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An Approach to Medicaid NPI Denial Reduction

By William Koczan, Manager, Medicaid Eligibility Services and Roseanne Raynor, CPC, Coding Consultant

Many health organizations often lack internal resources and/or expertise to reduce Medicaid denials and appeal denied claims.  The financial implications of not addressing these denials can be severe.

This article will focus on National Provider Identifier (NPI)-related claims denials, a type of Medicaid denial that can cost organizations significant money, but can be reduced or even eliminated with proper attention and focus.  NPI denials typically stem from services rendered by providers not enrolled in the Medicaid program.  Providers do not need to accept Medicaid; however, under the Patient Protection and Affordable Care Act, non-billing providers (also known as ORP providers) must enroll under their practicing state’s Medicaid plan to avoid claims denials*.  The ORP Rule and implementation dates associated with the rule vary from state to state.

For example, New York required “non-billing” providers to enroll by April 1, 2013 while New Jersey required enrollment by January 1, 2013.  Healthcare professionals, including other healthcare providers that order, prescribe, refer or provide services to Medicaid fee-for-service beneficiaries, must enroll in the NJ Medicaid program for billing purposes only.  In short, providers can treat Medicaid FFS beneficiaries without the contractual agreement of a participating provider.

NPI denials can range from missing NPI numbers, inadequate combination of NPI and taxonomy codes for providers, and lack of enrollment just to name a few.  Our analysis shows that of all the NPI-related denials, those due to the lack of Medicaid enrollment for attending, operating or referring physicians are the most prevalent.  Our data has further identified that non-enrollment denials can lead to significant revenue loss as shown on the sample data set below.

Account Number

   Total Charges


   Error Code

   Error Code Description
















These financial impacts can be further divided into NPI denials by provider. (Sample data below)


    # of Unpaid Accounts

    Outstanding Balance

    Expected Payment (Lost Revenue)

Dr. A.

    23 accounts



Dr. B.

    13 accounts



This type of data analysis provides detailed information about potential revenue loss and which physicians must become enrolled.  To help mitigate these losses, healthcare organizations should check the Medicaid provider directory available in each state to determine Medicaid enrollment status.  However, healthcare organizations may lack time and resources to conduct ongoing searches and therefore may need outside assistance with their Medicaid enrollment and eligibility process.

In our experience, physicians have found the non-provider application process arduous and are often reluctant to apply (fearing enrollment may result in accepting Medicaid).  And it is true that the application process can be labor-intensive as it involves many state departmental applications.

However, consider that claims that are denied for non-enrollment can potentially be approved if “non-billing” providers become enrolled within a specified time period and the claim is resubmitted.  Although the non-provider application process may be time-consuming, the benefits are worthwhile from a financial perspective.

Through this process, it is imperative to cultivate relationships with on-site management and various departments within the hospital.  By interfacing with departments such as Patient Financial Services (PFS), Patient Access Teams, Social Services, physicians’ administrative teams, and of course the physician, the likelihood of physician cooperation to ensure that they are properly enrolled increases.

A complete NPI-denial process streamlines everything from forms, communication to education and the importance of enrolling, which helps to reduce the risk of future claims denials.

*Requirements for billing/non-billing provider NPI enrollment may vary by state. 

    For more information, please contact Juan Chico, Executive Director at 609-918-0990 or [email protected]

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