Credentialing and Contracting: What New Clinics Need to Know
In the fourth article of our New Clinic Start-Up series, we are focusing on the credentialing and contracting process and what new clinics need to know. This article is designed for new clinic founders who have their business structure in place and are approximately six to eighteen months out from opening. It is also intended for providers who have never handled credentialing or contracting before, or who believe this process can occur after a clinic opens.
Providers who have never been involved in the business side of a practice are commonly confused about what credentialing and contracting involve, as well as the timelines associated with these submissions. This confusion is completely normal. In employed settings, credentialing and contracting are typically handled behind the scenes before a provider ever begins working. For those who have worked in large health systems, the process can feel even more unfamiliar.
Despite being largely invisible in employed roles, credentialing and contracting are two of the most important steps in setting up an independent clinic. These processes directly impact when a clinic can open, which health plans can be accepted, which providers are authorized to deliver care, and when the clinic can begin receiving payment for services. Credentialing and contracting are foundational to clinic operations and should never be approached through guesswork.
Understanding the Difference Between Contracting and Credentialing
One of the most common sources of confusion we see is the difference between contracting and credentialing. While these processes work closely together, they are not the same.
Contracting is the process a clinic goes through to establish its physical location within a health plan’s system. Contracting determines whether the clinic can participate with a payer and outlines reimbursement for the services provided. This process sets the foundation for how and when the clinic will be paid, making it essential to understand what is being agreed to before signing a contract.
Credentialing, on the other hand, occurs at the provider level. Credentialing is a verification process that health plans use to confirm a provider’s qualifications, licensure, education, and background. Only after credentialing is approved can a provider legally see patients under that health plan.
Once a provider is approved, the health plan issues an effective date. This date determines when services can be billed and reimbursed. Any services rendered before the effective date will not be paid. Most health plans do not backdate effective dates, with only a few exceptions.
When setting up a new clinic, health plans will start the credentialing process for the providers when the contracting request is submitted. A clinic must have at least one credentialed provider to be established within a payer system. While contracting and credentialing depend on one another, they are not interchangeable. A provider cannot be credentialed to a location that is not yet contracted, and a contract cannot be fully issued unless a provider is credentialed to that location.
Delays in contracting lead to delays in credentialing, and delays in credentialing impact clinic revenue. Once a clinic has contracts in place, adding additional providers requires only credentialing to be submitted.
When Contracting and Credentialing Should Begin
A common question we hear is when contracting and credentialing should begin. Contracting should start as soon as the clinic has its Tax Identification Number, organizational NPI, physical location, business bank account, and CLIA certification if applicable. At this point, the clinic’s business structure should already be established.
Contracting should occur before the clinic opens, as contracts must be in place for services to be reimbursed. Credentialing for providers submitted alongside the initial contract request occurs at the same time as contracting.
For clinics that already have contracts in place and are credentialing new providers, planning ahead is critical. Credentialing should begin as soon as a provider is confirmed to be joining the clinic. Collecting documentation and obtaining liability insurance alone can take weeks, depending on provider responsiveness and insurance processing times.
Clinics should aim to hire providers at least two to three months before their intended start date and begin credentialing immediately. Facilities should also be operationally ready, as some health plans conduct site visits as part of the approval process.
Contracting Timelines and What Impacts Them
Contracting timelines vary widely, but clinics pursuing their own contracts without support often experience timelines of eight to twelve months. Medicare approvals alone can take at least thirty days and must be completed before a Medicaid submission, which can take another thirty days for a clean application. Many commercial health plans take sixty to one hundred twenty days for approvals.
If errors occur or documents are missing, timelines are reset. The most common causes of delays include incomplete submissions, missing documentation, or incorrect information on contract request forms.
When clinics work with experienced support, timelines are often reduced to four to seven months. This also allows time for contract negotiations, which can significantly impact reimbursement. Negotiating contracts is highly recommended, as improved reimbursement rates can offset the cost of support over time. Organizations like Integrity Health Network also maintain relationships with payer representatives, which can lead to more efficient communication and improved outcomes.
Contracting is rarely fast and should never be rushed. Once applications are submitted, clinics are dependent on health plan review processes.
Credentialing Timelines and Provider Considerations
Credentialing timelines are often underestimated. Providers submitting credentialing applications independently with limited experience can expect timelines of ninety to one hundred twenty days or more for initial credentialing. Medicare approval typically takes at least thirty days and must be completed before Medicaid submission, which may take another thirty days for a clean application. Some commercial plans require both government approvals before credentialing can begin.
In Minnesota, clean credentialing applications are required by law to be processed within thirty days. However, a single error restarts the timeline. Credentialing requirements vary by payer, making this process complex and detail-driven.
Credentialing directly determines whether a provider can see patients and be reimbursed. Hiring a provider who is unable to practice for months due to credentialing delays can significantly impact clinic operations and finances. Planning ahead and submitting applications well before start dates is essential.
There are also multiple types of credentialing applications, including initial credentialing, recredentialing, provider location additions, and delegated credentialing. Understanding which type applies helps determine timelines. Provider location additions, for example, typically take thirty to forty-five days when submitted correctly.
At Integrity Health Network, our average turnaround time for initial credentialing is sixty to ninety days due to experience, tracking systems, and submission accuracy.
Common Mistakes That Delay Approval
The most common reason for credentialing and contracting delays is incomplete or inaccurate information. Even a single incorrect number or missing document can result in denial. Applications must include complete employment histories, education records, and supporting documentation just to name a few.
Submitting applications before requirements are met, such as submitting before Medicare or Medicaid approval when required, is another frequent mistake. Underestimating review cycles is also common. Even with support, approvals do not occur within weeks.
Failing to track submissions, follow-ups, and approvals creates additional delays. This process is time-intensive and often exceeds the capacity of clinic administrators who are managing multiple responsibilities.
Why Credentialing and Contracting Directly Impact Revenue
Credentialing and contracting approvals directly determine when a clinic can bill and receive payment. Claims submitted before effective dates will not be reimbursed. Delays in approval create cash flow gaps that can strain a new clinic financially.
Understanding timelines and planning early helps reduce financial stress and allows clinics to open with realistic expectations around revenue.
The Value of Guidance and Support
Guidance is especially valuable during credentialing and contracting. Experience reduces errors, improves turnaround times, and ensures accurate submissions. Support also relieves administrative burden from clinic leadership and staff.
Support in contracting can also include negotiation, which may result in improved reimbursement rates. While support services involve upfront costs, clinics often benefit from faster approvals, reduced rework, and stronger long-term financial outcomes.
Looking Ahead
Credentialing and contracting are two of the most critical processes in setting up an independent clinic, yet they are often the least understood. These steps directly affect when a clinic can open, which patients can be seen, and when revenue can begin flowing. While the process can feel complex and time-consuming, understanding how credentialing and contracting work, along with the timelines involved, gives you greater control and helps prevent unnecessary delays and financial strain.
You do not need to know every detail on day one, but you do need to understand how these processes fit into the larger clinic start-up timeline. Planning early, submitting accurate applications, and allowing enough time for approvals are key to avoiding disruptions once your clinic is ready to operate.
In the next post in this New Clinic Start-Up series, we will break down what happens after credentialing and contracting are approved, including enrollment, billing setup, and what clinics should expect as they prepare to submit their first claims.
This series is designed to help you move through the start-up process with clarity and confidence. Learning early allows you to make informed decisions, reduce risk, and build a stronger foundation for long-term success as an independent practice.
As part of our commitment to independent medicine, Integrity Health Network supports clinics by helping them navigate complex processes like credentialing and contracting so they can focus on building sustainable practices.
