Unlocking Healthcare Revenue: How Medical Billing and Credentialing Work Together

In the world of healthcare, few things are more frustrating than delivering excellent patient care — only to struggle with getting paid. Unfortunately, this is the reality for many providers and practice managers who aren’t fully clear on how credentialing and medical billing work, or how deeply connected they actually are.

These two administrative processes play distinct but equally critical roles in a practice’s financial health. One determines whether a provider is even allowed to submit claims. The other determines whether those claims will result in payment.

Let’s unpack how both works, how they’re different, and why mastering them is key to improving your revenue cycle management.

Credentialing: Gaining the Right to Bill

Before a provider can bill any insurance company — whether Medicare, Medicaid, or a commercial payer — they must be properly credentialed. This is the formal process that verifies their education, licensure, board certification, and legal eligibility to treat patients and submit claims. (See NCQA Credentialing Standards).

Think of credentialing as the green light from insurers. Without it, the rest of your revenue cycle can’t even begin.

What the Credentialing Process Looks Like

The credentialing process is highly structured. Here’s a breakdown of how it works:

1. Document Collection

Providers must submit a wide range of documents, including state licenses, DEA certificates, board certifications, malpractice insurance, educational records, and complete employment history. All this data must be accurate and up to date.

2. Enrollment via CAQH

Most commercial payers use CAQH ProView to access provider credentials. It’s a centralized database where providers create and maintain their profiles.

This system helps reduce duplication and allows multiple insurers to verify information from a single source. Keeping CAQH updated is one of the best ways to prevent delays in approvals.

3. Primary Source Verification

Payers go a step further by verifying each credential with the original source — whether that’s a state licensing board, medical school, or certification body. This ensures accuracy and protects against fraud.

4. Individual Payer Applications

Each insurance company has its own forms and approval processes. Submitting accurate, complete applications — and tracking responses — is a time-consuming but vital task.

5. Network Participation Approval

Once approved, the provider is enrolled in the insurer’s network and assigned a billing ID. Only then can they begin seeing patients under that payer and submitting claims.

6. Re-Credentialing

Credentialing is not a one-time event. Most insurers require it to be renewed every 2–3 years. Failing to re-credential on time can result in claim denials or suspension from the network.

Managing all of this for multiple providers and payers can be overwhelming. That’s why many practices turn to Outsourcing, which offers end-to-end credentialing services to speed up approvals and reduce administrative strain.

Medical Billing: Turning Services into Payments

Once a provider is credentialed and approved by insurers, they can begin delivering care and, more importantly, getting reimbursed.

Medical billing is the structured process of collecting revenue from insurance companies and patients based on the services performed during a patient visit.

A Closer Look at the Billing Cycle

Medical billing is much more than simply submitting a claim. It includes:

1. Patient Intake and Insurance Verification

Before the visit, staff collect demographic and insurance information, and verify that coverage is active and applicable to the services being provided.

This helps prevent future denials due to ineligibility or coverage exclusions.

2. Clinical Documentation and Coding

After the visit, the provider documents the encounter in the EMR. Coders then translate this into standardized codes: ICD-10 for diagnoses and CPT/HCPCS for procedures.

Correct coding, as outlined by the American Academy of Professional Coders (AAPC), is crucial to ensure claims are processed accurately and quickly.

3. Claim Submission

The codes, charges, and patient details are compiled into a claim and submitted electronically to the insurance company. Many practices use a clearinghouse to check for formatting issues before submission.

4. Payment Processing

After reviewing the claim, the insurer issues payment and sends an Explanation of Benefits (EOB) that outlines what was paid, adjusted, or denied.

5. Denial Management

Denied claims must be carefully reviewed, corrected, and resubmitted. In some cases, a formal appeal is required.

Strong denial management helps reduce revenue leakage and ensures your practice gets paid for the care it provides.

6. Patient Collections

Any unpaid balances — including co-pays and deductibles — are billed to the patient. Practices that offer multiple payment options and follow up professionally typically see better recovery rates.

Providers using services like integrated billing solutions benefit from higher first-pass claim acceptance and faster turnaround times on insurance reimbursements.

Credentialing and Billing: Separate Tasks, Shared Consequences

While credentialing and billing are distinct processes, they’re tightly connected — and gaps in one will inevitably affect the other.

Let’s look at a few real-world examples:

Billing before credentialing is approved
→ The claim is denied automatically, and your practice doesn’t get paid.
Credentialing delays
→ A new provider joins the practice but can’t see insured patients or submit claims for months.
Missed re-credentialing deadline
→ The provider is dropped from the network without notice, halting all reimbursements until re-approved.
Poor communication between teams
→ Claims go out with outdated provider IDs or incomplete enrollment status, leading to unnecessary denials.

When you understand how closely tied these systems are, it becomes clear: they must be managed together — not in isolation.

Where Most Practices Struggle

It’s common for small or midsize practices to assign credentialing and billing to separate staff, or even part-time roles. This can work short term — but as the provider roster grows or payer requirements evolve, things quickly become unmanageable.

Here are some of the most common pitfalls:

Tracking multiple payer requirements manually
Failing to maintain current documentation for each provider
Overlooking payer communications requesting updates or corrections
Ignoring aging reports that flag unresolved denials
Billing for services that aren’t yet credentialed

Over time, these small errors snowball into serious cash flow problems, staff burnout, and patient dissatisfaction.

The Case for Unifying Credentialing and Billing

Forward-thinking practices are shifting to a unified approach where billing and credentialing are handled by the same expert team or service provider. Why? Because it simplifies workflows and eliminates the guesswork.

The benefits of integration include:

Smoother onboarding for new providers
Fewer delays in billing eligibility
Better tracking of credentialing expirations
Consistent communication with insurance payers
Higher claim approval rates

At AcerHealth, we’ve seen firsthand how combining both services allows for better alignment between payer requirements and billing accuracy. When there’s one point of accountability, practices spend less time chasing paperwork and more time focusing on patients.

Final Thoughts

You can’t afford to think of credentialing and billing as separate silos. They are two parts of the same revenue engine.

Credentialing gets you in the game.
Billing turns your work into income.

If either process fails — whether through delays, documentation gaps, or disorganization — your practice suffers financially. But when both are managed cohesively, your revenue cycle becomes more reliable, more efficient, and better aligned with your growth goals.

Investing in a unified approach to credentialing and billing isn’t just smart — it’s essential to building a sustainable, high-performing healthcare business.