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The National Provider Identifier

The next major phase of the HIPAA implementation process – the National Provider Identifier (NPI) – is suddenly upon us.  While many of your customers were less than rigorous in HIPAA Security compliance, the proper implementation of the NPI will be essential for their cash flow.

Last week your most of your clients received letters from CMS offering details of the process.  You can get the letter at http://www.cms.hhs.gov/hipaa/hipaa2.  Also on this site is a new “viewlet” which explains many of the details surrounding this new process.

After a phase in period, the NPI will replace the payer-assigned identification numbers used in electronic transactions.  Most health plans, Medicare, Medicaid, and all clearinghouses must use and accept the NPIs by May 23, 2007.  Small health plans have an additional year.

Providers need to apply to the federal government for their NPI.  The easiest method is via a national web site, https://nppes.cms.hhs.gov, which is operated by a CMS contractor, Fox Systems, Inc., who will be called CMS’ Enumerator.  The NPI is a 10 digit number.  Providers are encouraged to get their numbers as soon as possible. 

There is quite a bit more to this entire process than might immediately be obvious.  For starters, providers may receive either an individual number or an organizational number.  And organizations may have “subparts” (for example, for a separate location) which may receive a separate NPI.  So a healthcare organization may still need to keep track of multiple identifiers.

Payers will be required to update and adjust their systems to accommodate the new NPI.  Because of the new HIPAA regulations payers will need to adjust their business practices of credentialing, certifying, and otherwise approving healthcare organizations to utilize the NPI.

Your software and electronic billing will need to accommodate the payers’ updated business practices and supply the right NPI for the claim.  For example, this might be an organizational NPI for one claim and an individual provider’s NPI for another claim.  While some software authors have already included a data field for the NPI in their billing software which populates the ANSI 837 electronic claim, they may or may not have thought through all of the functionality needed to handle the billing needs of larger practices who will be using numerous NPIs.  So software upgrades may be necessary.  May 23, 2007 will be here before you know it.

In future columns, we will continue to explore the numerous issues which surround this significant change in healthcare reimbursement.

Gary Pritts is not affiliated with InvestMed; he is a healthcare, business and information systems consultant with 25 years of experience.  To contact Gary with questions about this article or HIPAA in general, visit his website at:  www.eagleconsultingpartners.com