One of the most common errors in medical billing that cause denied claims is an incorrect or missing NPI number. We understand that within the acronym-heavy world of healthcare it can make it easy for new or busy members of the health team to forget exactly which acronym is which…and why each one matters.
In this article, you’ll quickly see that a missing or inaccurate NPI, a lack of adherence to patient privacy regulations, and other issues under federal laws can easily trigger a claim rejection, require a resubmission, cause payment delays, and even lead to financial penalties.
Designed to help improve the efficiency and accuracy of electronic health records, NPIs were introduced in 1996 as part of the Health Insurance Portability and Accountability Act (HIPAA). NPIs are used by the Center for Medicare & Medicaid Services (CMS) and all healthcare plans and clearinghouses to process payment claims and financial and administrative transactions as part of verifying a provider’s identity. NPIs were adopted as the standard unique identifier for healthcare providers in the NPI Final Rule issued Jan. 23, 2004.
The National Plan and Provider Enumeration System (NPPES) maintained by CMS assigns NPI(s) to requested healthcare providers and is the database that stores and manages all NPIs. Plans including Medicare, Medicaid and even private health plans require NPIs for not only their care providers but also within their administrative and financial transactions. Individual healthcare providers, such as physicians, nurse practitioners or sole providers, can only receive one NPI. However, larger organizations, such as hospitals, nursing homes and physician groups, can have multiple NPIs. That means getting the correct NPI within a claim can be complex and, like everything else, detail-oriented in submitting a clean claim and getting it paid.
An NPI number is a unique 10-digit code that’s used to identify medical professionals and healthcare providers. It’s used by patients and health insurance providers on Medicare, Medicaid and other insurance claims forms to identify those whoprovided the medical service.
Who Needs an NPI Number?
Any healthcare provider, healthcare clearinghouse or healthcare organization which conducts transactions or uses health records that fall under HIPAA regulations is required to obtain one or more NPIs. This includes organizations and providers that use a medical billing company transmitting any patient’s protected health information (PHI) in electronic form, which is required to have an NPI number. Once a provider receives a NPI, the number can’t be changed and remains with them regardless of their position or where they live or work.
HIPAA-covered providers and organizations, for example:
- Ambulance companies
- Ambulatory service centers and clinics (surgical and otherwise)
- Chiropractors
- Clinical social workers
- Clinical therapists
- Dentists
- Dietitians
- Group practices
- Healthcare clearinghouses
- Healthcare plans
- Heath systems
- Home health care agencies (HHAs)
- Hospitals
- Licensed therapists
- Medical equipment (DME) suppliers
- Medical laboratories
- Midwives
- Nurses
- Nurse practitioners
- Nursing assistants
- Nursing homes
- Opticians
- Optometrists
- Pharmacies
- Pharmacists
- Physical and occupational therapists
- Physicians (MDs or DOs, including specialists such as radiologists, pathologists, ophthalmologists, psychologists and many others)
- Physician assistants
- Residential treatment centers
To find out who is and isn’t required to receive an NPI, see CMS guidance here.
What Happens When PHI Is Improperly Shared?
Just to briefly note the larger and more broad consequences of NPI and PHI, HIPAA’s Privacy and Security Rules help ensure the identity of providers and the confidentiality of health information to prevent the misuse of health information to commit identity theft and insurance fraud. Should a breach of confidentiality occur, HIPAA requires patients and plan members to be notified of the breach in order to protect themselves against theft or fraud.
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. A universal NPI number for each provider, regardless of where they are delivering service(s), has made billing and tracking more efficient.
The NPI number is used with any electronic transaction identified in HIPAA. 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 U.S. Department of Health and Human Services (DHS) to track providers in fraud and abuse cases, and other functions.
How Do I Get an NPI Number?
The fastest way for providers and organizations to get an NPI number is to apply through NPPES. The application should take about 20 minutes to complete and an NPI number may be received in an average of 15 to 20 days. (Paper applications can take longer.) Individual providers must first create a username and password through an Identity & Access Management System (I&A) and log in to NPPES using those credentials.
The HIPAA Security Rule doesn’t stipulate specific authentication solutions that should be used for identity and access management; instead, the measures should be informed by the entity’s risk analysis and should sufficiently reduce risks to the confidentiality, integrity and availability of ePHI. The HHS’ Office for Civil Rights drew attention to authentication in its June 2023 Cybersecurity Newsletter and pointed out that authentication measures should reflect the level of risk.
With hacking and IT incidents continually on the rise (see chart from HHS), identity and access management is a critical component of the ongoing commitment to prevent fraud and its cost within healthcare delivery.
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 Critical to Speeding RCM Process and Optimal Financials
While it can be a somewhat complex process to creating a username and password through an Identity & Access Management System (I&A) and logging in to NPPES to file to receive an NPI number, it’s really simple once working with revenue cycle management experts such as those in the Advantum Health team. An effective NPI process and its use are obviously critical for accurate and timely submission of clean claims that avoid delayed and expensive billing resubmissions.
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Let us help you receive and properly use validated, registered NPIs throughout your provider organization to optimize the billing experience and its best-possible outcomes. Need advice helping make your RCM more efficient? Get in touch with us for more info and to help.