Practice acquisition billing integration: TIN, NPI, Medicare and A/R

How do we integrate billing after acquiring a practice?

Fix the legal identity first, then payment routing, then the old A/R, then systems and fee schedules. The tax ID, the NPI and the Medicare enrollment decide whose name goes on the claim and where the money can be sent, so everything else waits on them.

This guide is for the billing side of an acquisition: a group buys a practice, a health system takes in a physician group, or two groups merge. It covers the identity filings, the A/R at closing, payer contracts, fee schedules, systems and the numbers that show whether the integration is working. Adding a new site to an existing enrollment, step by step, is in credentialing new locations and is not repeated here.

It is general information, not legal or tax advice. The purchase agreement, the tax treatment and the Medicare filing route depend on how the deal is built, so have counsel and your tax adviser review them.

What is the order of work from signing to six months after closing?

Start the diligence before signing, file the identity changes on the schedule the rules set, and keep the acquired practice's billing running on its own system until the new routes have paid cleanly. Consolidating systems is the last step, not the first.

Does the deal structure change which Medicare and tax filings we need?

Yes. An asset purchase, a stock purchase and a merger look alike in the press release but produce different tax IDs and different Medicare reports. Ask counsel to name the structure before anyone opens an application.

The IRS page on new EINs says a corporation does not need a new EIN if it is the surviving corporation after a merger, and that a merger that creates a new corporation does require one. It says a partnership does not need a new EIN if a change in ownership does not result in the partnership's termination. These are the IRS's own examples and do not replace tax advice.

What is a change of ownership for Medicare?

Under 42 CFR 489.18(a), a change of ownership for a Medicare provider is defined by entity type. A merger of the provider corporation into another corporation, or a consolidation that creates a new corporation, is one. A transfer of corporate stock, or a merger of another corporation into the provider corporation, is not.

Partnerships and leases follow their own lines. In a partnership, removing, adding or substituting a partner is a change of ownership unless the partners expressly agree otherwise as state law permits. A lease of all or part of a provider facility is a change of ownership of the leased portion. When a change of ownership happens, the existing provider agreement is automatically assigned to the new owner, subject to the conditions it was issued under.

The filing rule depends on the enrollee. For a provider that falls under part 489, 42 CFR 424.550(b) says the current owner and the prospective new owner must complete and submit enrollment applications before completion of the change of ownership. If the new owner does not submit a new application within 30 days of the change, CMS may deactivate the billing number.

For suppliers not covered by part 489, which includes physician groups and clinics that enroll on the CMS-855B, 42 CFR 424.550(c) says any change in ownership or control must be reported on the enrollment application within 30 days. It adds that a change of ownership that also changes the tax identification number generally requires a new enrollment application from the new owner. The reporting list in 42 CFR 424.516(d) puts a change of ownership, an adverse legal action and a change, addition or deletion of a practice location in the 30 day group for physicians, practitioners and their organizations, and all other changes in 90 days.

The Medicare Program Integrity Manual, chapter 10, gives MAC staff the same split. A transfer of stock that is not a change of ownership under 489.18 is handled as an ownership change under 424.516, and the provider is told to submit a CMS-855 within 30 days of the return letter. If a CMS-855B ownership change also changes the tax ID, the manual tells the contractor to ask for an initial CMS-855B to enroll as a new supplier and a voluntary termination application, both within 30 days of the return letter. The manual also says no application fee is charged when a CMS-855B reports a change of ownership, or when an application reports a change in TIN.

How do we handle TIN and NPI changes?

Change the tax ID and NPI wherever the acquired site's claims, payer files and bank records still show the old ones, and do it on the date the legal entity actually changes. A claim that carries one entity's NPI and another's tax ID is the quickest way to create rejections and misdirected payments.

The TIN is the tax identification number the payer uses to pay and to report income. On the CMS-1500, item 25 carries the provider's federal tax ID and item 33a carries the billing provider's NPI. On the UB-04, form locator 5 is the federal tax number and form locator 56 is the billing provider NPI. Medicare's manual says tax identification information is used in determining accurate NPI reimbursement, and that claims submitted without tax identification information may be delayed.

• List every entity, tax ID, NPI and billing address in the acquired practice before closing.
• Decide, entity by entity, which ones survive the deal and which ones end.
• Update the NPPES record within 30 days of any change in its required data elements (45 CFR 162.410(a)(4)).
• Update the billing system's provider table on the effective date, not the week after.
• Send each payer a new W-9 and the written change notice its manual calls for.
• Check the clearinghouse and each payer's remittance setup, since they are keyed to the old IDs.

The NPI standard itself carries no intelligence about the provider in the number (45 CFR 162.406(a)), so whether an acquired entity keeps its NPI depends on whether that entity still exists after the deal. Do not end an NPI until the claims and enrollment tied to it are cleared. If a covered provider uses a business associate to run claims, 45 CFR 162.410(a)(5) says it must require that business associate to use its NPI and other NPIs appropriately in the transactions.

What happens to physician reassignments after an acquisition?

Each physician and practitioner who reassigns Medicare payment to the acquiring group needs a reassignment on file for that group, and the old reassignment to the seller needs to end. Medicare has discontinued the CMS-855R, and reassignments are now handled on the CMS-855I.

Under 42 CFR 424.80, Medicare generally does not pay amounts due a supplier to any other person under reassignment or any direct arrangement. The exceptions include payment to an employer when the supplier must turn fees over as a condition of employment, and payment to an enrolled entity under a contractual arrangement. The entity and the supplier are jointly and severally responsible for any overpayment to that entity, and the supplier keeps unrestricted access to claims the entity submits for the supplier's services.

A reassignment on the CMS-855I needs the reassignee's authorized official to sign. When a physician ends a reassignment, the manual treats the day after the stated termination date as the effective date, and payment to the old reassignee stops from that date. Time the new reassignment and the termination so that no date of service falls into a gap, and ask the MAC how it will process the pair.

Do we need new payer enrollment after an acquisition?

Usually yes for something: a Medicare filing, a Medicaid update and a notice to each commercial payer. Which of those is a new enrollment and which is a change of information depends on the structure of the deal and on each payer's rules.

Medicaid

Medicaid enrollment is run by each state agency. At the federal level, 42 CFR 455.104(c)(1)(iv) requires disclosing entities to provide ownership and control disclosures within 35 days after any change in ownership. The state agency must revalidate every provider's enrollment at least every 5 years under 42 CFR 455.414. Your state agency may add its own forms and timing, so read its provider enrollment page before closing.

Commercial payers

No federal clock applies across commercial payers. Each plan's contract and provider manual decides whether the acquired practice's contract continues, must be assigned, or must be replaced, and whether credentialing starts over. Ask each payer in writing for the effective date of the change, the claim-submission instructions for dates of service before and after that date, and whether the practice's contracted rates continue.

The work of adding practice locations to payer files, with CAQH updates, is the subject of credentialing new locations. The credentialing and enrollment service covers applications for providers and groups.

What happens to the acquired practice's payer contracts?

A contract does not always move with the practice. The agreement's assignment and change-of-control clauses decide whether the payer must consent, whether the rates continue, and whether the payer can reprice the group at the acquirer's rates.

• Collect every payer agreement, amendment and fee schedule the acquired practice holds.
• Read the assignment, change of control and termination clauses, and have counsel summarize them.
• Send each payer the notice the contract requires, and ask for written confirmation of the continuing rate.
• Keep billing at the acquired practice's contracted rates until the payer confirms a change in writing.
• Find contracts that pay a percentage of billed charges, since changing the charge master would change that payment.

Our payer contracting service handles contract review and rate work for groups. The point for billing is simple: do not change the fee schedule that drives expected payment until you know which contract each claim will be paid under.

How do we standardize fee schedules and charge masters?

A charge master or fee schedule lists what you bill, not what the payer pays, so standardizing charges can wait until the contracts are settled. Then pick one structure, map each acquired code to it, and apply it from a stated date for all new charges.

A chargemaster is the master list of billable items with prices, and a fee schedule is a payer's or a practice's list of amounts for services. Merging them follows an inventory, a code map, a pricing rule and a cutover date. The chargemaster review guide covers how a hospital reviews its lines and update triggers.

• Inventory every active charge line at the acquired practice.
• Map each code to the parent line, or mark it as new.
• Check that each line has its revenue code if it bills on a UB-04, and its modifier rules if it bills professionally.
• Set one effective date and stop using the old list for new charges.
• Re-test a sample of claims from each payer after the change.

What happens to the acquired practice's A/R?

It belongs to whoever the purchase agreement says it belongs to, and the billing team must know that answer before closing. Common patterns are that the seller keeps and collects its pre-closing A/R, the buyer purchases it at a price, or the parties split it by date of service.

Payment routing follows from that answer. Medicare EFT goes to a bank account in the legal name of the enrolled entity, and the CMS-588 instructions say that after a change of ownership or practice location you must submit a change of information to the Medicare contractor before or with the EFT agreement. Ask the MAC how payments for pre-closing dates of service will reach the right party, and do not improvise with informal accounts.

• Write the date-of-service cutoff and the owner of each side into the purchase agreement.
• Decide who works the seller-owned claims, and under which enrollment they are billed.
• Set a timetable for remitting misdirected payments between the parties.
• Put credit balances and refund obligations in the agreement, and say who pays them back.
• Agree who owns any overpayment found after closing.

The 60-day overpayment rule has a 6 year lookback, as the 60-day rule page explains, so overpayments in the acquired practice's history can surface after closing. Counsel should decide who bears them. The Medicare filing limit of 1 calendar year from the date of service also runs on unbilled charges from before closing, as the timely filing limits page sets out.

For old balances, an A/R recovery plan names the order of work and the deadline for each claim. See also how to switch billing companies for the handoff of open claims between billing teams, which applies if the acquired practice used an outside company.

How do we audit the acquired practice before closing?

Sample the claims, not just the reports. A billing diligence compares what the practice says it bills with what payers actually paid, and what is still open with what is collectable.

Medicare requires providers and suppliers to certify that they do not employ or contract with individuals or entities excluded from Federal health care programs (42 CFR 424.516(a)(3)). Run the exclusion screening on the acquired staff before closing, not after the first payment is held.

What billing risks come with acquired practices?

• Unreported ownership changes that lead to deactivation of billing privileges.
• Unbilled charges that pass the filing limit during the transition.
• Payments that continue to flow to the seller's account.
• Overpayments and credit balances in the acquired history.
• Claims that carry the wrong tax ID or NPI for the date of service.
• Contracts that do not move with the entity and quietly reprice.

Should we migrate the acquired practice to our EHR?

Migrate only after the payment routes and enrollment are clean, and only if the acquired site's workflow will fit the parent system. Running the acquired site on its own system for a stated period is the safer default, and a decision made on dates, not preference.

There is no rule that sets how long two billing systems may run. Keep the legacy system until the A/R billed from it is resolved, every payer has confirmed the new payment route, and the oldest claim has passed its filing and appeal windows. Then move it to read-only access. Medicare requires documentation for ordered, certified, referred or prescribed services to be maintained for 7 years from the date of service under 42 CFR 424.516(f), so confirm you can read the records you are retiring.

The EHR pages list the systems we work with. For groups with several systems, the large groups and health systems page describes billing across locations.

How do we train acquired staff on our billing workflow?

Train by role and by the workflow's failure points, not by a general orientation. Registration, charge entry, coding review and denial follow-up each have a short list of controls the acquired team must meet from the first day.

• Give each role a one-page standard for the steps it owns and the errors it must catch.
• Run the acquired team's real denials through the new workflow as the training material.
• Pair each acquired biller with a named lead for the first payment cycles.
• Hold a weekly review of rejections and denials by cause, with the staff who caused them.
• Test charge entry with a daily check until the error rate settles.

What KPIs track integration success?

Track the same few numbers for the acquired site and the parent group, before and after closing, with the same formula. If the two sides define a number differently, the comparison tells you nothing.

The medical billing KPIs guide defines each in detail. Review these weekly in the first two payment cycles after closing, then monthly.

How does Nucleus Align handle billing after an acquisition?

We align each EHR, clearinghouse and payer portal workflow with verified team experience, standard claim validation, reconciliation controls and performance monitoring. For an acquired practice, that starts with the identity and payment routing questions in this guide.

Our credentialing and enrollment service supports the applications, and our revenue cycle management runs claims, denials and old A/R across the combined group. Claims go out within 24 hours of charge entry, denials are worked within 48 hours, and we use automated eligibility checks and multiple claim scrubbing rules. We sign a Business Associate Agreement with every client.

Our revenue cycle management service covers the full cycle. To plan an integration, book a call.