What are NPI Numbers and Why Are They Important?
What is an NPI Number?
The NPI (National Provider Identifier) Number is a 10-digit numerical identifier used to identify an individual provider or a health care entity. An NPI number is shared with other providers, employers, health plans, and payers. 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 health care provider, and the NPI fulfills this provision. Covered health care providers, all health plans, and health care clearinghouses must use NPI numbers in the administrative and financial transactions adopted under HIPAA.
When did NPIs go into Effect?
In July 1993, the Centers for Medicare & Medicaid Services (CMS) undertook a project to develop a health care provider identification system to meet the needs of the Medicare and Medicaid programs and, ultimately, the needs of a national identification system for all health care providers. The NPI Final Rule, published on January 23, 2004, established the National Provider Identifier (NPI) as this standard.
What is the Purpose of an NPI?
CMS is taking steps to improve the electronic transactions in health care with the NPI. Having a national standard for electronic health care transactions simplifies the processes and reduces the administrative burdens on health care providers.
Prior to the NPI, a health plan (Federal programs such as Medicare, State Medicaid programs, or private health plans) assigned identification numbers to health care providers and suppliers. The identification numbers were not standardized, resulting in a single provider having multiple identification numbers issued by the various health plans with which a provider was enrolled. This complicated the provider’s claim submission processes and often resulted in the same identification number being assigned to different health care providers by the different health plans.
The NPI Final Rule established a standard for a unique health identifier for health care providers to use in the health care system. 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 health care industry in general, by simplifying the administration of the health care system and enabling the efficient electric transmission of certain health information.”
Who Gets an NPI?
All individuals and organizations that meet the definition of health care provider as described at 45 CFR 160.103 are eligible to obtain a National Provider Identifier (NPI). These include health plans, health plan clearinghouses, health care providers who transmit health information electronically, and health care organizations that transmit protected health information to covered entities who require access to the protected health information. If you are a HIPAA covered provider or if you are a health care 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, 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 health care providers who are incorporated.
The assignment of an NPI Number is not required for a provider to practice medicine. A health care provider who is HIPAA non-covered, has opted out of Medicare/Medicaid, and/or takes absolutely no third-party payments does not need an NPI.
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What is NPPES?
NPPES is the National Plan and Provider Enumeration System which is where an individual or organization must submit an application in order to obtain their NPI. The Department of Health and Human Services selected Fox Systems, Inc., as the Enumerator. It will process provider applications, assign NPI Numbers, resolve issues related to applications, and answer questions about obtaining NPIs.
Does the NPI Replace the Tax Identification Number (TIM) or Other Identifying Numbers?
The NPI does not replace a provider’s taxpayer identification number, DEA, state license, or social security number because these numbers are used for other identification purposes.
The NPI replaces all previous identification numbers (legacy numbers) that providers were using for health care information transactions, claims, and billing. However, health care provider identification numbers other than the NPI may continue to be used in the internal processes and files of health plans or health care clearinghouses if they wish to continue to use those identification numbers only in those internal processes and files.
Will a Provider’s NPI Ever Change?
Once enumerated, a provider’s NPI will not change. The NPI remains with the provider regardless of a job change or a change in location.
Using the NPI as a Key to Health Care Fraud Prevention
The National Provider Identifier (NPI) is a key to preventing fraud in Medicare put in place by the Centers for Medicare and Medicaid (CMS) Final Rule on Fraud Prevention. It is designed to ensure quality care because it allows the verification of credentials of a provider who is treating or prescribing and ordering equipment and supplies. It is expected to save taxpayers an estimated $1.6 billion over a period of 10 years.
There are many ways to look up a provider or an organization by an NPI number. The official web look-up is the NPPES NPI Registry. The search can originate 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. This free search is available to anyone. The results are shown in the search result window, can be downloaded, or even more streamlined and efficient, through an application programming interface (API). There are other companies that offer free NPI lookup that are advertising supported.
Tracking actions to a standardized identifier provides the level of transparency that impedes and identifies 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 the quality of care with quality outcomes, patient safety, and fraud prevention.
To read more about NPIs and Fraud Prevention click here.
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|Written by Juliette Willard
Healthcare Communications Specialist
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