Recent updates from the Centers for Medicare and Medicaid Services (CMS) will affect how credentialing and billing are managed at Critical Access Hospitals (CAHs), Rural Health Clinics (RHCs), and independent groups with privilege-only providers. The changes, effective July 1, 2025, focus on billing types and facility setup, requiring credentialing teams to review affiliations and reassignments to avoid claim denials.
According to the new rules, 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.” Both the provider and the CAH’s authorized official must sign any new reassignment requests as part of compliance.
Credentialing teams are now required to review all providers, including those who are contracted or have only privileges at a facility, and validate that these relationships are documented in PECOS via reassignment. Facilities must clarify their billing type since Method II requires closer review of affiliations for both employed and privilege-only practitioners.
For RHCs enrolled as facilities and billing Medicare, a CMS-855A form is necessary. Providers privileged at these sites must be linked to the facility’s Tax ID. If an RHC operates as a group practice or supplier billing for professional services, a CMS-855B form is required. There is an exception for RHCs integrated under Method II CAH; they do not need a separate CMS-855B if benefits are already reassigned.
Facilities that bill for contracted or privilege-only providers must submit a CMS-855A form to link these providers to the facility’s Tax ID and document reassignment in PECOS. Credentialing teams are responsible for verifying this documentation 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 additional responsibility on credentialing teams to proactively address gaps. Audit readiness now requires written documentation of billing agreements and reassignments for all providers.
Credentialing teams should confirm their facility’s billing model—whether using Method II for CAHs or whether RHCs use CMS-855A or CMS-855B forms—and ensure every provider listed on claims has properly reassigned benefits in PECOS. They should also check audit documentation supporting all billing relationships.
The updated requirements emphasize coordination between credentialing teams, billing departments, and provider offices to maintain compliance as staff rosters change. More information about these changes can be found in official guidance from CMS at https://www.cms.gov/files/document/mln006400-information-critical-access-hospitals.pdf and https://www.cms.gov/files/document/r13041otn.pdf.
