Delegated Credentialing: Streamlining Healthcare Provider Onboarding

Credentialing is a critical step in healthcare that ensures physicians are qualified to provide care. But have you ever considered how long it takes to complete the authorization process and how delays may impact patient care and organizational efficiency? According to the American Medical Association (AMA), the credentialing procedure might take 90 to 120 days to complete. This can lead to many delays in healthcare delivery.

Delegated credentialing enables healthcare institutions to assume credentialing tasks from payers, resulting in dramatically shorter wait times and improved workflow. By bringing the credentialing effort in-house, firms may minimize the time it takes to onboard suppliers, often by up to 50%. However, this solution is not without drawbacks. To reduce these errors businesses must follow federal standards, state regulations, and payer-specific criteria.

In this post, we will guide you through the delegated credentialing process, compare it to non-delegated credentialing, and help you decide whether it is the best option for your business. We’ll discuss the advantages, risks, and best practices to ensure your team can make trained credentialing decisions.

What Is Delegated Credentialing?

Delegated credentialing enables health plans to delegate credentialing tasks to healthcare institutions. It significantly reduces approval times and administrative load.

More About Delegated Credentialing

Delegated credentialing is a formal arrangement in which a healthcare body (generally a physician group, hospital, or clinic) assumes credentialing obligations. Instead of the payer personally examining a provider’s qualifications, the delegated entity manages the credentialing process and presents it by a written delegation agreement.

For an individual to be eligible for delegation, the healthcare institution must go through a thorough evaluation. This must adhere to the industry standards set by NCQA, CMS, or URAC. It entails rules, procedures, credentialing software, and employee expertise. Once identified, the organization handles primary source verification (PSV), licensure checks, education verifications, and sanction monitoring internally.

This system varies significantly from non-delegated credentialing, in this system the payer has full authority over verification and processing.

Why Organizations Choose Delegated Credentialing

Many healthcare companies choose outsourced credentials because it allows for speedier onboarding and fewer administrative delays. For large provider groups and hospital systems, it could eliminate duplicate work and shorten credentialing times by weeks.

Here are the main reasons why delegated credentialing is implemented:

Reduced turnaround times: Delegated credentialing can save provider enrollment time by 20-30%.
Cost efficiency: Fewer back-and-forths with insurers equate with reduced staffing expenses.
Control over data accuracy: Organizations had internal credentialing files, which reduced mistakes from third-party processing.
Improve provider satisfaction: Faster approvals enable ongoing billing and patient care.

Delegated Credentialing Process (Step-by-Step)

A delegated credentialing process necessitates well-defined infrastructure, regulatory compliance, and internal responsibility. The following is an organized discussion of how it is used in practice.

Step 1 – Written Delegation Agreement

The procedure begins with a written contract between the health plan and the delegated organization. This document outline:

Roles and duties for credentialing and re-credentialing
Timelines for Initial Credentialing and Periodic Review
Quality and performance standards.
Regarding monitoring, audit frequency, and remedial actions.

Step 2 – Internal Credentialing Infrastructure

The delegated entity must have an operational, policy-driven credentialing system in place. This includes:

A credentialing committee having verified approval power.
Credentialing workers are trained.
Secure data systems by HIPAA standards
Credentialing rules are associated with national standards (e.g., NCQA, CMS, URAC).

Step 3 – Credentialing and Re-Credentialing Execution

The delegated organization takes over the actual credentialing activities, including:

Primary source verification of licenses, certifications, and education
Background checks and sanction reviews
Reviewing clinical performance or peer references
Re-credentialing every 2-3 years depending on payer contracts

Step 4 – Audits and Oversight

Health plans retain oversight responsibility. They conduct audits to confirm compliance with the delegation agreement. This includes:

Annual file audits (sample-based or full)
On-site reviews
Corrective action tracking
Revocation of delegation if non-compliance is found.

Delegated vs Non-Delegated Credentialing

This section discusses the differences between delegated and non-delegated credentialing. Understanding both enables healthcare organizations to identify which approach best suits their operational structure, compliance risk tolerance, and administrative capabilities.

Key Differences and Use-Cases

Here are the key differences for both systems:

Feature	Delegated Credentialing	Non-Delegated Credentialing
Who conducts credentialing	Provider group or delegated entity	Health plan or payer
Formal agreement required	Yes	No
Credentialing timeline	Often faster due to internal control	Dependent on the payer’s process and capacity
Oversight and audits	Performed by payer; requires periodic audit	Controlled entirely by the payer.
Infrastructure needs	Requires internal staff, systems, and policies	The supplier does not require any infrastructure.
Use-case	The supplier does not require any infrastructure.	The supplier does not require any infrastructure.
Administrative responsibility	Large hospitals, health systems, or MSOs	Solo practitioners or small practices
Control over timeline and process	Higher	Limited

Summary of Use-Cases

Delegated Credentialing is suitable for:

Delegated credentialing works well for major provider groups, hospitals, or health system’s dedicated credentialing departments. These firms often have trained employees, internal quality assurance methods, and the resources needed to handle data, meet regulatory rules, and communicate with payers. Many of these systems follow NCQA or URAC criteria, allowing them to form delegation agreements with insurers. Delegated credentialing enables these companies to control credentialing timeframes, eliminate onboarding delays, and manage provider data changes internally, ensuring network adequacy and operational efficiency.

Non-Delegated Credentialing is best for:

Non-delegated credentialing is ideal for small clinics, single practitioners, and providers who lack the infrastructure or people to administer the credentialing process internally. This arrangement places all obligations on the payer. While this may result in lengthier processing times, it relieves the provider’s administrative load. It is also the default option for businesses that do not yet fulfill the documentation, personnel, or policy requirements for a formal delegation agreement.

Who Should Use Delegated Credentialing?

This section discusses which organizations benefit most from delegated credentialing and when a non-delegated method is preferable.

Suitable Use Cases

Delegated credentialing is most effective for businesses that already have an internal certifying system in place. This includes:

Large multi-specialty medical organizations
Healthcare systems or hospital networks
Federally Qualified Health Centers (FQHC)
Groups previously recognized by NCQA or URAC.
Provide businesses with compliance officers and internal audit systems.

When Non-Delegated Credentialing May Be Better

Some providers don’t profit from delegated certification. This includes:

Solo practices or small provider groups.
Clinics without credentialed people or systems.
Organizations cannot conduct delegation audits.
New procedures without verified compliance documentation

Key Benefits of Delegated Credentialing

Delegated credentialing has various advantages for healthcare companies trying to improve operations and provider satisfaction.

Reduced Administrative Burden: By delegating credentialing obligations to a specialist body, companies may free up internal resources to focus on patient care and other vital activities.
Faster Provider Onboarding: By streamlining the credentialing process, new providers may be integrated into the network more quickly, minimizing the time it takes from hiring to active patient care.
Cost-effectiveness: Outsourcing credentialing can result in considerable cost savings by reducing the requirement for extensive in-house personnel committed to this complicated procedure.
Improved Compliance and Quality Control: Delegated entities frequently have specific knowledge, ensuring that credentialing complies with current standards and regulations, improving overall compliance and lowering the chance of mistakes.
Enhanced Provider and Patient Satisfaction: Efficient credentialing processes boost provider confidence and patient satisfaction by ensuring that credentialed experts are available to offer timely service.

Conclusion

Delegated credentialing enables significant healthcare organizations to cut approval time and improve provider onboarding. It provides more control over data accuracy and reduces administrative costs. By following regulatory guidelines, providers can manage credentialing internally while remaining compliant with payer monitoring. Although not for everyone, it is ideal for firms with established procedures and competent employees. Smaller practices might find conventional accreditation more feasible. Assess your structure and resources to determine which way best serves your operating objectives.