What Is an NPI number and What Is It Used For?

The comprehensive guide below will tell you everything you need to know about the National Identity Provider number, including its purpose, who gets an NPI number, how to get it, and a lot more!

Are you a healthcare provider or a provider organization working in the United States? Then you must know that an inaccurate or missing NPI number is one of the most prevalent reasons for medical billing errors and refused claims. Without a proper NPI, insurance claims submitted to Medicare, Medicaid, or any other health plan will not be reimbursed.

A National Provider Identifier (NPI) number is a unique identifying number assigned to each healthcare provider and organization in the United States. As part of the Health Insurance Portability and Accountability Act (HIPAA), NPI was introduced in 1966, meant to enhance the efficiency of electronic health records. Now, every healthcare plan and organization, including the Center for Medicare and Medicaid Services (CMS), uses its NPI to manage administrative and financial transactions and process medical payments and claims.

What is an NPI number?

The National Provider Identifier (NPI) number is an administrative simplification standard used by the Health Insurance Portability and Accountability Act (HIPAA). It is a unique identification number issued to covered healthcare providers. It is an obligation for all the covered healthcare providers and clearinghouses to use NPIs for all the financial and administrative transactions incorporated under HIPAA. NPI number is a 10-digit numeric identifier that is absolutely intelligence-free. The intelligence-free number means that NPIs do not carry any other personal information about healthcare providers, such as their medical specialty or the state they live in. In HIPAA standards transactions, the NPI must be used instead of traditional provider identification.

Federal Regulation, The Health Insurance Portability and Accountability Act of 1996 (HIPAA), outlines that every covered healthcare provider must share their NPI with other healthcare providers, clearinghouses, health plans, or any other entity who needs the NPI for billing purposes. The CMS (Centres for Medicare & Medicaid Services) has created an online portal where any healthcare organization, healthcare provider, or physician can access the NPI information. This forum is a part of the National Plan and Provider Enumeration System (NPPES) website NPI registry(nppes.cms.hhs.gov). The information about healthcare providers shared on this forum covers only the data which is exposable under the Freedom of Information Act (FOIA).

What is the purpose of an NPI number?

The purpose of the final rule of National Provider Identifier was to standardize the identification numbers and establish unique NPIs for healthcare providers in order to smooth the healthcare system. Implementation of this rule not only simplified the administrative process but also reduced the burden on healthcare providers.

The final rule requires the providers to use the NPI number while communicating any healthcare information associated with a healthcare transaction. The rule states. “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 prevents healthcare frauds

NPI not only incorporates efficiency in the standardized administrative process but also helps Medicare and Medicaid to prevent healthcare fraud. The NPI reveals the identity of the individual healthcare provider who is prescribing any medicines and treatments or ordering the drugs, supplies, and equipment. The additional verification of NPI supports the clarity in the process. NPI also keeps a check on the validity of the credentials of the individual healthcare providers. Research states that using NPI has saved the taxpayers approximately $1.6 billion in the last decade.

Who needs an NPI number?

All the individual healthcare providers, healthcare organizations, and healthcare clearinghouses working under the regulation of HIPAA must acquire an NPI number. Particularly the organizations and healthcare providers that use a medical insurance company to process their billing claims. Any healthcare organization, business, or individual service provider who electronically connects with patients and executes transactions must also have an NPI by HIPPA. Whether you are a covered provider working under HIPAA, a supplier who bills on funded programs offered by the federal government, or a healthcare provider, you must have an NPI. Enrollment with Medicare also requires the healthcare providers to have an NPI before applying.

Other than individual healthcare providers, healthcare organizations, and healthcare clearinghouses, even the dentists who are NOT working as HIPAA-covered entities may be required to use an NPI. Most dental plans demand a dentist to include their NPI numbers while making a paper claim. Medicare part D also requires the non-covered dentists to use their type-1 NPI on the prescriptions, particularly in the case of Medicare part D beneficiaries.

Moreover, an insurance plan for a pharmacy may also ask the pharmacist for the prescribing provider’s NPI number on the drug prescription. A medical specialist may also ask the patients to get a referral from a doctor with a type-1 NPI to fulfill the claim.

Who uses an NPI?

Here is a detailed list of HIPAA-covered organizations and providers who must use an NPI number.

  • Ambulance companies
  • Chiropractors
  • Clinical Social Workers
  • Clinical Therapists
  • Clinics
  • Dentists
  • Group Practices
  • Health care clearinghouses
  • Health care plans
  • Home health care agencies (HHA’s)
  • Hospitals
  • Licensed Therapists
  • Medical Equipment suppliers
  • Medical Laboratories
  • Nurses
  • Nursing homes
  • Opticians
  • Optometrists
  • Pharmacies
  • Pharmacists
  • Physical therapists
  • Physicians
  • Physician Assistants
  • Psychologists
  • Residential Treatment Centers

How to get an NPI?

After knowing what an NPI is and whether or not you need one, the only thing to wonder remains: How to get an NPI?

The National Plan and Provider Enumeration System (NPPES) has made the process of getting an NPI very easy to understand and follow. If you are an individual healthcare provider or a healthcare provider organization, all you have to do is visit the website of NPPES and apply for your NPI number. To support the NPIs, NPPES is in contract with Fox Systems, Inc. working as an enumerator.  Fox systems, Inc. manages the processing of any provider’s NPI application, resolves issues related to NPI application, answers the frequently asked questions about NPI, and assigns the NPI numbers.

Applying for an NPI number is a simple 20 – 30 minutes procedure that will save the providers many future troubles and time. CMS has authorized the NPPES to cater to all the matters related to the NPI application process. The application process is totally free of cost.

Once the NPPES confirms your application data, you will receive your NPI number from Customerservice@NPIEnumerator.com. You must regularly check your emails because the email might go directly to your spam folder if you have spam filters active. There is no fixed time when you will receive your NPI after submitting the application, but it usually arrives within ten business days of applying on the electronic forum.

How do I find my NPI number?

An NPI lookup for any individual healthcare providers or provider organizations can be done in several ways. The official website for NPI lookup is NPPES NPI Registry (https://npiregistry.cms.hhs.gov/). NPPES does not charge anything for looking up anyone’s NPI number.

What is the application cost of an NPI number?

The National Plan and Provider Enumeration System do not charge you anything for applying for an NPI number. The process is simple, absolutely free of cost, and can be done electronically by visiting the official website of the National Plan and Provider Enumeration System.

Will my NPI number change?

An NPI number does not change under any circumstances. It is merely a 10-digit number that does not carry any electronic information about personal details like office locations, cities, etc. It does not have to change even if the provider relocates or changes other personal information.

HIPAA rules for NPI

HIPAA has made basic rules for all the covered healthcare providers, clearinghouses, and healthcare plans listed below.

According to CMS, it is mandatory for all covered healthcare providers, clearinghouses, and healthcare plans to use NPIs to perform all the HIPPA financial and administrative transactions.
According to the Federal Regulation, HIPAA, it is obligatory for the covered healthcare providers to share their NPIs with other healthcare providers, organizations, health plans, and clearinghouses.

Can NPI replace TIM (Tax Identification Number)?

A general question that comes to every health provider’s mind is if their NPI can replace their TIM (Tax Identification Number) or other identification numbers they already have. The answer is no. The National Providers Identifier does not replace any other numbers used for any other identifications. They do not replace the taxpayers’ identification numbers, social license numbers, social security numbers, or DAE numbers. All these numbers have their own standings and purposes of fulfillment.

Conclusion

For making medical billing convenient and hassle-free, NPI numbers are of significant importance. They are also very helpful in increasing the efficiency of revenue cycle management. It is a mandatory requirement by HIPPA for all the healthcare providers, provider organizations, and clearinghouses to have an NPI number for the regulation and accurate tracking of healthcare services and reimbursement. Therefore, any insurance claim which does not contain a registered and valid NPI number will not be accepted by any health plan.

If you don’t have your National Provider Identifier yet, visit  http://nppes.cms.hhs.gov/ or call customer service at 800.465.3203 and get one NOW!

You can also track your NPI application process by emailing customerservice@NPIEnumerator.com.

John Otero

John Otero

John Otero is an industry practitioner with more than 15 years of experience in the insurance industry. He has held various senior management roles both in the insurance companies and insurance brokers during this span of time. He began his insurance career in 2004 as an office assistant at an agency in her hometown of Duluth, MN. He got licensed as a producer while working at that agency and progressed to serve as an office manager. Working in the agency is how he fell in love with the industry. He saw firsthand the good that insurance consumers experienced by having the proper protection. John has diverse experience in corporate & consumer insurance services, across a range of vocations. His specialties include Major Corporate risk management and insurance programs, and Financial Lines He has been instrumental in making his firm as one of the leading organizations in the country in generating sustainable rapid growth of the company while maintaining service excellence to clients.