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One of the most common errors in medical billing and denied claims is an incorrect or missing NPI number. Insurance claims submitted to Medicare, Medicaid or any health plan are not paid without an accurate NPI.

An NPI number, known as a National Provider Identifier, is a unique identification number issued to each healthcare provider and organization in the United States. Meant to improve the efficiency of electronic health records, NPI’s were introduced in 1996 as part of the Health Insurance Portability and Accountability Act (HIPPA). NPI’s are used by the Center for Medicare and Medicaid Services (CMS) and all health care plans and health care clearinghouses to process payment claims and financial and administrative transactions.

Who Needs An NPI Number?

Any healthcare provider, healthcare clearinghouse or healthcare organization that conducts transactions or uses health records that fall under HIPPA regulations is required to obtain an NPI. This includes organizations and providers that use a medical billing company to process their claims. HIPPA requires that any individual, business or healthcare agency who transmits any patient health information in electronic form in connection with a transaction is required to have an NPI number. Once a provider receives their NPI it cannot be changed and remains with them regardless of their position or where they live or work.  

HIPAA-covered providers and organizations include:

  • Ambulance companies
  • Chiropractors
  • Clinical Social Workers
  • Clinical Therapists
  • Clinics
  • Dentists
  • Group Practices
  • Health care clearinghouses
  • Health care plans
  • Home health care agencies (HHA’s)
  • Hospitals
  • Licensed Therapists
  • Medical Equipment suppliers
  • Medical Laboratories
  • Nurses
  • Nursing homes
  • Opticians
  • Optometrists
  • Pharmacies
  • Pharmacists
  • Physical therapists
  • Physicians
  • Physician Assistants
  • Psychologists
  • Residential Treatment Centers

To find out who is and isn’t required to receive an NPI, see the CMS guidance here

How is an NPI number used?

An NPI number is a unique ID for each provider or entity and is required to be used by all healthcare plans for every administrative and financial transaction. Health plans used to assign their own ID numbers to each health care provider. The result was that every provider had to use a different ID depending on which health plan they were submitting claims to. The universal NPI number has made billing and tracking more efficient.

The NPI number is used with any electronic transaction identified in HIPPA. It may also be used by healthcare providers to identify themselves or other providers in healthcare transactions or related correspondence; by physicians on prescriptions; by health plans in their communications and transactions; to coordinate benefits with other health plans; to identify health care providers in electronic patient medical records; by the Department of Health and Human Services to track providers in fraud and abuse cases, and other functions.

How do you get an NPI number?

The fastest way for health care providers and organizations to get an NPI number is to apply through the National Plan and Provider Enumeration System (NPPES). The application should take about 20 minutes to complete and an NPI number may be received in as little as 10 days. Individual providers must first create a username and password through the Identity & Access Management System (I&A) and log in to NPPES using those credentials.

Providers can also apply for an NPI number through a paper form or through an organization on their behalf. Complete instructions are found on the CMS website here.

NPI numbers are critical for accurate medical billing and speeding revenue cycle management.  As an NPI is required by HIPAA regulations to track healthcare services and reimbursement, any claim submitted without a valid, registered NPI, will be rejected by any health plan.

Need advice on medical billing or making your RCM more efficient? Get in touch with Advantum Health for more info.