Blog Post

How to Become a Preferred Provider with Payers

Learn how to become a preferred provider with your chosen healthcare payer.

Melissa Hughes
5 min read
October 6, 2020
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Jargon is a bad word.

Okay, jargon itself isn’t a bad word, but actual jargon—like the ludicrous number of initialisms that therapists have to memorize simply to navigate their profession—is pretty bad. Jargon muddies up communication, making it difficult to keep everyone on the same page and steepening the learning curve for new hires. To make matters worse, professionals across the country often use different terminology (i.e., jargon) to talk about the same thing. So, let’s clear up a little bit of healthcare jargon today. Specifically, let’s talk about preferred providers—what they are, and how to become one. 

1. Understand what preferred providers are. 

You know those PPO healthcare plans that patients often enroll in? Well, PPO stands for Preferred Provider Organization, which is (as you may already know) a health plan “that contracts with medical providers, such as hospitals and doctors, to create a network of participating providers.” In other words, to be a preferred provider is simply to be a provider who is contracted and credentialed with a payer under a PPO. 

Preparing to Become a Preferred Provider

If you want to become credentialed and contracted with a payer’s PPO, your clinic must first check off a few crucial compliance and legal to-dos. Established clinics should have this info on lock, but new clinics will need to ensure that they have: 

  • A business entity (e.g., LLC, S-Corp, or PC) and tax ID number; 
  • Liability insurance; and
  • A practice address. 

Additionally, each provider must have an NPI (Type 1 or Type 2, as applicable), an active state license, and ideally, an up-to-date Council for Affordable Quality Healthcare (CAQH) profile. The CAQH profile is not required, but it can help shorten the credentialing process. 

2. Request an application. 

Next, assuming you’ve already picked a payer to credential and contract with, it’s time to reach out to said payer and request an application. Nowadays, most of this process takes place online, but Tamara Suttle, a Licensed Professional Counselor, recommends contacting the payer’s provider relations department, as it’s a good opportunity to build a human connection. Plus, Suttle says you can ask the representative about attributes the payer wants represented on its panel. (We’ll come back to this in a moment.)

Be sure to read the application carefully, and reach back out to the provider relations rep if you have any questions or concerns. Each payer’s credentialing process is slightly different, so you want to make sure you’ve crossed your t’s and dotted your i’s. 

3.  Sleuth out the needs of the payer and beef up your application. 

As you complete the payer’s application, keep an eye out for areas where you can differentiate yourself (and your practice) and thus, give yourself a leg up in the credentialing process. Some payers have panels that are near or at capacity—meaning the payer may only accept providers who fill very specific needs. According to Suttle, there are numerous ways to set your clinic apart from the rest, including through your:  

  • clinic location, 
  • clinic hours, 
  • speciality, 
  • exceptional outcomes, 
  • cost-saving measures, 
  • advanced training and credentials, and/or
  • ability to speak multiple languages. 

This is where a conversation with a provider relations representative could come in handy. The rep may be able to reveal gaps that the payer is looking to fill. If you can capitalize on those needs, then you’re more likely to be folded into a competitive payer’s panel. Really, any relationship with a local managed care professional who is familiar with the needs of the area could prove helpful. 

Timing Out

And finally, don’t forget to be timely! Filling out credentialing applications is a time-consuming task, but Suttle says that if you wait too long to complete and submit your application, you’re at risk of having it time out and become invalid.

4. Document the application process. 

Before you turn in your credentialing application, be sure you’ve documented the entire application process. Make copies of everything that you plan to send the payer, and document the conversations you had with representatives from the provider relations department. This will help you keep your information straight so you can easily answer any questions the payer ends up asking. Additionally, Suttle recommends documenting important exchanges through email—even if it means sending an email to verify anything communicated verbally—“so that you will have a paper trail to confirm your understanding of contractual details and expectations.”

After you turn in your application, all you can do is sit and wait. This process can take anywhere from three to six months, so don’t expect a quick response from the payer. 

5. Receive, negotiate, and sign a contract.

Eventually, the payer will contact you to either accept or deny your application. If all went well, you’ll move on to the contract negotiation phase. The payer will send you a contract, and it is up to you to review it and initiate negotiations regarding any sections that you feel are unreasonable or unfair. (Not sure how to do that? Check out this guide.) 

This step is critical to your overall success, because payers sometimes slip sneaky clauses and unfavorable rates into contracts, assuming that providers will simply accept them—no questions asked. Remember, you can always ask questions and suggest revisions! And while insurance companies have certainly earned a reputation for playing hardball, they are willing to negotiate most contracts.

Closing the Deal

Once you and the payer have settled on the contract, it’s time to sign it and seal the deal. Congratulations! You’re now a preferred provider for that specific payer!

Jargon is somewhat of a healthcare gatekeeper. It can obfuscate communication and keep well-meaning people in the dark. But not today! Now you know what a preferred provider is—and how to become one. Still have questions? Hit us up in the comment section below. 


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