Credentialing as a Group Practice vs. Solo Practitioner

If you’re a behavioral health therapist looking to accept insurance or Medicaid, understanding the credentialing process is essential. Particularly regarding working alone versus in a group, the credentialing process will vary. These differences can impact your timeline, administrative workload, and financial setup. Evaluating each will help determine which route best suits your long-term practice goals.

In this article, we will explore the key differences in credentialing. We will compare solo practitioners and group practices in behavioral health. We will highlight the benefits, challenges, and important factors to consider for both.

What is Behavioral Health Credentialing?

Behavioral health credentialing involves obtaining approval from payers to receive reimbursement for rendered services. This process involves verifying a provider’s licensure, malpractice history, and compliance with insurance requirements.

Insurance credentialing ensures that behavioral health therapists meet payer standards before they can bill for services. While the process itself is similar for both solo and group practices, the scope and administrative requirements differ considerably.

Solo Practitioner Credentialing

A solo behavioral health therapist operates in an independent manner, meaning they must complete the insurance credentialing process as an individual provider. Here’s what that entails:

Steps in Solo Practice Credentialing

1. Obtain an NPI (National Provider Identifier) – Solo practitioners need an NPI Type 1 for individual billing.
2. Enroll with CAQH (Council for Affordable Quality Healthcare). Most insurance companies need therapists to register with CAQH and keep their profiles updated.
3. Apply to Insurance Panels – Solo providers must submit applications to each insurance company separately, meeting unique criteria for each.
4. Submit Supporting Documentation – This includes licensure, liability insurance, a W-9 form, and any relevant certifications.
5. Complete the Verification Process – Insurers conduct primary source verification of credentials and may require additional documentation or clarity.
6. Sign a Contract & Set Up Billing – Once approved, providers receive contracts outlining reimbursement rates and claim submission procedures.

Benefits of Solo Practice Credentialing

• Greater autonomy – The provider has complete control over which insurance panels they join and how they manage contracts.
• Simpler setup – There are fewer moving parts compared to group credentialing, making the process more straightforward.
• Direct relationship with insurance payers – Solo practitioners can negotiate reimbursement rates and terms directly.

Challenges of Solo Practice Credentialing

• Time-consuming – Each insurance application is separate, requiring individual submissions and follow-ups.
• Lower negotiation power – Individual providers often have less leverage in negotiating higher reimbursement rates.
• Limited growth – Once credentialed, the solo provider cannot easily add more clinicians under their contract.

Group Practice Credentialing

A group practice consists of multiple providers working together under one organizational entity. This setup allows for collective credentialing, where insurance payers contract with the practice rather than with each individual therapist.

Steps in Group Practice Credentialing

1. Obtain an NPI for the practice. Group practices need an NPI Type 2. Each provider also needs their own NPI Type 1. You can learn more about this 10-digit identification number here.
2. Register the Business with Insurance Panels. The practice itself applies for credentialing as an entity before adding individual providers.
3. Apply for a Tax ID (EIN). You need an Employer Identification Number (EIN) because you bill under the practice name.
4. Enroll each provider with CAQH. The group applies as a whole, but each provider needs their own CAQH profile.
5. Submit credentialing applications for each therapist, as some insurance panels require the group to credential each provider separately.
6. Obtain Group Contracts – After approval, the practice gets group contracts. This lets all credentialed therapists bill under the same agreement.

Benefits of Group Practice Credentialing

• Streamlined credentialing – Once the group is contracted, adding new providers can be easier and faster.
• Higher reimbursement potential – Larger groups often have more negotiating power with insurance companies.
• Greater Efficiency – You can centralize billing, claims processing, and insurance-related tasks to improve operating efficiency.
• Being scalable allows the group to add additional therapists under its contracts without starting the credentialing process from scratch.

Challenges of Group Practice Credentialing

• More administrative complexity – Managing contracts, compliance, and documentation for multiple providers requires more oversight.
• Longer initial process – Getting a group practice credentialed can take more time upfront.
• Less individual control – Providers work under the group’s agreements, limiting their ability to negotiate individually.

Things to Consider When Choosing Between Solo and Group Credentialing

1. Business Goals & Growth Plans

If you plan to expand your practice in the future, group credentialing offers more flexibility. Solo credentialing, however, works best for those who prefer autonomy and a simpler administrative setup.

2. Financial Considerations

Solo practitioners handle their own income and payment rates. Group practices can negotiate for higher reimbursement rates but must share revenue among several providers. Understanding how reimbursement structures impact your bottom line is key.

3. Administrative Capacity

Group practices require more administrative resources to handle credentialing, billing, and compliance. Hiring support staff or utilizing an electronic health record (EHR) system can ease the burden.

4. Medicaid Participation

Behavioral health Medicaid credentialing varies by state, and some Medicaid plans require additional steps for groups vs. solo practitioners. If you plan to accept Medicaid, researching state-specific requirements is essential.

5. Contracting and Legal Implications

Group practices must establish clear agreements among providers regarding revenue sharing, insurance contracts, and liability. Legal guidance can help ensure the practice operates smoothly.

Final Thoughts

Understanding the credentialing differences between solo behavioral health therapists and group practices is important. While solo credentialing offers independence, group credentialing provides more scalable and efficient opportunities.

Therapists can accelerate payment and avoid delays by being proactive and organized in the credentialing process. If you’re looking for expert support in navigating behavioral health insurance credentialing, consider working with a credentialing specialist (see our Vendors Directory).

By weighing the pros and cons of each approach, you can establish a credentialing strategy that aligns with your long-term goals.