What Are NPI Numbers?
NPI (National Provider Identifier) numbers are 10-digit numerical identifiers that uniquely identify individual providers or healthcare entities. Providers, employers, health plans, and payers use these numbers for billing purposes and electronic data transmission.
The Administrative Simplification provisions of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) required the development of a standard, unique health identifier for healthcare providers, which the NPI satisfies. The Centers for Medicare & Medicaid Services (CMS) oversees the issuance and regulation of NPI numbers, ensuring providers meet accountability standards.
Today, all covered healthcare providers, health plans, and healthcare clearinghouses must apply for and use an NPI when transmitting electronic health information as part of HIPAA transactions. NPI numbers are vital for integrated healthcare systems, ensuring accurate data management and seamless communication between different entities.
Why Are NPI Numbers Necessary?
Before NPIs were introduced, health plans and federal payers relied on different, non-standard identifiers for healthcare providers and suppliers, leading to administrative inefficiencies and increased errors in the claims submission process.
The NPI Final Rule established NPI numbers as the standard for unique health identifiers, simplifying claims processing and reducing administrative burdens. NPIs are critical for maintaining accountability across healthcare transactions, ensuring accurate reporting, and streamlining electronic communication across private and government health insurance programs.
All providers must use their NPI when transmitting any electronic health information. This requirement improves the efficiency and quality of Medicare, Medicaid, and other state and federally funded healthcare programs. Additionally, NPIs are essential for maintaining personal data security and reducing fraudulent claims by linking transactions to verified providers.
Who Needs an NPI?
Healthcare providers and organizations that meet the definition of a provider under 45 CFR 160.103 must obtain an NPI if they conduct HIPAA-covered transactions. This includes physicians, nurses, hospitals, dentists, and other entities transmitting protected health information electronically.
NPIs are required to apply for Medicare enrollment, file claims, and participate in federally funded health insurance programs. Providers must submit an NPI application through the National Plan and Provider Enumeration System (NPPES). Organizations that manage healthcare facilities or supplier networks also need to obtain an NPI to ensure compliance with HIPAA regulations.
What Are the Two Types of NPI Providers?
There are two types of NPIs issued by CMS:
Type 1 NPIs: Individual healthcare providers such as physicians, nurses, or dentists. Type 1 NPIs are personal and can only be assigned to one eligible provider.
Type 2 NPIs: Organizations, such as hospitals, group practices, or healthcare facilities. Organizations may apply for multiple NPIs to track different service lines or departments.
This distinction allows healthcare providers to apply the appropriate NPI for different administrative needs, ensuring accurate reporting and efficient data development.
When Did NPI Numbers Begin?
CMS began developing NPIs in 1993 to create a more efficient healthcare provider identification system. The NPI Final Rule, published on January 23, 2004, mandated the use of NPIs as the standard provider identifier. By 2007, all providers were required to file claims using their NPI, replacing the previous Unique Physician Identification Number (UPIN).
This transition ensured that all electronic health transactions followed the same standard, enhancing interoperability across the healthcare sector and improving data accuracy.
How Do You Apply for an NPI Number?
Healthcare providers and organizations can apply for an NPI through NPPES. Applications can be submitted online or via paper form, and the process typically takes about 20 minutes. Providers may receive their NPI within 10 days of submitting their application.
To apply, individual providers must create a user profile through the Identity & Access Management System. This step involves filing personal and professional information, ensuring all required data is accurate. The application requires details about the provider’s taxonomy, state licensure, and practice location. Complete instructions are found on the CMS website.
Healthcare organizations may apply on behalf of their employees by completing the necessary forms and submitting them through the NPI registry. Providers can also contact CMS for additional assistance if they encounter issues during the application process.
Since NPIs are required for billing and electronic health record updates, any missing or incorrect NPI may delay claims processing or result in rejected filings.
Does a Provider’s NPI Change?
Once issued, an NPI remains the same throughout the provider’s career, regardless of job or location changes. The NPI is a permanent identifier that does not expire or require renewal, ensuring consistent data management across different healthcare organizations.
The NPI does not replace other identification numbers, such as a provider’s taxpayer identification number (TIN), Drug Enforcement Administration (DEA) registration, state license number, or Social Security number. However, it does replace all previous identifiers used in healthcare transactions, billing, and claims. For any HIPAA-covered transaction, the NPI is required as the primary identifier, ensuring accountability and simplifying administrative processes. Health plans may continue to use other internal identifiers, but NPI numbers must be included in all external communications involving HIPAA-compliant data transfers.
How to Use the NPI Registry:
The NPPES NPI Registry is a free, government-managed tool that allows users to perform an NPI lookup for individual providers or organizations. This resource is available to anyone and can assist healthcare entities in verifying provider data.
To perform a search, users can enter an NPI number, provider name, or organizational name. The following information is available in the search results:
- NPI number
- First and last name of the provider
- NPI type (Type 1 for individuals, Type 2 for organizations)
- Primary practice address, phone number, and taxonomy codes
The search results can be downloaded or accessed through an application programming interface (API) for integration into different electronic health systems.
Understanding NPI Lookup Results
- NPI: A unique 10-digit identifier assigned to the provider during the NPI application process.
- Enumeration Date: The date the NPI was issued.
- NPI Type: Indicates whether the NPI is Type 1 (individual) or Type 2 (organization).
- Status: Shows if the NPI is active or deactivated.
- Address: Lists the primary and secondary addresses associated with the provider.
- Taxonomy: This code classifies the provider’s specialty or area of service. Providers can apply for additional taxonomy codes as their practice evolves. The state license number linked to the taxonomy is also displayed.
- Other Identifiers: This section links NPIs with Medicare, Medicaid, and other health insurance programs. It returns state codes and other critical data needed for accountability in claims processing.
- Endpoint Information: Shows where the provider can be contacted electronically, typically including a website link or secure email address. This field also highlights the provider’s integrated service endpoints for different electronic systems.
How Verisys Utilizes NPI Data:
Verisys leverages NPI data through its healthcare provider credentialing solutions to enhance fraud prevention and ensure data accuracy. By verifying provider information against the NPI registry, Verisys helps healthcare organizations access quality data essential for managing workforce development and compliance.
Tracking actions through standardized identifiers like NPIs enhances accountability and serves as a critical resource for detecting discrepancies in government and private healthcare systems. Verisys integrates NPI data with electronic health records, offering healthcare organizations comprehensive tools to improve quality reporting, reduce fraud risks, and streamline provider credentialing.
Contact Verisys to learn more about how NPI numbers support provider credentialing and prevent fraud.
