How credentialing affects eligibility checks and claims

Eligibility checks and claims are core parts of the revenue cycle – how providers get paid.

Eligibility checks verify a patient’s coverage and benefits. They also help providers estimate patient responsibility – what the patient owes the provider for care. Claims bill the insurer – called the payer – for the rest of what’s owed for that care.

Provider credentialing is separate and isn’t directly related to either. But without it, many payers won’t return eligibility data or process claims for the provider.

This guide explains what credentialing is, how it works, and how it affects eligibility checks and claims.

What is credentialing?

Credentialing is how a payer checks that a healthcare provider is qualified to practice. The exact steps vary by payer, but most review the provider’s:

• Education and training

• Active medical or dental licenses

• Board certifications

• Work history

• Malpractice insurance

• Past sanctions or serious issues

Credentialing typically takes 90-180 days to complete.

Stedi doesn’t handle credentialing. Providers typically reach out to the payer directly or work with a credentialing service.

Payer enrollment

Credentialing is part of a larger process called payer enrollment. Payer enrollment covers everything a provider needs to do to accept insurance from a payer.

In addition to credentialing, payer enrollment usually includes contracting, where the provider signs an agreement with the payer. As part of the agreement, the provider accepts the payer’s payment rates and terms for specific procedures or services.

Once the provider signs an agreement with the payer, they’re considered in-network for one or more of the payer’s network of providers.

Transaction enrollment

Payer enrollment can also involve transaction enrollment. Transaction enrollment is the process of registering a provider to exchange specific electronic transactions with a payer.

All payers require transaction enrollment for Electronic Remittance Advice (ERAs). For other transaction types, it varies by payer.

Credentialing vs. transaction enrollment

Transaction enrollment is a separate, distinct process from credentialing. In most cases, you’ll need to complete credentialing and payer contracting before you can complete transaction enrollment with a payer.

Recredentialing

Credentialing isn’t a one-time event. Payers regularly re-review each provider’s credentials – a process called recredentialing. Recredentialing is also known as revalidation, reverification, or credentialing renewal.

During recredentialing, the payer usually verifies that the provider’s:

• Licenses are still active

• Certifications are still valid

• Malpractice insurance coverage is current

• No new sanctions or serious issues have occurred

It may also require attestations – or confirmations from the provider – that information on file with the payer is still accurate.

Who initiates recredentialing?

Payers tend to initiate recredentialing. Most track when a provider’s credentialing period is about to expire. The payer then sends a notice or request updated information before the deadline.

The provider is responsible for responding, submitting updated documents, and completing any required attestations.

If the provider doesn’t respond or complete their recredentialing in time, the payer may suspend payments to the provider or remove the provider from their network.

How often is recredentialing required?

Recredentialing timelines vary by payer. Most payers require recredentialing providers every 3-5 years.

Medicare

The Centers for Medicare and Medicaid Services (CMS) – the government payer for Medicare – requires recredentialing:

• Every 3 years for providers of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS)

• Every 5 years for other providers

Medicaid

Medicaid programs are state-run, so credentialing requirements vary by state.

Most state Medicaid programs follow the same guidelines as Medicare and require recredentialing:

• Every 3 years for DMEPOS and other high-risk providers

• Every 5 years for other providers

Commercial payers

There’s no federal law mandating specific recredentialing requirements and timelines for commercial insurance plans, like those offered by employers.

The National Committee for Quality Assurance (NCQA) is a nonprofit that sets quality standards for health plans. Most commercial payers follow NCQA standards, which require recredentialing every 3 years (36 months). 

How credentialing affects eligibility checks

Many – but not all – payers require a provider to complete credentialing before they’ll run eligibility checks using the provider’s National Provider Identifier (NPI).

If you attempt to run eligibility checks with these payers before completing credentialing, you may get back a AAA error in the 4x range, such as 43 (Invalid/Missing Provider Identification) or 41 (Authorization/Access Restrictions), or AAA error 51 (Provider Not on File).

For example, a JSON Real-time Eligibility API response with AAA error 51:

{
  "errors": [
    {
      "code": "51",
      "description": "Provider Not on File",
      "field": "AAA",
      "followupAction": "Please Correct and Resubmit",
      "possibleResolutions": "Provider is not registered with the payer; provider must contact payer directly to register their NPI.",
      ...
    }
  ],
  ...
}

If you get one of these errors, you’ll need to contact the payer to complete credentialing before you can run eligibility checks.

How credentialing affects claims

In most cases, if you submit a claim for a provider who hasn’t completed credentialing with the payer, the payer will reject the claim. If the provider failed to complete recredentialing, the payer may process the claim but suspend payment.

If you’re unsure if a provider has completed credentialing or recredentialing, you can run an eligibility check using the provider’s NPI before submitting the claim. If the eligibility check returns one of the AAA errors outlined above, the provider will need to complete credentialing first.

Important: This method isn’t 100% guaranteed – some payers will return eligibility data even if the provider hasn’t completed credentialing.

Running eligibility checks before submitting a claim has some other benefits:

• You can verify the patient was covered by the payer’s plan on the date of service.

• You can ensure the patient’s demographic information – like name and gender – and contact information are correct.

Get started with Stedi

Stedi offers fully managed, API-based transaction enrollment, where we handle most of the enrollment paperwork for you.

We also offer a free Basic plan, which lets you run up to 100 eligibility checks and submit up to 100 claims for free each month.

Sign up to get started. It takes less than 2 minutes – no credit card required.