Credentialing vs. Contracting in ABA Therapy: Key Differences Explained for Providers

If you’re a healthcare provider trying to join insurance networks, you’ve probably heard the words credentialing and contracting. But what do they really mean — and which comes first? It’s easy for providers to mix them up and think ABA credentialing and contracting mean the same thing. But they don’t. Each plays a different role, and understanding credentialing vs contracting can help you avoid claim denials, payment delays, and revenue loss.

Whether you’re a solo therapist, part of a group practice, or managing a growing ABA clinic, knowing how contracting and credentialing work together helps you stay compliant and get reimbursed faster. Let’s break it down in simple terms.

What Is Credentialing?

Credentialing is the process that proves you're qualified to offer healthcare or therapy services. It’s like a background check, but specific to your professional training and licenses.

Insurance companies require this step to make sure you're properly licensed, certified, and meet all standards to treat patients. If you're not credentialed, they won’t pay you—even if you provide excellent care.  If you're new to this process, start with this helpful step-by-step credentialing guide for healthcare providers to understand exactly what’s involved

Why Is Credentialing Important for Healthcare Providers

• It ensures only qualified professionals deliver care.

• It protects clients, payers, and your practice.

• It’s required before any insurance payer will reimburse you.

• It determines your eligibility for contracting and sometimes influences reimbursement rates.

Whether you're a physician, therapist, or ABA provider like a BCBA or RBT, credentialing is your first step to getting accepted into insurance networks.

How does the Credentialing Process Work?

Credentialing requires careful documentation and attention to detail. Even one missing document or a data entry error can delay approval.

Here’s a simplified overview of how it works:

1. Gather all documents – Your degrees, licenses, certifications, malpractice insurance, and work history.

2. Complete applications – Most insurance companies use an online system or require submission through CAQH, the Council for Affordable Quality Healthcare.

3. Verification – The payer cross-checks your data against state boards, licensing databases, and professional directories.

4. Approval and listing – Once verified, your name is added to the payer’s internal list of approved providers.

For ABA providers just getting started, you can explore a step-by-step resource that simplifies the entire credentialing process and helps you understand each stage with clarity and confidence.

What Is Contracting?

Once you’ve finished credentialing, the next major step is contracting—and this is the part that actually gets you paid.

While credentialing proves you’re qualified, contracting sets up your official agreement with the insurance company. It’s a legal document that confirms you’re now an in-network provider, spells out how much you’ll be reimbursed, and lays down the rules you and the payer both agree to follow.

Many providers think credentialing and contracting are the same—but they’re not. They’re two different steps. And missing this one means your claims could get denied or underpaid, even if you’re fully credentialed.

What Contracting Includes

• Fee schedule – Lists how much the payer reimburses for each CPT code.

• Terms and conditions – Outlines provider obligations and payer expectations.

• Effective date – Defines the date on which you officially join the network.

• Reimbursement details – Explains payment frequency and claim submission requirements.

In short, credentialing verifies your qualifications, and contracting makes your relationship with the payer official.

Contracting vs. Credentialing: The Key Differences

While contracting and credentialing work hand in hand, they are two separate steps in becoming in-network. Here’s a quick comparison to make it clear:

Aspect	Credentialing	Contracting
Purpose	Verifies your qualifications and licenses.	Establishes payment terms with payers.
Focus	Compliance and eligibility.	Financial and legal agreement.
Outcome	You’re approved to join the payer’s network.	You can now bill and receive payment.
Timing	Must be done first.	Comes after credentialing approval.
Involves	Documentation, verification, and CAQH updates.	Fee schedule negotiation, signing contracts.

Understanding this difference saves time and frustration when setting up ABA credentialing or working with insurance credentialing services.

Why Do Providers Need Both Credentialing and Contracting?

You can’t have one without the other. Both credentialing and contracting are vital for healthcare and ABA providers who want to join insurance networks and get paid for their services.

Without credentialing, payers won’t recognize you as a verified or qualified provider. Without contracting, you can’t bill for sessions or receive reimbursements.

Together, contracting and credentialing form the foundation of a legal and compliant practice in the U.S. healthcare system. They protect your reputation, ensure timely payments, and reduce billing errors.

Even if you’re already licensed and experienced, payers require recredentialing every few years to confirm your information and keep your status active. Keeping your credentials updated helps maintain payer trust and prevents interruptions in your revenue flow.

Common Challenges in Credentialing and Contracting

Both credentialing and contracting can take time—sometimes 30 to 180 days, depending on the payer. But it's not just the timeline that causes issues; it’s the small mistakes along the way that slow things down.

Here are common errors that delay approval:

• Incomplete or outdated CAQH profile

• Wrong or mismatched NPI numbers

• Missing malpractice insurance

• Incorrect taxonomy codes

• No follow-up after submission

To prevent such issues, ensure you’re aware of the most frequent mistakes providers make during the credentialing process and learn how to avoid them effectively.

Another overlooked issue?

Failing to follow up. Many providers assume their application is moving forward, only to learn weeks later that it was never reviewed.

For ABA practices, these delays can mean missed sessions, delayed billing, and frustrated families. That’s why many providers rely on credentialing services for providers or medical credentialing software to reduce errors and stay on track.

Should You Outsource Credentialing Services?

If you’re managing a growing ABA therapy or healthcare practice, handling credentialing in-house can easily drain time and resources. Outsourcing ABA credentialing services isn’t just convenient—it’s a smart business move that can prevent costly mistakes and keep your practice running smoothly.

Key Benefits of Outsourcing Credentialing:

• Faster turnaround: Experts understand payer requirements, leading to quicker enrollments.

• Improved accuracy: Specialists ensure compliance and complete documentation.

• Regular follow-ups: Outsourced teams stay in touch with payers until approval.

• Less administrative work: Your staff can focus on patient care, not paperwork.

• Scalable support: As your practice grows, the service easily handles more providers.

Partnering with trusted ABA credentialing services helps your practice get approvals faster, reduce claim denials, and maintain steady cash flow. It allows you to spend less time on paperwork and more time focusing on your clients and their care.

FAQ

1. What is credentialing and contracting?

Credentialing confirms a provider’s qualifications, while contracting creates a legal agreement with insurance companies. Together, credentialing and contracting let healthcare providers join networks and receive timely reimbursements.

2. What is checked during an ABA credentialing process?

During ABA credentialing, insurance payers verify education, licenses, certifications, malpractice history, and work background to confirm the provider meets professional and legal standards required for network participation.

3. What are the two types of credentialing?

The two main types of credentialing are individual credentialing, which verifies a single provider’s qualifications, and organizational credentialing, which confirms a clinic or group practice meets payer requirements.

Conclusion

Understanding credentialing vs. contracting ABA therapy is key for every healthcare and ABA provider. Credentialing verifies your qualifications and compliance, while contracting connects you to payers for reimbursement. Together, they ensure smooth billing, fewer denials, and faster payments when managed through trusted credentialing services.