Medical Billing and Credentialing: The Two Pillars of a Profitable Healthcare Practice

Behind every successful medical practice is a financial foundation that supports the delivery of quality care. That foundation relies heavily on two complex but essential processes: medical billing and credentialing.

They’re often confused or lumped together under “back-office operations,” but in reality, each plays a distinct role. Credentialing ensures a provider is authorized to participate in insurance networks. Medical billing ensures that once care is delivered, the practice gets reimbursed.

Neglecting either process — or failing to align them — can have serious revenue consequences.

In this article, we’ll explain how these two systems work, why both are critical, and what healthcare leaders can do to manage them more effectively.

Credentialing: The First Step Toward Payment

Credentialing is the process by which insurance companies verify that a provider is fully qualified to treat patients. It’s a gatekeeping mechanism — one that protects the integrity of insurance networks and ensures compliance with state and federal healthcare regulations.

Until credentialing is complete, a provider cannot bill an insurance payer for services — no matter how experienced or skilled they are.

What Credentialing Involves

The credentialing process includes several detailed steps:

1. Collecting Credentials and Licenses

Providers must submit medical licenses, board certifications, malpractice insurance, work history, education verification, and any disciplinary records. Everything must be current, accurate, and traceable.

2. Creating and Maintaining a CAQH Profile

Most major insurers use CAQH ProView to collect and review provider credentials. Maintaining a clean, up-to-date profile on this platform helps expedite payer approvals.

3. Verification from Primary Sources

Payers independently verify every piece of submitted documentation with the original source. This means contacting state medical boards, universities, and other certifying bodies to confirm the information is correct.

4. Submitting Payer Applications

Providers must apply individually to each insurance company they want to bill. These applications vary widely and may require additional supporting documentation.

5. Approval and Network Participation

Once the payer has confirmed all credentials and approved the application, the provider is added to the network and can begin seeing patients and submitting claims.

6. Re-Credentialing

Credentialing is not a “set it and forget it” process. Most insurers require re-credentialing every 2–3 years. If a deadline is missed, the provider could be removed from the network — meaning no claims will be paid until the credentialing is re-established.

Efficient credentialing is a must for revenue continuity. That’s why practices often turn to professional credentialing services, which handle documentation, tracking, and payer follow-up on your behalf.

Medical Billing: Turning Services into Revenue

While credentialing gives a provider the right to bill, medical billing is the process that ensures those bills are created, submitted, and reimbursed properly.

Billing is a complex, detail-driven workflow that captures the care provided to a patient and communicates it to insurance companies in a language they understand — codes, modifiers, and charges.

The Steps of Medical Billing

Here’s a closer look at the typical billing cycle:

1. Patient Intake and Insurance Verification

Before care begins, front office staff collect demographic and insurance information. They confirm coverage and note any co-pays or pre-authorizations required.

This step prevents denials based on expired policies or non-covered services.

2. Coding the Encounter

Once the visit is complete, medical coders review the provider’s notes and assign ICD-10 codes for diagnoses and CPT or HCPCS codes for services. According to AHIMA, this step is crucial for reimbursement accuracy and audit defense.

3. Creating the Claim

The coded encounter is entered into the billing software, combined with the provider’s credentials, the facility information, and the payer-specific data required to build a complete claim.

4. Submitting to the Payer

Claims are sent electronically through a clearinghouse or payer portal. Most systems include basic validation checks to prevent common formatting errors.

5. Payment Processing and Posting

The insurance payer processes the claim and issues an Explanation of Benefits (EOB). The billing team applies the payment, notes any adjustments, and initiates billing for any patient balance.

6. Denial Follow-up and Appeals

If a claim is denied, the reason must be investigated. This may involve correcting coding errors, submit additional documentation, or file a formal appeal. Denial resolution is one of the most important parts of the billing process — and one where many practices lose money unnecessarily.

7. Billing the Patient

If the patient owes part of the bill (due to a deductible, co-insurance, or service exclusion), the billing team issues a statement and manages follow-up communication.

A reliable medical billing workflow minimizes denials and maximizes collections. That’s why many practices opt for specialized billing solutions, which are designed to streamline the revenue cycle and ensure payments arrive on time.

The Link Between Credentialing and Billing

Credentialing and billing are sequential — credentialing must happen before billing begins. But they are also ongoing and interconnected processes that must be carefully aligned for a practice to succeed.

Here’s what can go wrong when they’re not:

• Billing before credentialing is complete
  → Claims are denied automatically, delaying cash flow.
• Failing to track re-credentialing deadlines
  → Results in lost network participation and unpaid claims.
• Billing under the wrong provider or with outdated credentials
  → Triggers compliance issues and payer audits.
• Separate teams with poor communication
  → Leads to claim errors, missed enrollments, and misaligned payer data.

The consequences range from revenue delays to long-term damage in payer relationships.

Why Practices Choose Integrated Support

Managing credentialing and billing in-house requires expertise, time, and absolute attention to detail. For most practices, especially those growing rapidly or managing multiple providers, this can become overwhelming.

That’s why a growing number of organizations are choosing to outsource both services under a single partner. An integrated approach offers:

• One point of contact for all credentialing and billing questions
• Tighter control of timelines and documentation
• Unified communication with payers
• Faster provider onboarding
• Improved billing performance and fewer denials

Final Thoughts

Credentialing and medical billing may happen behind the scenes, but they drive everything a practice depends on: access to patients, steady cash flow, and operational success.

Credentialing gets you in the door.
Billing ensures you’re paid for walking through it.

When both systems run smoothly and work in sync, providers are empowered to focus on what they do best — delivering high-quality care. And when they don’t, the business side of healthcare suffers.

To keep your practice compliant, competitive, and financially strong, you need both credentialing and billing handled with care, strategy, and precision.