Recent changes from the Centers for Medicare and Medicaid Services (CMS) will affect billing procedures for Critical Access Hospitals (CAHs), Rural Health Clinics (RHCs), and independent groups with privilege-only providers. These updates, effective July 1, 2025, require credentialing teams to review affiliations and reassignments to avoid claim denials.
According to the new regulations, CAHs using Method II billing must ensure that all providers listed on UB-04 claims—including independent, contracted, or privilege-only providers—have formally reassigned their 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.” Both the provider and the CAH’s authorized official must sign any new reassignment requests.
Credentialing teams are advised to review all provider relationships and confirm that these are documented in PECOS via reassignment. They should also clarify whether their facility uses Method II billing and document affiliations and reassignments for both employed and privilege-only practitioners.
For RHCs, if enrolled as a facility billing Medicare, a CMS-855A form is required, linking privileged providers to the facility’s Tax ID. If structured as a group practice or supplier for professional services, a CMS-855B form is necessary. RHCs integrated under Method II CAH do not need a separate CMS-855B form if benefits are reassigned; however, credentialing must confirm these arrangements.
Facilities that bill for contracted or privilege-only providers must submit a CMS-855A form to link providers to the facility’s Tax ID and document reassignment in PECOS. Credentialing teams now have added responsibility for verifying documentation in PECOS and facilitating provider education when surrogacy access is needed.
Starting July 1, 2025, CMS will systematically edit claims for proper reassignment presence and reject those missing correct affiliations. This places responsibility on credentialing teams to proactively address gaps. Audit readiness now requires written documentation of billing agreements and reassignments for all providers.
Credentialing teams are encouraged to confirm their facility’s billing model, review all provider affiliations in PECOS linked to the facility’s Tax ID, validate billing forms for contracted or privilege-only providers, and verify audit documentation supporting billing relationships.
The new requirements mean credentialing teams must work closely with billing departments and provider offices to ensure compliance as staff or privileged provider rosters change.
Further details about these regulatory changes can be found on the CMS website:
Information regarding critical access hospitals can be accessed at https://www.cms.gov/files/document/mln006400-information-critical-access-hospitals.pdf.
Additional information on operational instructions is available at https://www.cms.gov/files/document/r13041otn.pdf.
“These changes—effective July 1, 2025—require a more integrated approach by credentialing teams to prevent denials and maintain compliance, especially regarding reassignment and documentation for all providers, including privilege-only and contracted clinicians.”
