Credentialing is the process of establishing the qualifications of licensed medical professionals and assessing their background and legitimacy.

Credentialing is the process of granting a designation, such as a certificate or license, by assessing an individual's knowledge, skill, or performance level.

In the healthcare industry, credentialing is defined as a formal process that employs a set of guidelines to ensure that patients receive the best possible care from healthcare professionals who have undergone the most stringent scrutiny regarding their ability to practice medicine.

Many health care institutions and provider networks conduct their own credentialing, generally through a credentialing specialist or electronic service, which is reviewed by a credentialing committee. It may include granting and reviewing specific clinical privileges, and allied health staff membership.

Credentialing is the process the healthcare facility or managed care organization/health plan uses to collect and verify the “credentials” of the applicant. This includes verification of many elements, including licensure, education, training, experience, competency, and judgment.

Physicians and other healthcare providers who wish to provide care in a hospital, ambulatory care facility, or other healthcare facility must undergo an application process which includes verification of credentials. Additionally, providers that want to bill an insurance company and receive reimbursement for services as an in-network provider must undergo a process of credentialing. Healthcare facilities and health plans will verify relevant education including, medical school, residency/fellowship training, board certification, licensure, professional liability insurance and claims history, and will query the National Practitioner Data Bank (NPDB). The NPDB is an electronic repository containing information on medical malpractice payments and certain adverse actions related to healthcare practitioners, entities, providers, and suppliers. Although the basic aspects of credentialing are performed in the same way, different credentials are verified depending on the environment. For example, hospitals will typically request information concerning procedures performed in order to document that the applicant is meeting current competency requirements for the privileges requested, but health plans (insurance companies) do not typically collect this information because health plans do not grant privileges. Since healthcare facilities grant clinical privileges, these organizations will also write to contact other facilities where a provider has worked and obtain professional references to verify experience, and competency, and to determine whether any disciplinary actions were taken against the provider.

The approval process in a healthcare facility typically involves a review of the applicant's credentials and qualifications with recommendations for appointment and privileges made by the medical staff via a department chairperson, the credentials committee, and the medical executive committee. The approval process varies depending on the medical staff structure. The actual approval of privileges and appointments is made by the board of directors. Some healthcare facilities have a mandatory requirement for interviews, and some hospitals will only interview physicians under certain circumstances as defined in the medical staff's bylaws.

In a health plan, the credentialing process differs from that of a hospital. In a health plan, the provider enrolls in the provider panel network. After the application is submitted and credentials are verified, the approval process will involve review and approval by the network's medical director or credentialing committee.