheer amount of information that must be gathered. These frequently include, but are not limited to:

  • Basic details like Name, date of birth, mailing address, and phone number 
  • Personal information such as gender, ethnicity, and social security number
  • Immunization records
  • Evidence of a positive drug test
  • A complete history of any previous malpractice claims, lawsuits, sanctions, or other disciplinary actions
  • a number of peer references
  • Number of the National Provider Identifier (NPI), username, and password
  • Evidence of ongoing medical education at an accredited institution
  • Evidence of a current professional liability insurance policy

The Duration of the Credentialing Process

Completing a thorough credentialing process for a single prospective hire can frequently take three to six months, if not longer. With so much paperwork to collect and institutions to contact and request records from, weeks can pass with little progress.

With so much documentation to go through, even a three- to six-month time frame with days or weeks of inactivity can feel like a scramble. Because of the time and resources required for even a single credentialing process, one of the credentialing issues in healthcare is that many facilities struggle to maintain a full and honest commitment to their verification processes.

Adding to these concerns is the fact that practitioners’ credentials must be renewed every two years (except in Illinois, where the timetable for credential renewals is every three years). For these reasons, many healthcare facilities hire a Credentials Verification Organization or CVO.

A CVO is a third-party company that outsources healthcare credentialing services, allowing healthcare facilities to hire more efficiently and effectively while avoiding errors.

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