It costs nothing to get a national provider identifier (NPI), but not having one by mid 2007 can be costly.

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) continues to cause change in the health care world. One of the many goals of HIPAA is to create national standards for electronic health care transactions that would encourage and simplify electronic commerce in the health care industry and reduce the administrative burdens on health care providers. One of these standards requires the implementation of the national provider identifier (NPI).

The NPI is a single provider identifier that would be accepted by all health care payors, eliminating the need for separate provider numbers. After May 23, 2007, the NPI must be used by covered entities that conduct electronic transactions.

The final NPI rule was adopted on January 23, 2004, and the implementation date is May 23, 2007. On that date, health plans including Medicare, Medicaid, and private insurers—which are HIPAA-covered entities—must accept and use the NPI in standard transactions. These standard transactions include claims, eligibility inquiries, claims status inquiries and responses, referrals, and remittance advice. As a result, health care providers who transmit health information electronically in connection with any of the standard transactions are required to obtain and use an NPI for all transactions after May 23.

The NPI consists of 10 digits and is an intelligence-free numeric identifier. Intelligence-free means that the numbers do not carry information about health care providers such as the state in which they practice, the provider type, or specialization. Once obtained, a provider’s NPI will not change and will remain with the provider regardless of job or location changes.

Issuance of an NPI does not indicate that a provider is licensed or credentialed. Nor does it prevent a supplier from having to go through the application process with payors. It does not enroll a supplier in a health plan or guarantee payment by the health plan. It will be necessary for suppliers to continue to comply with the National Supplier Clearinghouse (NSC) application process and related requirements to bill Medicare. The NPI process only eliminates the issuance of separate numbers from payors.

Any health care provider can apply for and receive an NPI. Subparts of a health care provider may require their own NPI numbers. A subpart is a component of a health care organization provider that provides health care but is not a legal entity. Subparts are often separately licensed and certified by the state. For example, in the case of a DME company with multiple locations, each location will be a separate subpart. In determining whether a separate NPI number is required for subparts, a supplier should ask the following questions:

1) Does the component furnish health care as defined by HIPAA?
2) Does the component conduct its own HIPAA transactions?
3) Do federal regulations require a unique identifier for billing purposes?
4) Is the component separately enrolled in a health care plan?
5) Does the component have its own health plan legacy identifier?

The short answer for suppliers is that if Medicare requires it to have a separate supplier number for the location, then it will be required to have a separate NPI number.

Obtaining an NPI number is easy. It can be applied for online at the National Plan and Provider Enumeration System (NPPES) Web site, www.nppes.cms.hhs.gov/nppes/welcome.do.

Health care providers can also complete a paper NPI application/update form and mail it to NPPES. The application asks for basic information such as organization name, address, and employer tax identification number. In addition, the application will ask for information on other provider identification numbers and licensure. The form is simple to complete.

Upon completion, an NPI number should be issued within 14 days. Once an NPI number is received, it should be treated as a confidential number and not disclosed indiscriminately.

In the event that the information reported changes, the health care provider must notify the NPPES of the change. The notification must be made within 30 days of any change. An update can be done using the online system or by printing off the application/update form and mailing it to the NPPES.

Effective October 2, 2006, Medicare providers can submit claims using an existing Medicare identifier and/or an NPI on claims. This means that an NPI can be used immediately. After May 23, 2007, providers must submit claims using the NPI number. Private health plans might begin requesting that providers begin using an NPI prior to May 23. Currently, the NSC requires an NPI to obtain or update information related to your supplier number.

Obtaining an NPI number is easy and will take only a few minutes. Additional information regarding the NPI can be found on CMS’ Web site at www.cms.hhs.gov/nationalprovidentstand Once a supplier begins using their NPI, it will make billing easier by eliminating the need for multiple provider numbers. Failure to obtain an NPI can be costly, particularly if a company’s billing is interrupted. Take steps now to obtain an NPI number.

This article is not intended to be legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general information purposes only.

Denise M. Fletcher, JD, is an attorney with the Health Care Group of Brown & Fortunato PC, an Amarillo, Tex-based law firm. She is Board Certified in Health Law by the Texas Board of Legal Specialization and represents DME companies, pharmacies, and other health care providers throughout the United States and Puerto Rico. Fletcher can be reached via e-mail: dfletcher@bf-law.com.