Delegated vs Non-Delegated Credentialing for Providers

In the rapidly growing field of healthcare industry, credentialing goes beyond being a simple administrative function and is a build block process as it protects patient safety, acts as a regulatory safeguards for HIPAA Compliance, and enables the prompt collection of payments. For a growing medical group, a hospital, or a private practice, the credentialing model they choose affects their operational performance and revenue flow.

Healthcare organizations have come to depend on two credentialing models, delegated credentialing and non-delegated credentialing.

Each of which has its own advantages and disadvantages. This guide has been fully updated to provide a pointed comparison of delegated vs non-delegated credentialing, how each of these systems function, the pros and cons of each, as well as which of the two systems will best suit your organization.

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What is Credentialing in Healthcare?

Credentialing is the process of verifying that healthcare providers have the necessary and required, if and to the extent, that they are required, and that in the actual work of being providers, they are fully credentialed.

Education, training, and residency
State licenses and if board certification

Work and clinical history
Malpractice or other claims, and disciplinary actions
Professional references
Criminal background checks

If there is DEA registration, it needs to be indicated.

This process allows verification for each and every provider in order to be compliant with the state, federal and the payer’s requirements, for all billable services. Without credentialing, the provider will face claim denials, delayed payments, non-compliance penalties, and exclusion from the payer.

Delegated vs Non-Delegated Credentialing: The Core Difference

The key difference lies in who has responsibility for verification of provider credentials.

Delegating Credentialing

Healthcare organizations such as hospitals, IPAs, MSOs, or large medical groups, are authorized by an insurance payer to perform credentialing, acting on the payer’s behalf.

Non-Delegating Credentialing

The insurance payer retains complete responsibility for credentialing each provider on an individualized basis.

What is Delegating Credentialing?

Delegated Credentialing is when an insurance payer signs a Delegation Agreement to a Healthcare Organization, permitting credentialing of providers, according to the NCQA and payer standards.

The organizations that most commonly employ delegated credentialing arrangements are:

Hospital systems
Large physician groups
Independent Practice Associations (IPAs)
Managed Service Organizations (MSOs)

The organization performs verification of credentials, keeps credentialing files, and provides the payer with retention audits and reports on a scheduled basis.

The Advantages of Delegated Credentialing

Faster onboarding — the provider gets to start seeing patients and start billing sooner.
Greater control — organizations assign and manage their own credentialing due dates.
Improved operational efficiency — removes duplication of credentialing across payers and provider groups.

Greater provider satisfaction — frustration of delays and administrative burden is reduced.

Challenges with Delegated Credentialing

Delegated Credentialing requires strong and institutionalized Credentialing Committee and infrastructure.
This process requires stringent compliance with NCQA and the relevant payer requirements.
This is further complicated by the need for continual reporting and regular audits.
The Delegated Credentialing process requires investments in resources, particularly in staff, technology and the development of new policies.

What is Non-Delegated Credentialing?

In non-delegated credentialing, the payer of the insurance takes responsibility for the entire credentials verification process. Each individual provider will complete an application and submit it, while the payer does independent verification of all the credentials.

Advantages of Non-Delegated Credentialing

Healthcare organizations have very little administrative burden in non-delegated credentialing.
No need for organizations to develop compliance programs and credentialing committees.
This system works best for individual practitioners and very small healthcare organizations.
The payer does all the verification steps, which are the time-consuming process.

Disadvantages of Non-Delegated Credentialing

In non-delegated credentialing, there is longer processing times which can be from 60 to over 120 days.
This process delays reimbursement for the services provided until the verification of credentials is completed.
There is very little to no control over the speed of the approval and the timelines to complete the process.
This system can be very frustrating for the individual provider due to the slow responses from the payer.

Key Distinctions Between Credentialing By Delegation and Credentialing Not By Delegation

Factor	Delegated Credentialing	Non-Delegated Credentialing
Who Performs Credentialing	Healthcare organization	Insurance payer
Processing Time	30–60 days (faster)	60–120+ days (slower)
Administrative Load	Higher	Lower
Compliance Requirements	Organization must meet NCQA and payer standards	Payer maintains compliance
Provider Experience	Faster onboarding	More delays
Best For	Large groups, hospitals, IPAs, MSOs	Small practices, solo providers

When Should an Organization Opt for Credentialing By Delegation?

Credentialing by delegation is best for:

Big practices that have onboarding of providers on a regular basis
Hospitals and healthcare systems
IPAs and MSOs that have large networks
Organizations that aim to accelerate revenue cycles
Groups that have established teams and processes for credentialing

Organizations that have the capacity to support compliance and auditing will experience a significant decrease in payer wait times if credentialing by delegation is chosen.

When Should an Organization Opt for Credentialing Not By Delegation?

Credentialing not by delegation is best for:

Single practitioners
Small clinics that do not have a lot of staff
Organizations that work with a very limited number of insurance payers
Practices that prefer if payers do the verification

Although it is a slower process, not by delegation credentialing eases the internal burden and does it without the need for credentialing committees and reporting systems.

Compliance Requirements in Delegated Credentialing

For organizations participating in delegated credentialing, NCQA and payer stipulations must also be followed verbatim, such as:

Having Credentialing Committees formally recognize their existence
Performing primary source verification for all provider credentials
Credentialing after every 2-3 years
Having policies and procedures written down
Payers must receive periodic audit reports

Noncompliance may lead to status being delegated, or loss of participation with payer networks.

Effect of Compliance on Revenue Cycle Management (RCM)

Credentialing has an effect, especially with,

Delegated Credentialing

Faster claim submissions
Less cash flow interruptions
Increased provider productivity and efficient scheduling

Non-Delegated Credentialing

Delayed billing approval leads to slower receivables
Could delay the timeline before a provider starts generating income

For organizations seeking smoother revenue cycles and decreased disruption, delegated credentialing is frequently the best option.

How Armored MBS Supports the Credentialing Process

At Armored MBS, we know how time consuming and overwhelming credentialing is likely to be for busy health care organizations. Our team offers complete coverage to keep your organization compliant, secure, and financially healthy, regardless of whether you are considering delegated credentialing or supervising non-delegated workflows.

We help with:

Provider enrollment and payer contracting
Delegation readiness and compliance
Primary source verification
Management of credentialing filesPreparation, and reporting of audits

Streamlining the revenue cycle

Armored MBS offers unique credentialing capabilities to both small independent health care providers and large networks.

Conclusion

Connecting insights from all this research log, we also predict that an organization’s size, structure, and workflow needs all play a determining role in whether an organization chooses delegated credentialing or a non-delegated approach.

Efficiencies in control and speed make delegated credentialing optimal for larger groups.
Fewer administrative resources in smaller practices enables non-delegated credentialing to allocate responsibilities more efficiently.

Both options are substantial in scope and function in today’s healthcare system. Dependable credentialing and RCM collaborations helps providers gain confidence in their processes, and, together with Armored MBS, ensure compliance and protect their financial assets.

Frequently Asked Questions

Differentiation between delegated and non-delegated credentialing?

While delegated credentialing refers to a healthcare organization’s ability to credential providers on payers’ behalf, in non-delegated credentialing, the payer is the only one who can complete the process.

Estimated time each process takes?

Delegated: Average is around 30–60 calendar days
Non-delegated: It averages more in the 60-120+ calendar days time frame

Who are the highest documented providers of delegated credentialing?

There is a higher volume of documented providers of delegated credentialing for large hospitals, medical groups, IPAs, and MSOs that are seeking to reduce their time to revenue generation from credentialing.

How does a small practice approach delegated credentialing?

Small practices do not require delegated credentialing, as they tend to prefer non-delegated credentialing where the payer assumes the administrative workload.

What does Armored MBS offer regarding credentialing?

For both delegated and non-delegated models, Armored MBS provides license and payer contracting, credentialing compliance, auditing support, and provider enrollment as tailored services.

Medical Billing

Provider Credentialing

Patient Help Desk

Remote Patient Monitoring

Revenue Cycle Management

Medical Coding

Denial Management

Account Recievable

Audit and Reporting