What is W-9 Form in Medical Billing? Things You Need To Know!

What is W-9 Form? 

Profoundly known as a request for taxpayer identification number, W-9 Form is one of the forms issued by the US government agency- Internal Revenue Service (IRS), which is responsible for the collection of taxes and enforcement of tax laws.

The sole purpose of the W-9 Form is to furnish all details to the IRS, about the individuals who carried out work for the company and how much the company paid them. In context of medical billing and revenue cycle management, it helps to authenticate and accelerate timely reimbursements, and reduce denials.

What information is sought in W-9 Form?

A W-9 form requires the following information:

• Name of the user
• Address- contact address, email address or the postal address
• Structure of business organisation- sole proprietorship, partnership, trust/estate or a corporation
• Business address (If different from home address)
• Tax identification number (TIN)

However, unlike any other tax forms, you will not have to submit it directly to the IRS but to your service provider who would file your information.

Why are you required to fill a W-9 Form?

It is a norm as set by the foreign financial institutions, which asks you to complete the W-9 Form to comply with the Foreign Account Tax Compliance Act (FATCA) requirements, under which all foreign financial institutions need to report certain information to the Internal Revenue Service pertaining to the accounts and income of their US clients.

According to the official website of the US government’s IRS, the payer is required to withhold 24 percent of the payments made to a US person, in a withholding situation. As discussed earlier, the financial institutions have reporting requirements under the FATCA and if you fail to fill the W-9 form, you will not likely get your reimbursement on claim proactively.

Why do you need to fill the W-9 Form correctly?

W-9 Form should be treated like any other important financial document because the Internal Revenue Service (IRS) is particular about the accuracy involved in these forms.

You need to make sure that you supply the correct factual information in the W-9 Form because the information you’ll provide to the providers will not be altered later.

If for any reason, you submit a form with some incorrect details- be it your address or even the social security number, you may have to deal with prosecution, heavy penalty and may even end up imprisoned. This is the reason you are requested to contact a seasoned accountant who can help you fill the form correctly.

Thus, W-9 Form plays a pivotal role in revenue cycle and denial management of medical billing. Submitting W-9 Form provides correct TIN (Tax Identification Number) of the providers to insurance companies, and consequently ensures timely reimbursement.