What is a National Provider Identifier (NPI Number)?

Jun 2, 2021 | Credentialing, Fraud / Waste / Abuse, Verification

All Blogs

What is an NPI Number?

The NPI (National Provider Identifier) Number is a 10-digit numerical identifier that identifies an individual provider or a healthcare entity. An NPI number is shared with other providers, employers, health plans, and payers for billing purposes. CMS.gov’s Administrative Simplification provisions of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) mandated the adoption of a standard, unique health identifier for each healthcare provider. The NPI fulfills this provision. Currently, all covered healthcare providers, all health plans, and healthcare clearinghouses must use NPI numbers in the administrative and financial transactions adopted under HIPAA.

What are NPI Numbers Used For?

Prior to the NPI, health plans (federal programs such as Medicare, State Medicaid programs, or private health plans) assigned identification numbers to healthcare providers and suppliers. The identification numbers were not standardized, resulting in a single provider using multiple identification numbers issued by the various health plans with which a provider was enrolled. This complicated the provider’s claim submission processes often resulting in the same identification number being assigned to different healthcare providers by the different health plans.

The NPI Final Rule established a standard for a unique health identifier for healthcare providers to use in the healthcare system. The national standard simplifies the processes and reduces the administrative burdens on healthcare providers.

Providers are required to use their NPI Number when transmitting any health information in electronic form in connection with a transaction. As stated in the NPI Final Rule, “The use of the NPI will improve the Medicare and Medicaid programs, and other Federal health programs and private health programs, and the effectiveness and efficiency of the healthcare industry in general, by simplifying the administration of the healthcare system and enabling the efficient electric transmission of certain health information.”

NPI Helps Prevent Healthcare Fraud 

In addition to maximizing efficiency and standardizing provider identifiers, The National Provider Identifier (NPI) is a key to preventing fraud in Medicare. The NPI allows the verification of the credentials of a provider who is treating or prescribing and ordering equipment and supplies. This additional verification ensures providers’ credentials are current and valid. Having NPI numbers is expected to save taxpayers an estimated $1.6 billion over a period of 10 years.

Which Providers Use an NPI?

All individuals and organizations that meet the definition of healthcare provider as described at 45 CFR 160.103 are eligible to obtain a National Provider Identifier (NPI). These include health plans, health plan clearinghouses, healthcare providers who transmit health information electronically, and healthcare organizations that transmit protected health information to covered entities who require access to the protected health information. Whether you are a HIPAA covered provider, a healthcare provider, or supplier who bills federally funded programs for your services, you must have an NPI. Providers need an NPI Number prior to enrolling with Medicare.

There are two types of NPI Number assignments: Type 1 NPI providers and Type 2 NPI providers. Type 1 NPI includes individuals such as sole proprietors, dentists, physicians, and surgeons. A provider is eligible for a single NPI. Type 2 NPI are organizations and may include acute care facilities, health systems, hospitals, physician groups, assisted living facilities, and healthcare providers who are incorporated.

The assignment of an NPI Number is not required for a provider to practice medicine. A healthcare provider who is not covered by HIPAA, has opted out of Medicare/Medicaid, and/or takes absolutely no third-party payments does not need an NPI.

When Did NPI Numbers Begin?

In July 1993, the Centers for Medicare & Medicaid Services (CMS) undertook a project to develop a healthcare provider identification system to meet the needs of the Medicare and Medicaid programs and the needs of a national identification system for all providers. The NPI Final Rule, published on January 23, 2004, established the National Provider Identifier (NPI) as this standard.

National Provider Identifier (NPI) Replaced the Unique Physician Identification Number (UPIN)

When the UPIN (Unique Physician Identification Number) was established as an alternative identifier to the SSN, UPINs were assigned to physicians and some other practitioners. However, the UPIN Registry was discontinued in 2007. CMS then replaced UPIN with NPI as the preferred provider identification number for increased accuracy and consistent formatting.

HIPAA Rules for NPI

According to CMS, all HIPAA administrative and financial transactions must use NPIs. “Covered healthcare providers and all health plans and healthcare clearinghouses must use the NPIs in the administrative and financial transactions adopted under HIPAA.

As outlined in the Federal Regulation, The Health Insurance Portability and Accountability Act of 1996 (HIPAA), covered providers must also share their NPI with other providers, health plans, clearinghouses, and any entity that may need it for billing purposes”.

How to Apply for an NPI

NPPES is the National Plan and Provider Enumeration System. If an individual or organization needs an NPI, they must submit an application to NPPES. Fox Systems, Inc., acts as the Enumerator contracted to act as support for NPIs. Fox Systems processes provider applications, assigns NPI Numbers, resolves application issues, and answers questions about obtaining NPIs.

Does a Provider’s NPI Change?

Once an NPI is assigned, a provider’s NPI will not change. The NPI remains with the provider regardless of a job or location change.

Does the NPI Replace the Tax Identification Number (TIM) or Other Identifying Numbers?

The NPI does not replace numbers used for other identification purposes, including a provider’s taxpayer identification number, DEA, state license, or social security number.

It does, however, replace all previous identification numbers that providers used for healthcare information transactions, claims, and billing. Health plans may continue to use other provider identification numbers other than the NPI internally, but the NPI must be used for HIPAA transactions. 

How to Look Up an NPI 

There are many ways to perform an NPI lookup for a provider or an organization. The official NPI lookup website is the NPPES NPI Registry. This is a free service to anyone. You can start with the NPI number or with a name. The search result includes the NPI number, the first and last name of the provider, the NPI type indicated with icons, primary practice address, phone, and primary taxonomy. The results are shown in the search result window and can be downloaded, or, even more streamlined and efficient, through an application programming interface (API).

Understanding NPI Lookup Results: 

  • NPI: As explained above, the NPI is a unique, 10-digit National Provider Identifier (NPI) assigned to the provider.
  • Enumeration Date: The enumeration date refers to the date the NPI was assigned.
  • NPI Type: There are two types of NPI numbers. Type 1 NPIs are assigned to individual providers. Type 2 NPIs are assigned to Organizational Providers.
  • Status: Identifies if the NPI is Active or Deactivated.
  • Address: Refers to the address associated with the NPI. It may include a mailing address, a primary address, and/or a secondary address.
  • Taxonomy: Taxonomy Codes categorize the type, classification, and/or specialization of health care providers. Providers can select more than one taxonomy code, but one of them must be designated as the primary taxonomy. In addition to the primary and selected taxonomies, the NPPES search will also return the state code and license number associated with the taxonomy.
  • Other Identifiers: This field matches NPIs with insurers such as Medicare and Medicaid or other insurers to help insurers recognize the provider. This field also returns number and state codes.
  • Endpoint Information: This field shows where the client can access service, usually a direct address and/or a URL. It can also include endpoint description, use, content type, and affiliation.

Tracking actions to a standardized identifier provides transparency that can impede and identify fraud. Verisys uses the NPI as one of many data points when verifying provider identity for its clients who use Verisys’ data engines for the provider credentialing process. The NPI number is a unique identifier, but doesn’t imply that the provider is properly licensed, hasn’t been excluded or sanctioned. A full data profile that is current, historical, and accesses thousands of primary sources of relevant data such as professional licensing boards, controlled substance license verification, the OIG LEIE, OFAC, Social Security Death Master File, abuse and sex offender registries, FACIS® among other critical data sources, show the true nature of a provider. This is the key to ensuring quality care, quality outcomes, patient safety, and fraud prevention.

To read more about NPIs and Fraud Prevention click here.

Free Data Insights White Paper

In today’s world, the competitive advantage comes from going above and beyond the minimum requirements of regulatory requirements.

Download Verisys’ free white paper to help you understand how data protects patients, your organization, and the health care industry.

Juliette Willard Written by Juliette Willard
Healthcare Communications Specialist
Connect with Juliette on LinkedIn