November 17, 2023

Insurance Credentialing Guide for Mental Health Clinicians

Written by

Carlene MacMillan, MD

If you're like many psychiatric clinicians, you've likely found yourself mired in the complexities of insurance credentialing and contracting. It's a necessary process, allowing you to broaden your patient base and enhance your practice's finances. Yet, the red tape can be a headache, pulling you away from your primary focus—your patients.

Read on to Learn Everything You Need to Know About Insurance Credentialing:

  • A clear understanding of why credentialing is important
  • Insights on selecting the right insurance companies
  • A step-by-step walkthrough of the typical credentialing process
  • Essential tools and resources to ease the journey

This guide cuts through the complexity, offering a clear path forward.

What is Insurance Credentialing/Paneling vs Contracting?

Credentialing and contracting are interlinked processes in establishing a healthcare provider's relationship with an insurance company.

Credentialing and “paneling” are interchangeable. This is the first step in the process, where a psychiatrist or any healthcare professional is evaluated and verified by an insurance company or a healthcare organization to ensure their qualifications, training, and experience meet the required standards.

Contracting, on the other hand, is the act of formalizing an agreement between you, the healthcare provider, and an insurance company, establishing your status as an in-network provider.

You need to get credentialed before you can contract with any payer. Together, credentialing and contracting determine your status as an in-network provider, influencing your reimbursement rates and patient referrals.

Why is Insurance Credentialing Crucial for Mental Health Providers?

Insurance credentialing serves as an assurance of the provider's credentials, capabilities, and competence. For mental health providers, it's a step towards building trust with both insurance companies and patients. It gives you the ability to bill insurance directly, helping you expand your patient base and increase practice revenue. Being more accessible to a wide range of patients motivates many clinicians to take insurance.

Which Insurance Panels Should You Consider Taking?

Choosing which insurance company you should consider accepting patients from is a balance between reimbursement expectations and your desired patient population.

There are 4 main types of insurance clinicians typically consider taking:
  1. Traditional Medicare
  2. Medicaid
  3. Commercial Insurance

What Are the Reimbursement Expectations for Each Insurance Type?

The expected reimbursement rates for a mental health provider varies depending on the insurance carrier. Let’s cover these more in depth.

1) Traditional Medicare

Medicare is a federal health insurance program primarily for individuals aged 65 and older or those with certain disabilities, such as psychiatric disability. Medicare reimbursement rates for psychiatrists are set by the Centers for Medicare and Medicaid Services (CMS) through the Medicare Physician Fee Schedule (MPFS). The MPFS uses a regionally adjusted formula to determine the reimbursement amount for a given procedure. Medicare reimbursement rates for psychiatry services are typically moderate and may vary based on geographic location. They change annually and are not negotiable. These plans are separate from Medicare Advantage plans which are a type of commercial plan.

2) Medicaid

Medicaid is a joint federal and state program that provides health coverage for low-income individuals and families. Each state's Medicaid program determines Medicaid reimbursement rates for psychiatrists. These rates are typically lower than Medicare and commercial insurance rates due to Medicaid's focus on serving vulnerable populations with limited financial resources. Medicaid reimbursement rates can vary significantly between states, and some states may offer supplemental payments or higher rates for specific services or underserved areas. On average, Medicaid pays about ~70% of Medicare rates for any given service (1).

3)Commercial Insurance

Commercial insurance refers to privately-owned health insurance plans offered by various companies. Reimbursement rates for mental health providers under commercial insurance plans are negotiated through contracts between the insurance company and the provider. These negotiated rates can vary widely and are influenced by factors such as the insurer's fee schedule, market dynamics, and the psychiatrist's negotiating power. Reimbursement rates from commercial insurance plans are generally higher compared to Medicare and Medicaid - usually between ~120%-180% of Medicare rates for any given service (2). Commercial insurance also includes Medicare Advantage plans which are different than traditional Medicare so it is important to ask patients who have Medicare what type they have. To accept a Medicare Advantage plan, a provider must be credentialed with the commercial insurance company that manages it.


TRICARE is the healthcare program for uniformed service members, retirees, and their families. Reimbursement rates for psychiatrists under TRICARE are determined by the TRICARE Management Activity (TMA), which is part of the Department of Defense (DoD). TRICARE reimbursement rates are generally set to align with Medicare rates, although there may be some variation depending on specific TRICARE regions or plans.

It's important to note that reimbursement rates can also vary based on specific services provided, geographical region, billing codes used, and other factors.

Overview of Insurance Panels and Reimbursement Rates: Medicare vs. Medicaid vs. Commercial Insurance vs. TRICARE

Insurance Reimbursement Rates
Insurance Type Description Reimbursement Rates Notes
Traditional Medicare Federal health insurance for individuals 65+ or with certain disabilities. Set by CMS through the MPFS; rates are regionally adjusted and may vary by location. Typically moderate rates.
Medicaid Joint federal-state program for low-income individuals and families. Determined by each state; typically lower than Medicare and commercial insurance. Pays ~70% of Medicare rates; rates can vary significantly between states.
Commercial Insurance Privately-owned health insurance plans. Negotiated through contracts; can vary widely. Generally higher, between ~120%-180% of Medicare rates.
TRICARE Healthcare for uniformed service members, retirees, and their families. Set to align with Medicare rates; may vary by region or plan. Generally aligns with Medicare rates.

Covered Lives

We’ve created a table below with the major health insurers across Medicare, Medicaid, TRICARE, and Commercial insurance by State (4,5,6,7). Mental health providers often consider a combination of insurance types to ensure a diverse patient population while balancing their financial considerations.

Major Health Insurance Carriers By State

Now you have an idea of the big four types of insurance panels. Next, you'll want to narrow down the insurance companies you credential with based on your state, which we cover below.

Major Health Insurance Carriers in Alabama

Alabama Insurance Enrollment
State Insurer Category Insurer Name Rough Enrollment Estimate
Alabama Medicare Traditional Medicare 529,000
Alabama Commercial BCBS Of Al Grp 516,500
Alabama Medicaid Traditional Medicaid 469,000
Alabama Tricare Tricare 212,500
Alabama Medicaid Unitedhealthcare Community Plan 193,500
Alabama Medicare Unitedhealthcare Of The Midlands, Inc. 133,500
Alabama Medicare Sierra Health And Life Insurance Company, Inc. 106,500
Alabama Medicare Blue Cross And Blue Shield Of Alabama 105,000
Alabama Commercial Viva Hlth Inc 23,500
Alabama Commercial Unitedhealth Grp 5,500

Major Health Insurance Carriers in Alaska

Alaska Insurance Enrollment
State Coverage Type Plan Enrollees
Alaska Medicaid Traditional Medicaid 1,174,500
Alaska Medicare Traditional Medicare 106,000
Alaska Tricare Tricare 82,000
Alaska Commercial Premera Blue Cross Grp 65,500
Alaska Commercial CVS Grp 3,000
Alaska Medicare Aetna Life Insurance Company 1,000
Alaska Commercial United Health Grp 500
Alaska Medicare Sierra Health And Life Insurance Company, Inc. 500

Major Health Insurance Carriers in Arksansas

Arkansas Insurance Enrollment
State Coverage Type Plan Enrollees
Arkansas Medicare Traditional Medicare 430,500
Arkansas Medicaid United Healthcare 390,500
Arkansas Medicaid Dignity Health And Carondelet Health Network 382,500
Arkansas Medicaid Traditional Medicaid 346,000
Arkansas Medicaid Banner Health 248,000
Arkansas Commercial Arkansas BCBS Grp 195,000
Arkansas Tricare Tricare 85,000
Arkansas Medicare Care Improvement Plus South Central Insurance Co 82,500
Arkansas Commercial Unitedhealth Grp 41,000
Arkansas Medicare Arcadian Health Plan, Inc. 38,500
Arkansas Medicare Humana Insurance Company 28,500
Arkansas Commercial Centene Corp Grp 20,500

Major Health Insurance Carriers in California

California Insurance Enrollment
State Coverage Type Plan Enrollees
California Commercial Kaiser Foundation Grp 5,346,000
California Medicare Traditional Medicare 3,436,500
California Commercial Anthem Inc Grp 1,594,500
California Medicare Kaiser Foundation Hp, Inc. 1,343,500
California Commercial Blue Shield Of Ca Grp 1,214,500
California Medicaid Traditional Medicaid 999,500
California Tricare Tricare 769,500
California Medicaid Southeasttrans 592,000
California Medicaid Multiple Primary Care Provider (Pccm) 410,500
California Medicare Uhc Of California 380,500
California Medicaid Delta Dental 313,000

We've listed only a selection of insurance carriers for each state, along with rough estimates of their member enrollment. This overview helps you identify the key insurers in your area. While the Federal government runs Traditional Medicare, individual states manage Traditional Medicaid. If you see a private company under Medicare or Medicaid, it indicates they're handling insurance coverage for certain groups in that state, under government contracts.

Now you have an idea of which payers you may want to credential with. Next, let’s cover how you go about the actual process.

How to Get Credentialed with Insurance

We recommend a 5 step process to credentialing:

1) Set aside the appropriate amount of time

Credentialing can often take between 90 to 150 days and frequently requires active follow-up with the insurance company to make sure the process is proceeding smoothly. A rough time estimate is ~10 hours of dedicated time for EACH application. Set your expectations and plan for you or someone on your team to budget time to actively manage this process. We recommend checking on the application at least once a week to identify and resolve any issues.

2) Make a list of insurance companies you’d like to panel with along with the documentation required

Understand (and document) the requirements for each insurer by searching on their websites.

Search “[Insurance company name] credentialing requirements” and in almost all cases, the insurance company website will have you answer some simple questions (e.g., specialty area) and will provide you with a list of requirements, usually including:

  • Demographic information about your clinic
  • Tax ID #s
  • NPI(s)
  • DEA #
  • State licenses. If any are expiring soon, renew before applying.
  • W-9s
  • Malpractice Insurance details. Note that if your malpractice expires soon, renew it before applying.
  • CAQH identifier (see below)

3) Make an account with Council for Affordable Quality Healthcare (CAQH)

CAQH is a platform that allows providers to upload and maintain their practice and licensure documentation online. Many insurance companies use this platform as a shared site to prevent providers from having to upload their information to multiple sites. Their website can be found here →

You may already have an account through a current or prior hospital employer. In that case, make sure your profile is up to date. CAQH sends periodic reminder emails to re-attest to the accuracy of your profile. It is essential that this profile be up to date for both initial credentialing and to remain on insurance panels when they periodically review their provider panels.

4) Prepare your documents and emphasize ways to differentiate your practice when you apply

Think of this process as a job application - the insurance company will be deciding whether they want to include you in their network and so finding ways to be unique or differentiating in the services you offer will give you a greater chance of being approved.

Some typical ways to differentiate are:

  • Language accessibility
  • Sub-specialization or experience more specific than your degree
  • Accessibility of your office for individuals with disabilities
  • Off- hours availability (e.g., nights, weekends)
  • Serving unique patient populations
  • Short wait time for an initial appointment

5) Stay persistent and get verified!

Verification takes time and there’s a tremendous amount of follow-up required, so stay vigilant! If you need assistance, there are plenty of resources available that can help you get started.

Frequently Asked Questions about Insurance Credentialing

How Long Does Insurance Credentialing Take?

Credentialing can take between 90 to 150 days, depending on the insurance company and the completeness of your application. During this period, it's essential to stay in touch with the payer, checking on the status of your application and addressing any issues promptly.

Can Providers See Patients Before Payer Credentialing Is Done?

While it it’s possible in some cases to see patients before credentialing is completed, we don’t recommend it. Doing so could lead to challenges in obtaining reimbursement from insurance companies, as services provided before the effective date of the contract will not be covered.

Sometimes, payers will make the effective date the date you first applied or an arbitrary date between then and when they issue an approval. Before you’re officially credentialed with a patient's insurance, consider treating those patients as private-pay. If the contract date is later backdated, these patients may receive a refund, and the insurance company will pay at their contracted rates.

Credentialing for Private Practice: What You Need to Know

For private practices, credentialing extends beyond the individual provider to the practice itself. In addition to personal credentials, you'll also need to provide information about your practice, such as Tax ID, practice location(s), hours, and malpractice insurance coverage.

Note that for small practices, some insurance companies will use the practice’s Tax ID but not the group NPI and will not issue a group contract until a certain threshold of providers who are in-network is met. If you do get a group contract, keep in mind that each individual clinician within the practice you want to accept that insurance needs to go through the credentialing process. If they are already credentialed when they are hired, contact the insurance company to learn about how to get them to be able to bill under your practice’s tax ID.

How Much Time and Money Does it Cost to Get Credentialed with Insurance Companies?

While payers do not typically charge to go through the credentialing process, be prepared for indirect costs such as time spent in application preparation, follow-ups, and potential delays in starting your practice or accepting insurance. It’s important to factor in these considerations when planning your credentialing process. In addition, sometimes people choose to work with experts who assist with credentialing and the costs for these services can vary.

How to Take the Pain out of Taking Insurance with Osmind

Mental health practices require a seamless, efficient approach to insurance claims — and Osmind delivers. Our  platform is designed by psychiatrists, for psychiatrists. Turn tedious documentation into a streamlined, user-friendly process, all in one place.

Why Osmind makes it Easy for you to take Insurance:

  • Time-Saving Features: With pre-populated claims and effortless submissions, we cut down your administrative burden.
  • Empowered Patient Interaction: Allow patients to manage their insurance details, enhancing their experience and your efficiency.
  • Psychiatry-First Approach: Our system is built for psychiatric practices, reducing common claim denials with real-time error checking and easy correction features.
  • Unparalleled Visibility: Stay informed with transparent tracking and comprehensive reporting, keeping you in control of your billing process.
  • Extensive Health Plan Access: Connect to over 38,000 health plans effortlessly, ensuring you're always in touch with the payers you need.

Learn how to take the stress out of insurance claims.

Osmind does more than help with insurance; it’s your all-in-one platform for running your modern private mental health practice.

Future-proof your practice with Osmind here.

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