You’ve finally been credentialed. You start seeing clients. Claims go out.
But then… they all come back denied.
If you’re a mental health provider in the U.S., this might sound painfully familiar. One of the most overlooked, and costly issues in insurance billing is confusion between Group and Individual NPI setups.
In this blog, we’ll break down the problem, explain why it happens, and how to fix it before it wrecks your revenue cycle.
What Is an NPI and Why Does It Matter?
Your National Provider Identifier (NPI) is like your tax ID for healthcare. It’s how payers identify you.
There are two types of NPIs:
- Individual NPI (Type 1): Assigned to a solo provider. Used when you’re billing as an individual.
- Group NPI (Type 2): Assigned to a legal organization or clinic. Used when billing as a group under one Tax ID (TIN).
Just because you are credentialed doesn’t mean your group is. And billing under the wrong NPI type is one of the most common reasons mental health claims get denied.
Why This Causes Billing Failures
Let’s say you’re credentialed with Aetna under your individual NPI, but you work in a group practice.
If your biller submits the claim under the group NPI, and the group itself isn’t credentialed or isn’t tied properly to your individual setup, the claim gets denied.
Credentialing looks “done” on paper.
But the claim is still missing a match in the payer’s system.
Every payer is different:
- Some credential both the individual and the group
- Others only care about one
- Many require separate applications for each
This mismatch can quietly delay payments for months if you’re not careful.
How One Therapist Lost Thousands
We worked with a therapist who joined a growing group practice in California. She was credentialed individually with major payers like Cigna and Optum. When she began seeing clients, the group’s billing system submitted everything under the group’s NPI. Everything got denied. For weeks.
Turns out, the group itself was never credentialed with some of those payers. The provider had to re-enroll or fix the claims manually. By the time it was resolved, she’d lost over $6,000 in delayed or missed payments.
How to Avoid This NPI Trap
Here’s how to get your house in order:
Know Which NPIs Are Credentialed
- Check with each payer: Are they credentialing you as an individual, or your group?
- Do they require both?
Match Billing Details to What’s on File
- Rendering provider NPI (you) must match what’s credentialed
- Billing provider NPI (your group) must be credentialed if it’s the one receiving payment
Keep NPPES Up to Date
- Your NPI registry must show accurate practice location and affiliations
Use the Correct Tax ID
- Claims often fail because the Tax ID and NPI combination doesn’t match the payer’s system
A Note for Group Practice Owners
If you’re building a group practice, it’s crucial to:
- Apply for a Group NPI (Type 2)
- Get credentialed as a group with each payer you plan to bill
- Link your individual providers correctly under your group NPI and Tax ID
Otherwise, your clinicians will see clients, but the claims will never stick.
Credentialing isn’t just paperwork, it’s the foundation of your revenue cycle.
And in mental health, small technical mistakes can lead to big financial gaps.
If your credentialing looks “done” but your payments keep bouncing, check your NPIs first. The mismatch between individual and group setup is one of the most common silent killers of practice income.
Need Help?
At PCH, we specialize in helping mental health providers set up clean credentialing and billing systems that actually get you paid.
Group and Individual Credentialing
Claims troubleshooting
Full-service billing and virtual team support
If you need help, connect with us @ 5163664144 or info@providerscentralhub.com
