What's different here
- Medical and health care payments are reportable even to corporations. 1099-MISC box 6 covers payments to physicians, other providers and suppliers of medical services, and the corporate exemption doesn't apply. Most AP systems default corporations to "no 1099"; a health-system vendor master needs the override.
- Providers need more than a TIN match. A provider's TIN can match IRS records while the NPI is inactive, the Medicare enrollment is revoked, or the individual has opted out. Paying, credentialing or billing under that provider is a CMS problem, not an IRS one, and the checks are separate databases (NPPES, PECOS, the opt-out list).
- Exclusion screening is mandatory, not optional. HHS-OIG's LEIE and the state Medicaid exclusion lists must be checked at hire or contract and monthly thereafter for anyone whose work is billed to federal healthcare programs; payments to an excluded party are non-reimbursable and can trigger civil monetary penalties. OFAC still applies on top.
- Locum tenens, 1099 physicians and group practices produce the classic line-1 problem: the physician's SSN with the practice name, or the practice EIN with the physician's name. See the W-9 name guide.
- Patient refunds and settlements are generally not 1099 reportable, but attorney settlements are (box 10, gross proceeds), and the attorney's TIN needs verifying like any other.
A vendor-onboarding sequence that covers both regimes
- Collect the W-9 (or W-8 for foreign providers and researchers) and verify the name/TIN pair against IRS records before setup.
- For clinicians and clinical vendors: validate the NPI in NPPES, confirm Medicare enrollment status in PECOS, check the opt-out list, and record the dates.
- Screen the entity and its principals against OFAC SDN/Consolidated, SAM.gov, the OIG LEIE and your state's Medicaid exclusion list; re-screen monthly.
- Flag corporations that receive medical payments so the 1099-MISC box 6 rule applies at year end.
- Keep the W-9, the match result, the NPI/PECOS checks and the exclusion screens in one record; a CMS audit and an IRS notice will each ask for their half.
Notices you'll see
- CP2100 listings dominated by individual providers paid through group practices, and by vendors set up from an invoice rather than a W-9.
- Notice 972CG amounts driven by the volume of 1099-MISC box 6 filings; the medical-payment rule means health systems file far more 1099s than businesses of similar size.