Credentialing Corner

# Insurance Credentialing for Therapists: Your Complete Guide

- November 11, 2024
- Posted by Brian Bertrand

31 Oct

Therapists often wonder how to navigate the process of insurance credentialing. It can be seen as overwhelming. However, it is possible with the right approach. The process of getting credentialed with any insurance company is important for a therapist. This is particularly important whether you are a beginner in private practice or an experienced therapist. You need to be familiar with the process of insurance credentialing for therapists. On the other hand, it can help you get more clients. It is important to understand the major factors to consider while addressing the issue of credentialing for therapists.

## What is Insurance Credentialing for Therapists?

Credentialing for therapists is an integral part. It is a process that approves the capability of a therapist by assessing their qualifications. This encompasses education, licensing, experience, and the overall professional background of the therapist. If one is granted insurance credentialing, that person is said to belong to the networks of the insurance provider as a therapist. This is because it can be possible to reach more clients as the therapy becomes cheaper and accessible to the clients. Clients get benefits from the insurance credentialing of therapists.

## Why Should Therapists Get Credentialed?

Therapists must get credentials from an insurance company. There are many reasons and benefits of insurance credentialing for therapists. First, it can help you expand your client base. When you are credentialed by an insurance company, the company can provide coverage for more clients. It can help your clients to seek psychotherapy. This way, you will be able to access more clients. People who cannot afford psychotherapy can reach out to you because you will be credentialed by an insurance company.

Moreover, it can also help you improve your status. When you have membership of insurance panels, it helps you to improve your image as a provider. Your credentials will make your practice more valuable and appreciated.

One of the most prominent benefits of the credentialed therapist is that their referrals are boosted. The insurance company prefer those therapists who are part of their membership. They direct their clients only to the therapist from their network.

The insurance credentialing for therapists will boost your economic security. The in-networking is improved because it can guarantee a regular stream of clients. In-network services can provide steady client flow compared to out-of-pocket clients.

## Researching Insurance Companies for Credentialing

Selecting a company for credentialing is a crucial task. It is important because it can help you save a lot of time. If you are a therapist, not all companies will be a good fit for you. You should avoid wasting your time on a company that does not accept new providers. Always go for the companies who have the capacity for therapists in their panel. When you choose the wrong company it can lead you to poor reimbursements, fewer clients, and other issues. Be strategic while researching and selecting an insurance company for credentialing.

## Questions to Ask When Researching Insurance Panels

It is necessary to ask the right questions while researching for an insurance company for credentialing. Here is a checklist for you:

### 1. What’s the demand for certain insurance plans in your area?

- Do people in your community use this insurance?
- Is this insurance commonly accepted by other therapists?
- Are potential clients asking if you take a specific insurance plan?

Knowing the demand helps you prioritize which insurance companies to target first. For example, if you’re practicing in an area where Medicaid is widely used, it’s smart to focus on Medicaid credentialing.

### 2. What are the reimbursement rates?

Reimbursement rates vary from one insurance company to another. You need to know:

- How much will they pay per session?
- Do they reimburse less than your standard fee?
- Are there limits on how many sessions will be covered?

Low reimbursement rates can make it hard to maintain a sustainable practice. Always check the company’s rates before applying.

### 3. Is the insurance company accepting new therapists in your field?

Some insurance companies may have enough therapists on their panel and might not be accepting new providers. If they’re not adding therapists in your specialty or area, your application might be rejected.

- Check their website or call to ask if they’re accepting new therapists.
- Make sure your specialty is in demand with that particular company.

## Steps to Insurance Credentialing for Therapists

Once you have researched the potential insurance panel in your area, you should proceed with the application process. Credentialing is a complex process. But when you know the right steps, it can be turned out simple. To simplify these steps, follow this guide for credentialing.

#### A. Verify Your Qualifications

When you find the most popular insurance company of your interest, then prepare yourself to meet their credentialing requirements and verify your qualifications. You may need the following things for further processing.

- Proper licensure
- Proof of malpractice insurance.
- Necessary certifications
- Additional training.

#### B. Gather Required Documents

Once you meet their qualification criteria, you must ensure that you possess all the necessary documents. Usually, every insurance company asks for professional degrees and licenses. Your resume will be required along with malpractice insurance. Here is the list of necessary documents.

- Professional licenses and degrees.
- Resume or CV.
- Proof of malpractice insurance.
- National Provider Identifier (NPI) number.
- Copies of certifications or any specialized training.

#### C. Submit Your Application

The next important step is to submit your application. You can apply to the insurance companies directly on their websites. However, you can also go for a third-party service. Some services do all the cumbersome and will ask for a payment. Pick whichever option works the best for your time and finances.

#### D. Follow Up

The process of insurance credentialing for therapists is complex and lengthy. It takes a lot of time to verify and process. Usually, insurance companies will take 60 to 100 days for the application process. However, it can also exceed 120 days. But it is always better to be on the safe side, so you should keep checking regularly for any updates.

#### E. Sign the Contract

After your application is accepted and approved by the insurance panel, you will be asked to sign the contract. The contract will outline the necessary detailing of billing codes, reimbursement rates, and other necessary information. Moreover, the contract can also include any other agreements between you and the insurance company.

## Understanding the Credentialing Process

While credentialing can improve your status as a therapist, it can also become a hectic process because it involves a thorough review of your professional background. To meet the standard of a reputable insurance company, you need to be able to fulfil their strict criteria. Here is a glimpse of their requirements and verifying standards for confirming your credentials.

### 1. Primary Source Verification

The insurance companies are vigilant about their standard. They verify your licenses and degrees directly from the institutes which issue the documents. This way, your credibility as a therapist to meet their standard is ensured.

### 2. Background Check

Their reviewing panel is strict in identifying any malpractice. They carefully review the disciplinary actions of the therapist. Insurance companies can reject any application based on malpractice.

### 3. Panel Capacity

Insurance companies provide credentialing when their criteria are fulfilled. However, if their provider panel is full in your area, they may not accept your application. The panel capacity is necessary to become part of the membership.

## Common Challenges Therapists Face During Credentialing

Now that you know the process of insurance credentialing for a therapist, you might have an idea that it is not an easy process and has many roadblocks. Some expected challenges are predetermined here for you so you can plan your process smoothly.

### 1. Waiting Time

The most common challenge of credentialing is long and undetermined waiting duration. It can take months. If you want to be credentialed, so you should start as early as possible. When you start the process early, you will have the time to wait and avoid delays in your practice. If you are still wondering about why this credentialing process is so time taken then read our interlinked blogs.

### 2. Incomplete Applications

While it is necessary to be vigilant when submitting documents, therapists often make mistakes and miss any document. You should double-check your documents and then proceed with the paperwork to avoid any delay.

### 3. Rejected Applications

When the application is rejected by an insurance company, you can ask for feedback. Feedback can help you in resubmissions. However, small corrections might be helpful to fix your issues.

## Tips for a Smooth Credentialing Process

To make your credentialing process smooth and easy, you can follow these steps. Streamline your credentialing process by using these tips.

1. Stay organized and keep your documents easily accessible.
2. Use digital folders and label specific documents to get it handy.
3. Select multiple panels to apply so that your chance of approval is improved.
4. Try using a credentialing service to manage your paperwork.

## Credentialing for Therapists: What Insurance Companies Look For

The criteria for credentialing may differ from one insurance company to another. However, there are a number of factors that are common:

- Make sure that your state licensure is active and current.
- Some insurance companies will want to enlist therapists with a couple of years of experience or more.
- Areas of focus such as trauma, marriage therapy, or even behavioral therapy, stand a higher chance of acceptance.
- Insurance companies want to make sure that the therapists in question do not have claims of malpractice or any disciplinary actions against them.

## How to Compare Insurance Companies for Applying

You can compare the reputation of the company. Reviews from therapists can help you evaluate the reputation of different insurance companies. Try to know the processing time of the company for credentialing. It can save you a lot of time. Compare the potential client base of the insurance company to know whether you will be able to serve potential clients or not by becoming a part of their panel. These are some ways through which, you can compare insurance companies for credentialing.

## The Difference Between Credentialing and Contracting

Although the processes of credentialing and contracting tend to be very closely related, credentialing involves the process of checking your qualifications while the contracting process comes later. Once the approval is given, the contract becomes an agreement that stipulates the terms of the payment for the services given, payment rates as well as the services that you will offer. Edits and modifications of the contract are encouraged to be done prior to the final signature. It is necessary to review the contract carefully before signing it.

## In-Network VS Out-of-Network Therapist

Comparing in-network therapists and out-of-network therapists comes with both pros and cons. If you are wondering whether in-network therapist is beneficial or out-of-network. The answer is simple because it depends on your preferences.

If you are looking for a huge clientele, in-network is best for you because clients are more inclined towards in-network therapists as they have lower charges. While out-network can decide their own rates and have high charges.

If you want to avoid paperwork, out-network will work for you. Because when you apply for insurance credentialing for a therapist, it comes with lengthy paperwork. In that case, you will miss referrals from insurance panels. When you are credentialed, your worth becomes more due to your increased credibility. You can have a steady income while promoting a positive impact on your client’s life.

## Get The Most Out of Insurance Credentialing for Therapists

When you are credentialed, you should make sure that you add the information on your directories. If you own a website, you should mention your credentialing on it. Clients often seek those therapists who are taking their insurance. Update your profiles with the necessary credentialing information. It is very crucial for your growth as a credentialed therapist. You should also understand the billing process. It can save you a lot of time. You can also hire a lawyer for further clarification.

## Final Thoughts

To summarize, insurance credentialing for therapists is important for increasing the credibility of the therapist. It helps in boosting referrals and widen the clientele. The process is time-consuming. With the right guidance, the application process and acceptance can be easily completed. It is necessary to find the best insurance company and understand their requirements for the therapists. Credentialing for therapists provides long-term benefits and enhances the status of therapists. You can also know the requirements for Physical Therapists here.

## Frequently Asked Questions (FAQs)

### 1. Is there any difference between insurance credentialing for therapists and insurance credentialing for physical therapists?

The significant difference can be found in the scope of both professions. Their treatment plans and billing codes are different. However, the procedure is somewhat similar for eligibility, certifications, and licensure.

### 2. What is the duration of the credentialing process?

Usually, the credentialing process takes 60 to 120 days. However, the period can be changed because it is also dependent on the insurance company you are applying for. To prevent any delay, it is best to apply early.

### 3. What should I do in case of application rejection?

In the event of your application being turned down, you may either ask for feedback and see where the process gone wrong. You can reapply after addressing the issue of your rejected application. It is good to solicit a response from the insurance company to establish how best you can present the application next time.

### 4. Am I going to be required to reapply for credentialing after some time?

Yes, recredentialing is a standard procedure most insurance companies require after every two to three years. The process of recredentialing is generally shorter. However, you will be required to present some papers and verify your eligibility.

### 5. What are some biggest insurance panels?

It depends on your area of practice and clients. You can also identify popular insurance panels in your locality. Some of the biggest names are:

- Tricare
- BCBS
- Aetna
- Medicare

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