Healthcare providers starting a new practice often ask, “Can I credential the business and then just add providers without having to credential the new providers?” The answer is no. Payer credentialing is always performed at the provider level for any provider who qualifies to be in-network with a payer. Payer contracting is what determines whether your practice will operate under a group or individual agreement.

This article explains how provider credentialing works with commercial insurance networks, what it means to contract as a group vs. individual, and what new practices should expect.

What Is Payer Credentialing?

Payer credentialing is the process by which insurance networks verify a provider’s qualifications before approving them to join the network. The payer confirms:

• Current and valid licenses
• DEA or CDS registration if applicable
• Education and training background
• Work history and explanations for any gaps
• Malpractice coverage and claims history
• Sanctions and disciplinary actions
• National Practitioner Data Bank queries

This verification is always tied to the individual provider (Type 1 NPI). The business entity (Type 2 NPI and EIN) is included along with basic entity documents in the application for billing purposes, but the entity itself is not credentialed.

Group Practice vs. Solo Practice

• Group practice: Two or more providers share a business entity for billing. Claims list the rendering provider’s Type 1 NPI plus the entity’s EIN and Type 2 NPI.
• Solo practice: A single provider may still form a business entity. Claims are billed the same way, using both the Type 1 NPI and the entity’s Type 2 NPI/EIN.

In both situations, credentialing always happens at the provider level.

What Is Payer Contracting?

Once a provider has completed provider credentialing, the next step is payer contracting. This is when the insurance network issues a participating provider agreement.

Group Contracts

• The contract is between the payer and the business entity.
• Once approved, additional providers can be attached to the same contract after being credentialed.
• The practice manages one set of reimbursement rates and terms.
• Advantage: simpler administration and easier growth.

Individual Contracts

• The contract is between the payer and the individual provider.
• The provider’s contract is still linked to the business entity EIN and Type 2 NPI for billing.
• Advantage: portability. Providers can move to a new employer without leaving the network.
• Common in solo and small group practices.

Important: Payers, not practices, decide whether they will issue a group contract. Some require only two providers, others may require ten or more. Some rarely issue group contracts at all. In some situations payers may issue a group contract for a solo provider.

Does Billing Differ Between Group and Individual Payer Contracts?

No. Regardless of the contract type:

• The claim always lists the rendering provider’s Type 1 NPI (or Supervising Provider in incident-to billing situations).
• The entity’s Type 2 NPI and EIN are used for billing and reimbursement.

Payments are made to the business entity.

Key Takeaways

• Provider credentialing is always at the individual level.
• Payer contracting determines whether agreements are with the group entity or with each provider.
• Billing is the same under both contract types.
• Only the payer decides whether to issue a group contract.

Frequently Asked Questions

What is payer credentialing?
Payer credentialing is the process insurance networks use to verify a healthcare provider’s qualifications as a part of the application to become in-network.

What is provider credentialing vs payer contracting?
Provider credentialing verifies the provider’s background. Payer contracting establishes the agreement between the provider or group entity and the insurance company.

Do solo providers need payer credentialing?
Yes. Even if you practice alone under a business entity, the payer still credentials you as an individual provider.

Does payer contracting affect billing?
No. Claims always show the rendering provider’s Type 1 NPI and the entity’s Type 2 NPI/EIN. Payments are directed to the business entity.

Provider Credentialing and Payer Contracting Checklist

Before you start credentialing with commercial insurance networks, make sure you have:

1. Business entity details
• Legal name, EIN, Type 2 NPI, W-9, IRS Notice CP575
• Bank account held in the exact legal name as is on file with the IRS
2. Provider details for each applicant
• Type 1 NPI
• Current licenses in each practice state
• DEA/CDS (if applicable) - note: some payers may require a presribing arrangement if you lack a DEA cert
• Education, training, and board certification information
• Work history (5 years minimum with gaps explained)
3. Insurance and compliance documents
• Malpractice insurance certificate
• Hospital privileges or admitting arrangement (if required)
• Disclosure of sanctions or disciplinary actions
4. CAQH profile
• Keep it current, updated and attested for faster payer review (be sure all documents are uploaded)
5. Expectations for contracting
• Every provider must be credentialed individually (expect 90-120 days)
• Payers decide whether you receive a group or individual contract (expect 30-45 days after credentialing)
• Billing will always include provider Type 1 NPI plus entity Type 2 NPI/EIN