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Get ready for National Provider Identifiers

November 1, 2006
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As May 2007 approaches, all provider claims and eligibility systems must be upgraded to use the Health Insurance Portability and Accountability Act of 1996 (HIPAA)-required National Provider Identifier (NPI) as their sole and unique identification method for all HIPAA standard electronic transactions. In short, by May 23, 2007, all providers must obtain an NPI and use it for all claims submitted.

It is impossible to overstate the importance of meeting this deadline—claims to Medicare and other health plans may be rejected if they're submitted without the NPI. The need for an NPI also includes eligibility queries. All providers must have their unique NPI even if they use a clearinghouse to prepare and submit transactions. CMS recommends getting your NPI at least six months before the required date so that you can test the use of it with your software and share it with appropriate business partners and entities. The time to act is now. Here are answers to some frequently asked questions:

Why do we need an NPI?

HIPAA required the Secretary of Health and Human Services to adopt a standard unique identifier for healthcare providers to use for all standard electronic transactions. The NPI was adopted by the Final Rule published on January 23, 2004. All standard transactions must use only the NPI by May 23, 2007 (although legacy identifiers—e.g., Medicare provider numbers, PINs, and UPINs—can be used in addition to the NPI to help build crosswalks for health plans and Medicare/Medicaid). Claims without valid NPIs may be rejected.

Who needs an NPI?

HIPAA requires all providers submitting electronic transactions to obtain and use an NPI. All Medicare-enrolled providers must obtain an NPI. CMS and its contractor can assist entities in analyzing their need for an NPI, but are prohibited from making decisions for or about the organization. So if you need to submit claims electronically, check eligibility electronically, or are a Medicare provider, your provider organization must obtain an NPI.

Important further note: There is considerable business flexibility in the NPI Final Rule permitting complex organizations to obtain NPIs for their subparts. Decisions such as these should be considered by administrators in consultation with legal counsel and accountants.

Physicians and other Medicare providers who are assigned PINs or UPINs will need to obtain an NPI by the May deadline. After that date, UPINs may not be used to identify providers for Medicare claims.

Are there any advantages to using the NPI (other than getting paid!)?

Yes. All payers must accept the NPI as the unique provider identifier (although small plans have an additional year to comply.) Providers will no longer need to have unique identification codes for each health plan. The NPI will be unique, and will not change (unless you request it be deactivated or it is used in fraudulent transactions.) This will simplify submitting claims and checking eligibility.

How do we get an NPI?

The easiest way is to fill out an online application at If you prefer paper, an application can be requested from the same Web site, or by calling (800) 465-3203. CMS expects it to take up to 10 days to receive your NPI. The online application takes about 20 minutes. There is no cost, and in most cases the process is simple enough to follow without the help of outside vendors or consultants.

What will we do to incorporate the NPI?

You will need to ensure that it is being used in your billing and any other software for HIPAA standard transactions. Software vendors should provide instructions for adding the NPI to their systems and testing the transactions to ensure compliance with the standards.

In addition, you will need NPIs for all business associates for whom you prepare standard transactions. Of course, you must share your NPI with business associates, such as health plans, fiscal intermediaries, and Medicaid offices. As mentioned, your legacy (previously used identifications) may be used in addition to the NPI to help health plans develop crosswalks from your old identifiers to the NPI.

Anytime you must identify a provider as an ordering or referring provider, you must have their NPI. You should start to collect the NPIs of your business or clinical associates immediately.

NPIs should be safeguarded and not broadcast indiscriminately to avoid fraudulent use. Rules for safe dissemination are being developed by CMS and will be published soon.

What forms will we use to submit claims using the NPI?

The NPI cannot be used with the UB-92 or the current 1500 claims forms. The current 1500 is being replaced with a revised version that has been modified to accept the NPI in Box 33a. The provider's legacy number will go into Box 33b. The UB92 is being replaced with the UB-04 designed for using the NPI. Standard electronic transactions such as the 837-I Claim are also designed to use the NPI. It would be wise to get assurances from your software vendors that they are aware of the NPI requirements and have a tested and accepted solution for you.

What systems preparation should we be doing?

That depends on your business and system configuration. If you use a clearinghouse for submitting claims, it would be prudent to start a dialogue now to ensure that it has the information needed for continuing to support your needs. If you depend on a software vendor for your billing software, start a dialogue to satisfy yourself that it understands the billing and NPI issues, has completed development and testing, and is ready to implement on your system. Remember, in the eyes of CMS, the provider is responsible, not the vendor!