Credentialing plays a major role in modern healthcare operations. It decides whether providers can treat patients and receive insurance reimbursement. Healthcare organizations lose money due to billing problems when credentialing is delayed. A lot of providers realize how much money they lose when claims are denied or when payments are late.
People often get more confused about delegated and non-delegated credentialing, which makes the problem worse. Providers, billing specialists, and practice administrators have a hard time figuring out who is in charge of credentialing and how it affects payment. This blog does a good job of explaining both models and helping decision-makers pick the best one based on the size of their practice, how ready they are to comply, and their revenue goals.
What is Credentialing in Healthcare?
Before a provider can bill insurance companies, they must go through the credentialing process, which checks their qualifications. It keeps patients safe and makes sure that rules are followed. Claims are denied, and payments are late if the right credentials aren’t in place.
Primary Source Verification (PSV) is part of the credentialing process. It checks credentials directly from the original sources. These sources are medical boards, schools that train people, and licensing bodies. Standard documents include records of education, training, work history, malpractice, and active licenses.
Credentialing can be done by either the insurance payer or the provider organization, depending on the model used.
Credentialing, Enrollment, and Delegation: What They All Mean
People often mix up credentialing, enrollment, and delegation, but they are not the same thing.
Credentialing is the process of checking a provider’s qualifications.
Enrollment means turning on the provider with an insurance payer and giving them effective dates.
Delegation means giving a provider organization the power to credential someone instead of the payer.
Billing delays happen when these steps are mixed up. A provider may be credentialed but not enrolled, which means that claims can’t be paid yet. This gap causes delays in getting paid and lost income.
Delegated Credentialing
When a payer gives credentialing authority to a qualified healthcare organization, this is called delegated credentialing. The delegated entity follows the rules and standards set by the payer. The payer is still in charge, even though the delegated entity does the work.
Delegated credentialing lets healthcare organizations do credentialing for insurance payers. A formal delegation agreement gives the payer the power to do this. The provider organization is now in charge of checking, following the rules, and reporting.
How Delegated Credentialing Works
Delegated credentialing works because payers sign delegation agreements. These agreements spell out what each party is responsible for, what they need to report, and what the audit standards are. Hospitals, IPAs, ACOs, MSOs, and CVOs are all examples of delegated entities.
Credentialing committees and trained staff take care of internal credentialing processes. Payers get provider rosters, and compliance is checked all the time.
Documents and data needed
Delegated credentialing needs a lot of paperwork. This includes state licenses, board certifications, DEA and CDS registrations, NPDB queries, malpractice insurance, work history, education, sanctions, exclusions, attestations, and disclosure forms. All data must be checked against primary sources and kept in credentialing files so that they are ready for an audit.
Advantages of Delegated Credentialing
Delegated credentialing makes it faster to onboard providers and gives you more control over your operations. Organizations have faster enrollment, fewer delays, and a more efficient revenue cycle. Adding bulk providers cuts down on duplicate work, and accurate directories make it easier for payers to communicate. These benefits help with cash flow and being ready to bill.
Effect of Delegated Credentialing on Finances
Delegated credentialing cuts down on the time it takes to get paid after enrolling. Faster effective dates lower the risk of losing money. The Medical Group Management Association says that delays in credentialing can cost providers thousands of dollars every day. When done right, delegation can help lower the number of days accounts receivable are open and speed up the time it takes to get the first payment.
Responsibilities of Delegated Credentialing
Delegated credentialing is responsible for compliance. If you fail an audit, don’t keep good records, don’t have enough staff, or make mistakes in your reports, you could lose your delegation status. To stay compliant, businesses need to buy credentialing software, hire trained staff, and do internal audits.
Delegated credentialing is closely watched by the government. The National Committee for Quality Assurance, the Centers for Medicare & Medicaid Services, and the Utilization Review Accreditation Commission all set standards. State agencies also make sure that people follow the rules. Regular audits make sure that credentials are correct and that patients are safe.
During audits, delegated entities are responsible. Mistakes could lead to recoupments or terminations that happen after the fact. Errors in credentialing that lead to billing mistakes raise the risk of noncompliance. Strong internal controls and getting ready for an audit lower liability.
When to Use Delegated Credentialing
Delegated credentialing is best for big practices, hospitals, IPAs, and MSOs. Delegation is most useful for organizations that have a lot of providers, a system for credentialing them, and plans for growth.
Non-Delegated Credentialing
The insurance company is in charge of all non-delegated credentialing. Providers send in applications directly, and the payer checks them and approves them.
In this model, the payer is in charge of credentialing committees, checking credentials, and setting enrollment deadlines. Providers don’t have much say over how things work.
Process of Non-Delegated Credentialing
The steps in the process are submitting an application, checking the primary source, having the committee review it, and getting approval with start dates. Timelines are often longer than 90 to 120 days.
Key Points About Non-Delegated Credentialing
Providers who don’t delegate credentialing have a lower risk of not following the rules and don’t have to do audits. But enrollment is taking longer, control is limited, and timelines are set by the payer.
It’s common for bills to be late. Claims that are sent in before the effective date are not accepted. Cash flow is messed up, and making money takes longer.
The payer is in charge of making sure that the credentials are correct. Providers are still at risk if they bill without getting approval first. There is still a lot of dependence on documentation.
Delegated vs Non-Delegated Credentialing: Comparison
| Factor | Delegated Credentialing | Non-Delegated Credentialing |
| Authority | The provider organization performs PSV | The payer performs all verification |
| Speed | Faster enrollment and onboarding | Slower, often 90–120+ days |
| Control | High operational control | Limited provider control |
| Compliance Risk | Higher for delegated entity | Lower for providers |
| Audit Exposure | Regular payer audits | Payer-managed audits |
| Best Fit | Large groups, hospitals, IPAs | Small practices, solo providers |
Conclusion
Delegated credentialing speeds up onboarding and makes it easier to grow, but it also means more compliance work. Non-delegated credentialing is safer, but it takes longer and is controlled by the payer. The size of the practice, how ready it is to follow the rules, and how much money it wants to make all play a role in choosing the right model. Making smart choices helps cash flow and long-term growth.
FAQs
Is credentialing with a delegate faster than without one?
Yes, delegated credentialing is usually faster because the provider organization checks the credentials itself. This cuts down on backlogs for payers and speeds up the onboarding process.
Can small businesses become delegated?
Small practices can be delegated, but most don’t have the staff, systems, and audit readiness that are needed. Many people find non-delegated credentialing to be more useful.
Does delegated credentialing ensure reimbursement?
No, delegated credentialing does not guarantee payment. Claims still have to meet the requirements for billing, coding, and payer policy.
How long does it usually take to get credentials?
In non-delegated models, credentialing usually takes 90 to 120 days. When done right, delegated credentialing can speed up timelines.
What will happen if a delegated body fails an audit?
If an audit fails, the person who was delegated may have to make a plan to fix the problem or lose their delegation status. This could also cause delays in payments or getting money back.
