As you are aware, credentialing and billing are deeply interdependent, and recent CMS updates effective July 1, 2025, have introduced changes that impact this relationship particularly with respect to billing types and Facility Setup. Credentialing Team must be knowledgeable about this setup to avoid denials.
All Critical Access Hospitals, Rural Health Clinics and any independent groups that have privilege only providers providing patient care at any of these entities should ask their Credentialing teams to review their affiliations and reassignments. Even though these changes impact revenue cycle, it’s your credentialing team that has to ensure all classifications and reassignments are accurately documented and where gaps are identified, remedy that situation.
Credentialing Team should be asking this question – How is your current billing system configurations is setup especially for Medicare.
Key Regulatory Changes & Action Steps your Credentialing Teams must take to avoid denials
1. Method II Billing for Critical Access Hospitals:
- Effective July 1, 2025, Critical Access Hospitals (CAHs) using Method II billing must ensure that every provider listed on UB-04 claims including independent, contracted, or privilege-only providers has formally reassigned billing rights to the hospital in PECOS. If reassignment is missing, CMS will deny the professional component with remark code N253: “Service not payable due to billing conflict”.
- The attending or rendering provider must be linked (reassigned) to the CAH’s Tax ID through PECOS. Both the provider and the CAH’s authorized official must sign any new reassignment requests as part of compliance.
2. Rural Health Clinic (RHC) Setup:
- Facility Billing (CMS-855A): If your RHC is enrolled and bills Medicare as a facility, a CMS-855A is required. Providers privileged at these sites must be linked to the facility’s Tax ID.
- RHC (Group/Supplier): If the RHC is structured as a group practice or supplier billing for professional services, CMS-855B is required.
3. Contracted/Privilege-Only Providers:
- Facilities billing for contracted (not directly employed) providers must submit a CMS-855A to link providers to the facility’s Tax ID/855 and document reassignment in PECOS.
- Credentialing teams are now responsible for verifying and ensuring PECOS documentation and facilitating provider education if surrogacy is needed.
Actionable Checklist for Credentialing Teams
- Confirm your CAH/RHC’s billing model: Are you using Method II for CAHs? Are RHCs set up under CMS-855A (facility) or CMS-855B (group/supplier)?
- Review all provider affiliations: Ensure every provider listed on claims has reassigned benefits in PECOS and is linked to your facility’s Tax ID.
- Validate billing for contracted/privilege-only providers: Submit necessary CMS-855A forms and coordinate surrogacy if your team needs to process reassignments.
- Check audit documentation: Verify that billing agreements and reassignment documentation are ready for audit or payer review.
