We often run into providers who are having serious issues with their medical insurance billing that all stem back to billing under both an EIN# and their social security # as identifying tax information. Most people think it's not a big deal, and how messed up can it get. But you would be amazed at how much a providers income can be affected by the billing not being submitted correctly regarding the tax ID# that is submitted to the insurance carriers. With NPI numbers now in the picture, the confusion has grown.
It was very common for a provider to have begun their practice years ago and to have started out billing under their social security number. Many did this because it was just easier. They figured they could switch over to an EIN# number later on, when their practice was bigger. The problem is that switching from a social security number to an EIN number is not a simple task and it usually freaks your accountant out. Actually, the problem is that the accountant doesn't understand that it is a problem with the insurance carriers and they switch them over without advising them. The accountant tells the provider it's no big deal to switch, when it is.
When a provider changes any information regarding their practice they must notify all insurance carriers using the required method of each insurance carrier. When changing tax ID information, many commercial carriers require that new contracts be signed. Even though the provider may have been in network with an insurance carrier for years, when switching to an EIN# it is as if it is an entirely new provider. Medicare requires that the appropriate CMS forms be completed. In any case, the switch must be reported using the appropriate format.
In addition to switching to a EIN#, the provider must also obtain a group, or Type II NPI number to correspond with the tax ID number and business name. The provider keeps the individual or Type I NPI to identify themselves as the rendering provider but uses the Type II NPI for billing purposes. An individual or Type I NPI cannot be used with an EIN# and a legal business name.
When billing insurance claims the correct information must appear in the correct locations. For example, the individual NPI must be in the rendering physician box (24J on the CMS form) and the type II or group NPI must be in the provider billing information (33A on the CMS form). The EIN# must be in box 25 on the CMS form with the EIN box checked. But just having the information in the right boxes does not ensure claims will be processed that way. The insurance carriers must also have this information on their provider files this way as well.
We have had many providers who have switched from their social security number to an EIN# number somewhere along the line and cannot figure out why the are not getting payments. Many times when we look into the problem we find that they are billing under their tax EIN# but they are enrolled with the insurance carrier under their social security number. When claims are submitted under the EIN# they are either processed out of network or denied. So if you have a provider who is receiving a lot of unexplained denials, or claims are being processed out of network when they are participating, you may want to see if they have switched to a tax ID number recently. That may be the whole problem. Whether billing under a social security number or a tax ID/EIN number, it is important to make sure you are billing the way it is set up in the insurance carrier's system or you can experience major problems with your insurance claims causing your accounts receivable to get out of control.
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