Therapy & medical practices · 25 October 2026

Credentialing vs Billing: What a New Practice Needs

What each one is, the order they happen in, and what a new therapy or medical practice needs before the first claim

If you're opening a new practice, or adding your first clinicians who will take insurance, you'll hear "credentialing" and "billing" used almost interchangeably. They are different jobs, they happen at different times, and mixing them up is one of the most common reasons new practices see months of unpaid claims. This guide explains the difference and the order to do things in.

The short version

Credentialing (sometimes called provider enrollment or payer contracting) is how a clinician and practice get approved by an insurance company. It answers the question: is this payer willing to pay us, and at what rate?
Billing is how you get paid for each visit once you're approved. It answers the question: did this specific claim get paid correctly?

Credentialing comes first. Billing a payer before your enrollment is effective usually means the claim is denied or processed as out-of-network.

What credentialing involves

Credentialing is mostly a one-time project for each clinician and payer, with periodic updates. The typical pieces are:

Identifiers

NPI (National Provider Identifier). Each clinician needs an individual (Type 1) NPI. A group practice or entity that bills under its own name generally needs an organizational (Type 2) NPI too. NPIs are issued free through the federal NPPES system.
Tax ID (EIN). A group or entity bills under its employer identification number. Make sure the legal name and address match exactly across the IRS, NPPES and payer applications.
Taxonomy codes. These describe the clinician's specialty in NPPES and on claims. Choose them carefully, because a mismatch with what the payer has on file can cause denials.

CAQH ProView

Many commercial payers use CAQH ProView, a shared online profile where clinicians store their education, licenses, malpractice insurance, work history and practice locations. Payers pull from it during credentialing. CAQH requires clinicians to re-attest their information periodically (currently every 120 days), and an expired attestation can stall applications.

Payer applications

Commercial payers each have their own enrollment process. Some networks are closed to new providers in certain areas or specialties, so check before you build your business plan around a particular plan.
Medicare enrollment is done through PECOS or the CMS-855 forms. Individual clinicians, groups, and the reassignment of a clinician's benefits to a group are separate pieces.
Medicaid enrollment is run by each state, and managed Medicaid plans in that state usually require their own credentialing as well.

Contracts and effective dates

Credentialing ends with a contract (for commercial plans) or an approval letter, and an effective date. That date matters: claims for services before it may not be paid at in-network rates, or at all. Some payers allow retroactive effective dates and many don't. Keep every approval letter and note each effective date in one place.

EFT and ERA enrollment

Separate from credentialing, you'll need to enroll with each payer (or through your clearinghouse) to receive electronic funds transfer (EFT) and electronic remittance advice (ERA). Without it, payments may arrive as paper checks and remittances won't flow into your billing system automatically.

How long credentialing takes

It varies by payer, state, specialty and how complete your applications are. It's normal for it to take a few months, and some payers take longer. The practical lesson is to start credentialing as early as possible, ideally well before you plan to see insured patients, and to follow up regularly rather than waiting for the payer to contact you.

What billing involves

Once a clinician is enrolled and effective with a payer, billing is the ongoing work of turning each visit into payment:

Eligibility and benefits verification before the visit
Coding the service and diagnosis from the clinician's documentation
Claim creation and submission through a clearinghouse
Working rejections that never reached the payer
Payment posting from ERAs and EOBs
Denial follow-up, corrected claims and appeals
Payer follow-up on claims with no response
Patient balances and statements
Reporting, so the practice can see what's been billed, paid and still owed

Billing is never finished. It happens every week for as long as you take insurance. Our guide to insurance billing for therapists walks through each step in more detail.

Where credentialing and billing overlap

The two jobs touch in a few important places, and these are where new practices most often lose money:

Rendering vs billing provider. The claim must list the right NPI for the clinician who saw the patient and the group or entity being paid, exactly as enrolled with that payer.
Locations. If a clinician sees patients at a location the payer doesn't have on file, claims can deny.
New clinicians joining a group. Each new clinician must be credentialed and linked to the group with each payer before their claims will pay in-network.
Changes. A new address, name, tax ID or bank account usually has to be updated with every payer. Missed updates can stop payments.

A simple order of operations for a new practice

Form your business entity and get an EIN.
Get individual and (if needed) organizational NPIs and set taxonomies.
Complete and attest CAQH ProView for each clinician.
Apply to the payers you want to work with, including Medicare and Medicaid if relevant.
Set up your EHR or practice management system and a clearinghouse.
Enroll for EFT and ERA with each payer as approvals come in.
Record every effective date, then start billing each payer from its effective date.
Review your first payments and remittances closely to catch set-up errors early.

Do you need one company for both?

Not necessarily. Some practices hire a credentialing specialist for the enrollment project and a billing company for ongoing claims. What matters is that both know who owns which task and that enrollment details are shared accurately with whoever submits the claims.

MedBill Solutions focuses on billing: claims submission, claim tracking, denial and payer follow-up, payment posting and reporting. We don't present ourselves as a credentialing company. If you already have your enrollments in place, or a credentialing partner handling them, we can take over billing from your first claim, working inside the EHR or billing system you already use. We sign a Business Associate Agreement before we access any patient information.

Next step

Opening a therapy or behavioral health practice? See how our insurance billing for therapists service works. Opening a medical practice or clinic? See our billing for medical practices. Or send us a short enquiry. Ongoing billing starts at 3% of what we collect, and we reply within one business day.

Ready to start billing?

Once your enrollments are in place, we can take over billing from your first claim. Ongoing billing starts at 3% of what we collect. We reply within one business day.

Therapy practices → Medical practices → Send an enquiry