National Provider Identifier - NPI

The final rule under HIPAA establishes the standard for a unique health identifier for health care providers.  The National Provider Identifier (NPI) is the new standard.  Any covered entities of HIPAA such as: Health plans, healthcare clearinghouses, and those who transmit healthcare information in electronic form must adhere to the new standard.

Why NPI?

Various health plans have always assigned providers of healthcare services and its suppliers identification numbers in order to administer its programs.  These identifiers were not standardized and left many providers with multiple and duplicate identifiers.  This greatly complicated the healthcare claims submissions process.  

The primary reason for the adoption of the NPI is to reduce costs and increase efficiency.  Healthcare providers will no longer have to use multiple numbers assigned by multiple health plans.  The end result should also help health plans process claims more quickly and efficiently. 

On of the most difficult tasks in processing claims has always been the selection of the correct provider number due to fact that providers can have so many identification numbers.

What is NPI?

NPI is a unique number given to each healthcare provider.  The NPI is a numeric 10 digit identifier, consisting of 9 numbers and a tenth check-digit in last position.  The NPI contains no information about the healthcare provider it identifies.  This number never expires. 

This number is assigned by a single entity.  All covered entities will now use only their NPI to identify themselves in all standard transactions.  Older legacy numbers such as: UPIN, Medicaid, Blue Cross and Blue Shield Numbers, etc will no longer be permitted.

The compliance date for large covered entities is May 23, 2007, small health plans do not need to comply until May 23, 2008.  Upon successful completion of the application healthcare providers will receive their NPI.  Any changes to a health care providers information (Address, phone number, etc.) must be supplied within 30 days.

What does this mean for Health plans who accept paper claims?

The processing of paper claims is very costly for most health plans.  Not accepting paper claims is not an option for fear of losing healthcare providers.  Many paper claims are submitted with the wrong provider selection causing these claims to pend in adjudication systems.  This makes outsourcing paper claims processing difficult.  If every provider has only one NPI to identify themselves by claims will auto adjudicate at much higher rates.

Outsourcing is extremely cost effective compared to using your own claims adjudicators to process paper claims.  Paper claims can be imported into your claims adjudication systems as EDI claims when transcribed and converted into HIPAA compliant ANSI 837 X12 transactions.  The limiting factor when processing paper claims has always been provider selection. 

Our paper claims processing services combined with the new NPI number will make outsourcing your paper claims a viable cost saving option.