September 4, 2025
Policy Update: Important Information for CAHs Billing under Method II
The Centers for Medicare & Medicaid Services (CMS) issued a reminder that Critical Access Hospitals (CAHs) can bill for facility and professional outpatient services only when physicians and or practitioners reassign their billing rights to the CAH, also know as Method II billing.
CAHs can prevent claim denials with reason codes 31006 and 31007 (indicating that providers don’t have the reassignment on file in the Provider Enrollment, Chain, and Ownership System (PECOS) if they submit the reassignment application through PECOS or the paper Form CMS-8551).
Starting in January 2026, CMS will deny CAH claims for professional services if a reassignment is not in PECOS.
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Click Here to Access Information for Critical Access Hospitals (PDF) booklet (revised to add reassignment information.