Difference Between Credentialing and Privileging in Healthcare

Healthcare professionals like you are entrusted with the responsibility of delivering safe and competent care to patients. But how do facilities ensure that you meet the required standards? Two key processes—credentialing and privileging—serve this purpose, yet they are often misunderstood or used interchangeably. 

While both are critical for maintaining quality and compliance in healthcare, their objectives, processes, and implications differ. This blog explores the nuances of credentialing vs. privileging, explaining their roles, interconnections, and challenges while offering insights into compliance with CMS requirements and modern solutions for efficiency.  By understanding these processes, physical therapists and clinicians can appreciate their importance in ensuring safety, trust, and operational excellence.

Understanding Credentialing in Healthcare

Credentialing is the process of verifying your qualifications, which include education, training, and licensure. This systematic approach ensures that only those who meet specific standards are allowed to provide care to patients. 

Credentialing involves thorough checks by insurance companies and healthcare organizations like hospitals and clinics to confirm that practitioners possess the necessary skills and knowledge required for their roles. The main question is, 

Why is Credentialing Important?   

The primary purpose of credentialing is to ensure that healthcare providers like you are qualified and competent, thereby safeguarding your patient safety. By verifying credentials, healthcare facilities protect themselves from potential liabilities associated with malpractice or negligence. This process enhances the quality of care and helps maintain the integrity of the healthcare system as a whole.

What are the Steps of the Credentialing Process?   

Understanding the steps in credentialing empowers healthcare providers to maintain high standards of care, expand their professional opportunities, and protect their practice from potential risks. It typically involves several key steps:

1. Application Submission: You begin by submitting an application that includes detailed information about your education, training, work history, licenses, certifications, and references.
2. Verification: This step involves confirming the accuracy of the information provided. Credentialing entities directly contact educational institutions, licensing boards, and previous employers to verify credentials, and this is known as Primary Source Verification (PSV). It is essential to ensure that the claims made by applicants are accurate.
3. Review: After verification, a credentialing committee composed of experienced healthcare professionals reviews the gathered information. They assess whether the applicant meets established standards for practice based on their qualifications and experience.
4. Approval: The committee makes a final determination regarding the applicant's credentials. If approved, the professional is granted permission to practice; if not, they are notified of any concerns and may have the opportunity to address them.
5. Ongoing Monitoring: Credentialing does not end with initial approval. Continuous monitoring of a provider’s credentials ensures they remain current and compliant with state regulations and organizational policies. This includes tracking license renewals and any disciplinary actions. 
6. Fees: The average cost for credentialing for an individual practitioner ranges from $100 to $200. You can expect to pay between $200 and $500 every two years for license renewal.

Suggested read: A Guide to Credentialing for New Physical Therapy Owners

Credentialing ensures that healthcare providers meet baseline qualifications. However, ensuring they can competently perform specific tasks requires an additional layer of evaluation—privileging.

What is Privileging in Healthcare?

Privileging is a process that allows you to perform specific procedures based on your credentials and skills. This process is essential because it ensures that each provider has the necessary qualifications to deliver safe and effective patient care within a healthcare facility. The privileging process involves verifying your qualifications, which may include education, training, and experience, before you can perform designated medical services.

Why is Privileging Important?

The primary role of privileging is to ensure that healthcare providers can deliver competent care specific to their area of expertise. This process protects patient safety but also maintains the integrity of healthcare services within the facility. By confirming that providers possess the right skills and knowledge, healthcare organizations can guarantee that patients receive high-quality care tailored to their needs.

The privileging process typically includes several key steps:

1. Determining Privileges: The first step involves identifying the specific privileges needed based on the provider's specialty and scope of practice.
2. Application for Privileges: Providers submit an application detailing their qualifications and the privileges they seek.
3. Verification of Credentials: Hospitals, urgent care centers, physician offices, and medical groups verify the provider's education, training, licensure, and other relevant credentials.
4. Peer Review: A review by peers assesses the clinical competence and expertise of the provider.
5. Approval Process: After successful verification and review, privileges are formally approved by the healthcare facility.
6. Ongoing Monitoring: Continuous evaluation of a provider’s performance ensures they maintain the necessary skills to provide care safely.

Unlike credentialing, which involves verifying a provider's qualifications, privileging focuses on granting permission to perform certain tasks based on those qualifications. 

Privileging lets healthcare facilities adapt to changes in regulations and standards. It also ensures compliance with requirements set by regulatory bodies such as the Centers for Medicare and Medicaid Services (CMS). 

Proper privileging helps mitigate legal risks associated with negligent credentialing lawsuits, which can have serious financial implications for healthcare organizations. Based on a provider’s qualifications and role, different types of privileges define the scope of services they can perform.

Types of Privileges in Healthcare

In the healthcare setting, privileges define what services a doctor or a surgeon can perform.  However, Physical Therapists (PTs) can also have specific privileges, particularly related to their scope of practice. While PTs may not always be "privileged" in the same formal sense as physicians, their practice is still regulated by professional standards and institutional policies. In some cases, healthcare organizations may grant PTs specific permissions or privileges, such as:

1. Direct Access Privileges: In some regions, PTs are allowed to evaluate and treat patients without a physician referral, a privilege that may be granted based on the PT's experience, certification, or local regulations.
2. Specialized Practice Privileges: PTs with advanced training or certifications in specific areas, such as orthopedics or neurology, may be granted the privilege to treat specialized conditions or perform advanced procedures like dry needling or spinal manipulation.
3. Referral and Collaborative Privileges: While PTs typically don’t admit patients to hospitals or perform surgeries, they may have privileges to collaborate with other healthcare providers, such as referring patients for imaging or recommending additional therapies based on their assessment.

Each healthcare institution may have varying levels of privileges granted to PTs based on their qualifications, state or national regulations, and the specific needs of the facility.

Continuous Improvement 

Continuous improvement in healthcare often involves ongoing evaluation through peer reviews and practice assessments. Peer review processes are designed to enhance the quality of care provided by healthcare professionals and Physical Therapists. They serve several key functions:

• Quality Assurance: Regular peer reviews help identify areas where providers excel and where they may need additional training or support. This ongoing evaluation is crucial for maintaining high standards of care and ensuring patient safety.
• Feedback Mechanism: Peer reviews offer a platform for healthcare professionals to receive constructive feedback from their colleagues. This feedback can guide practitioners in refining their skills and improving their clinical practices.
• Compliance and Accreditation: Many healthcare facilities utilize peer review as part of their compliance with accreditation standards set by organizations such as the Joint Commission. These reviews help demonstrate that providers meet established performance criteria, which is essential for maintaining accreditation status.

Without proper credentialing, insurance companies may not recognize you, which might lead to delayed reimbursements. With SpryPT, you experience faster, error-free claims with automated credentialing and reimbursement tools.

Proper privileging is only effective with thorough documentation. Ensuring accurate records supports compliance, verification, and smooth credentialing for healthcare providers.

Documentation Requirements for Credentialing and Privileging

Documentation requirements for credentialing and privileging are essential for healthcare organizations. These processes ensure that you are qualified and authorized to deliver safe patient care. Below, we outline the key documentation needs for both credentialing and privileging.

Essential Documents for Credentialing

The credentialing process requires the submission of key documents to verify qualifications and ensure providers meet necessary standards for patient care. You must submit these documents during the credentialing process:

1. Education Records: This includes transcripts and diplomas from medical schools or other relevant educational institutions, confirming the provider's educational background.
2. Medical Licenses: You must present valid medical licenses that demonstrate their legal authority to practice medicine in their respective states.
3. Board Certifications: Documentation of board certifications verifies that you have met specific professional standards in their specialty area.
4. Work History: A detailed account of previous employment, including positions held, duration, and responsibilities, is necessary to assess your experience and qualifications.

Verification Needs 

Verification of documentation involves confirming the authenticity of submitted documents through primary sources:

1. Educational Institutions: Organizations must contact schools directly to verify degrees and training programs completed by the provider.
2. Licensing Boards: Verification from state licensing boards ensures that the provider holds a current, unrestricted license to practice medicine.
3. National Practitioner Data Bank (NPDB): This federal database provides information on malpractice claims, disciplinary actions, and other relevant data about healthcare providers. Organizations often check this resource to ensure there are no red flags in a provider's history.

Utilizing Technology for Credentialing Documentation

Technological solutions have been of great help to PTs and healthcare professionals to help streamline the submission and management of necessary documents, reducing administrative burdens. 

Credentialing software often provides a centralized platform where providers can upload their documentation directly, allowing for easier tracking and verification by administrative staff. Platforms like SpryPT,  symplr, CredentialStream, and QGenda Credentialing are a few software to name.

Such software typically includes features like automated reminders for document expiration dates, real-time status updates on applications, and integrated communication tools to promote interactions between you and credentialing committees. This improves efficiency and accuracy by minimizing human error during data entry and document verification.

While credentialing verifies qualifications, privileging ensures providers can competently apply those qualifications in specific settings. The two processes are interconnected and often overlap.

How is Credentialing and Privileging Related?

Understanding the relationship between credentialing and privileging is essential for maintaining high standards in healthcare.

Credentialing as a Prerequisite

Credentialing serves as the foundational step in your journey of your practice’s growth. This process involves a thorough verification of a practitioner’s qualifications, including their education, training, licensure, and experience. Credentialing ensures that your staff meet the necessary standards to practice within your practice. According to the National Committee for Quality Assurance (NCQA), this verification process is crucial for establishing a provider's eligibility to deliver care in a medical setting.

The credentialing committee evaluates the gathered data to determine whether a practitioner possesses the qualifications required for specific clinical privileges. Thus, credentialing acts as a prerequisite for privileging, ensuring that only qualified individuals are considered for the next step in the process.

Credentialing vs. Privileging: Mapping Out the Key Differences

Credentialing establishes whether a healthcare provider is generally qualified to practice, while privileging determines what specific services they are authorized to perform. Let’s check out the key differences between credentialing and privileging so that you have a better understanding of both.

While credentialing verifies qualifications, privileging grants specific practice rights. However, implementing both efficiently presents challenges that healthcare organizations must navigate to maintain compliance, streamline operations, and ensure high-quality patient care.

Challenges in Credentialing and Privileging

The credentialing and privileging processes face several key challenges that can hinder efficiency and effectiveness. Here are the main challenges:

• Time-Consuming Processes
  
  • Credentialing and privileging require thorough verification of qualifications, ensuring compliance with healthcare standards.
  • Lengthy review periods can delay provider onboarding, impacting patient care and operational efficiency.
  • Privileging involves additional evaluations, further extending the time required for completion.
• Challenges in Documenting Credentials
  
  • Managing the volume of required documentation is a complex and resource-intensive task.
  • Inaccurate or outdated documents can lead to delays, denials, or compliance issues, affecting both providers and patients.
• Staffing Challenges
  
  • Recruiting and retaining skilled credentialing professionals is challenging due to workforce shortages.
  • High turnover rates disrupt workflows, causing compliance risks and process inefficiencies.
  • Budget constraints may limit credentialing teams, leading to bottlenecks and slower processing times.
• Data Management and Security Issues
  
  • Healthcare organizations handle sensitive credentialing data, making security a top priority amid increasing cyber threats.
  • Ensuring compliance with regulations like HIPAA requires secure data transmission and storage practices.
  • Manual tracking and outdated systems increase the risk of errors, inefficiencies, and lost documentation.

Potential Solutions for Efficiency

To address the challenges posed by these time-consuming processes, these are the solutions aimed at increasing efficiency. 

• Utilizing Technology & Automation: Implementing credentialing software automates tasks like data entry and verification, reducing administrative burden and minimizing errors. Outsourcing credentialing to specialized firms ensures compliance and timely processing.
• Streamlining Workflows: Digital solutions help speed up credentialing by eliminating manual inefficiencies, allowing staff to focus on critical responsibilities, and improving overall process efficiency.
• Continuous Monitoring & Compliance: Regular re-credentialing and privileging assessments ensure ongoing compliance and provider competency, enabling early issue detection and timely interventions.
• Temporary Privileges for Flexibility: Establishing a structured process for granting temporary privileges helps healthcare facilities quickly respond to emergencies or onboard locum tenens staff efficiently.

Overcoming these challenges requires alignment with regulatory standards. The Center for Medicare and Medicaid Services (CMS) plays an important role in shaping privileging frameworks, ensuring healthcare facilities maintain compliance, uphold patient safety, and streamline provider credentialing processes.

CMS Requirements and their Impact on Privileging

CMS requirements shape the framework for healthcare privileges, enhancing patient safety and reinforcing the integrity of healthcare delivery systems across the nation.

Role of CMS

The CMS plays a critical role in establishing standards for healthcare facilities, particularly concerning the privileging process. CMS sets Conditions of Participation (CoPs) that hospitals and other healthcare organizations must adhere to in order to participate in Medicare and Medicaid programs. These conditions ensure that facilities provide safe and effective patient care by mandating that they implement a robust privileging system.

Specific Requirements

CMS outlines specific requirements for the privileging process, which include evaluating the competencies of healthcare providers. This evaluation is essential to ensure that providers possess the necessary skills and qualifications to deliver patient care safely. 

• Medical Staff Bylaws: Hospitals must have medical staff bylaws that describe the privileging process, including criteria for determining the privileges to be granted and procedures for applying these criteria to individual practitioners. 
• Evaluation of Practitioners: The medical staff is responsible for evaluating the qualifications and competencies of practitioners seeking privileges. This evaluation includes reviewing education, training, experience and demonstrated competence. 
• Governing Body Oversight: The hospital's governing body must ensure that privileging decisions are based on thorough evaluations and are consistent with the hospital's policies and procedures. 
• Periodic Appraisals: The medical staff must conduct periodic appraisals of practitioners to assess their continued competence and determine whether to continue, modify, or revoke their privileges. 
• Documentation: Hospitals must maintain accurate and up-to-date records of the privileging process, including evaluations, decisions, and any actions taken regarding practitioners' privileges.

Governing Body Responsibilities

The governing body of a healthcare facility holds important responsibilities regarding the privileging process. It must ensure that privileging decisions are not solely based on provider certifications but also include thorough performance assessments. This approach guarantees that privileges are granted based on a comprehensive evaluation of a provider's qualifications, experience, and demonstrated competencies. 

By enforcing these standards, the governing body helps maintain high-quality patient care and mitigates risks associated with negligent credentialing lawsuits. These can have severe financial implications for healthcare organizations.

Suggested read: Understanding Credentialing in Healthcare: A Guide

Meeting CMS requirements requires meticulous documentation, which underscores the importance of accurate credentialing and privileging records. Credentialing and privileging, while distinct, are integral to healthcare quality and compliance. Understanding their roles prepares you and facilities for future challenges.

Conclusion

Credentialing and privileging are imperative to maintain safety, compliance, and trust in healthcare. Credentialing ensures providers meet baseline qualifications, while privileging focuses on their competency for specific procedures. Together, they create a system of checks and balances that protects patients and supports healthcare excellence.

As the industry evolves, leveraging technology and refining processes will enhance credentialing and privileging practices, ensuring they remain efficient and effective. By understanding credentialing vs. privileging, you can appreciate their distinct yet complementary roles in delivering quality care.

If you are a PT clinic owner, streamline your credentialing workflow by integrating SpryPT into your system. SpryPT automates your credentialing, ensuring faster approvals and accurate payment processing so you can focus on what matters most—your patients. Schedule a free demo today!

FAQs

1. What is meant by credentialing?

Credentialing is the process of verifying a healthcare provider's qualifications, including education, training, and experience, to ensure they meet the standards required for patient care.

2. What is the difference between privileges and credentials?

Credentials confirm a provider's qualifications, while privileges grant them the authority to perform specific medical procedures or services within a healthcare facility.

3. What comes first: credentialing or privileging?

Credentialing precedes privileging; a provider must be credentialed before being granted privileges to perform specific medical procedures.

4. What are the two types of credentialing?

In healthcare, credentialing ensures that medical professionals meet the necessary qualifications and standards. The two primary types of credentialing are:

• Professional Credentialing: This involves verifying an individual's education, training, licensure, and professional experience to ensure they are qualified to practice in their specific field.
• Payer Enrollment Credentialing: This process focuses on enrolling healthcare providers and facilities in insurance networks, ensuring they meet the payer's standards and are eligible for reimbursement.

‍5. What are the four core criteria for credentialing and privileging?

The four core criteria are education and training, licensure, experience, and competence.