The National Provider System, which the Centers for Medicare and Medicaid Services (CMS) is directed to establish under HIPAA, creates a system for assigning unique health identifiers (NPIs) to all health care providers.  For those providers that obtain an NPI, the NPI will become the permanent identification number for the provider to use for all health plans.  This system is intended to simplify the current situation under which provider numbers are not standardized across governmental and commercial health plans.  Presently, it is not uncommon for health care providers to have different provider numbers for each health plan in which they participate, and in some cases have multiple provider numbers for the same health plan, based upon separate physical locations or departments of the same provider.  When fully effective, the NPI system will require that any health plan must use a provider’s NPI on all standard transactions where that provider's identifier is required, and health plans may not require a provider that has been assigned an NPI to obtain an additional identifier. 

Under the final NPI Rule, any health care provider may apply for and receive an NPI, and any health care provider that is also a covered entity under HIPAA (i.e., an entity or individual that performs electronic transactions subjecting such entity or individual to the HIPAA standards) must apply for and receive an NPI.  For complex health care entities such as hospitals or health systems, the NPI rules require that such an entity must obtain a separate NPI for any component that would qualify as a “covered health care provider” under HIPAA if such component were a separate legal entity.  For hospitals, these components might include separate outpatient departments, home health agencies, hospices, surgical centers, or laboratories. 

The compliance date for the NPI Rule is May 23, 2007 for health care providers.   CMS and some health care clearinghouses have suggested that covered providers apply for their NPIs sooner rather than later in order to prevent a last-minute rush and in order to ensure that NPIs are issued and tested prior to the deadline.  You may apply for an NPI number online at https://nppes.cms.hhs.gov/NPPES/Welcome.do.  NPIs should be issued within a few days of submission of the application.  In addition to applying for an NPI, health care providers should contact their software vendors to ensure that their system is equipped to generate bills with NPIs or, if necessary, to receive the appropriate software upgrades. 

Feel free to call us if you have questions about how to obtain an NPI or if you have questions about how the new NPI rules affect you, your practice or your health care facility.