Are you a healthcare provider in the US? You must have an NPI number. It stands for National Provider Identifier, and every healthcare provider, whether they have their own practice or work in a group setting, is given a unique 10-digit NPI number.
What Is NPI in Healthcare?
The National Provider Identifier, commonly known as NPI, is a 10-digit code that helps identify and separate healthcare providers in electronic transactions. The 1996 Health Insurance Portability and Accountability Act mandates the adoption of this identifier as a standard in America’s healthcare industry.
An NPI helps providers communicate and process health information. All NPIs assigned to healthcare providers are permanent and cannot be changed after some time. Doctors and physicians must have this number. However, nurses are not mandated to have it. Still, having or applying for it can be a smart move based on the fluctuating and fast-moving healthcare landscape.
Who Assigns NPIs to Healthcare Providers?
NPPES, The National Plan and Provider Enumeration System, assigns NPIs to healthcare providers. Managed by the Center for Medicare and Medicaid Services, NPPES serves as the database for storing and managing all NPIs.
The reason why NPIs are significant for medical professionals is that Medicare, Medicaid and private insurance plans ask for NPIs in their financial and administrative matters.
Types of NPIs
There are two types of National Identifier Numbers assigned to the healthcare specialists.
Entity Type 1: For individual healthcare providers
Entity Type 2: For organization or group healthcare providers
There is a simple difference between the two types, i.e., who they are for. Let’s discuss these types in detail to make it easy for you.
What is NPI type 1?
The first type of NPI is a unique 10-digit number only for individual medical professionals. Doctors, dentists, physicians, and therapists are the ones who qualify for type 1. Moreover, any qualified healthcare provider having the ability to deliver healthcare services to patients is eligible for NPI type 1.
Who Needs It?
Individual practitioners who send claims to insurance companies under their own name and not under a group, hospital, or organization name.
Some individuals who require an NPI
- Physical Therapists
- Occupational Therapists
- Speech-Language Pathologists
- Physicians
- Audiologists
- Psychologists
- Dentists
- Nurses
- Pharmacists
- Chiropractors
It’s Permanent
An NPI assigned to individual healthcare providers is permanent and cannot be changed over time. So, if you continue to work solo or join an organization, it will stay as your identifier.
One NPI per Person
Every solo practitioner will be assigned one Type 1 NPI number. After getting it, it cannot be changed even if they decide to join an organization, change location, or work in another role.
Simply put, Type 1 NPI is for solo medical professionals and acts as their identifier in the vast billing system. It serves to ensure your services are reimbursed and recognized correctly by Government and private payors alike.
What is NPI Type 2?
Same as NPI type 1, it is also a 10-digit number. However, it is assigned to organizations, hospitals, nursing homes, and groups of practices or clinics. Simply put, any healthcare organization, group, or chain of clinics that bill insurance as a group is assigned an NPI type 2 number.
Who Is It Specified for?
Unlike solo providers, NPI type 2 is for all those organizations, groups, multi-specialty chains of practices, or companies that bill the insurance companies under the organization name.
Organizations That Must Have an NPI
- Outpatient Clinics
- Group Practices
- Health Maintenance Organizations (HMOs)
- Home Health Agencies
- Hospitals
- Laboratories
- Residential Treatment Centers
- Durable Medical Equipment (DME) suppliers
Multiple Locations
Here’s a thing you need to keep in mind. In case an organization has multiple locations, they may require a Type 2 NPI for every location, based on how they have set up their billing system.
Type 2 Identifiers are not for solo individuals and are specifically assigned to organizations like chains or clinics, groups of practices, etc. Both NPI types may even work together. For instance, the solo medical practitioners will use NPI Type 1 for individual identification, while the organization will use NPI Type 2 for billing claims.
NPI Type 1 vs. NPI Type 2
| Aspect | NPI Type 1 | NPI Type 2 |
| Who It’s For | Individual healthcare providers (e.g., doctors, dentists) | Organizations (e.g., clinics, hospitals, group practices) |
| Ownership | Assigned to a single individual | Assigned to a business or organization |
| Usage | Used for personal billing and individual services | Used for billing under the organization’s name |
| Examples | Physicians, therapists, nurses | Hospitals, group practices, nursing homes |
NPI Does Not Ensure the Following
Having a Type 1 or Type 2 National Identification Number does not guarantee an individual or organization is licensed or credentialed. It does not ensure payment reimbursement by a health plan, nor does it promise to enroll a healthcare provider in a health plan.
Who Should Have an NPI Number?
Based on NPI standards, medical professionals are considered covered entities, and hence, they should get an NPI if they want to:
- Submit electronic claims
- Use a clearing house’s services
- Send electronic claim attachments
- Confirm eligibility verification
- Check claim statuses online
Why do Healthcare Providers Need an NPI?
Whether you’re a healthcare practitioner or a practice owner, you must have an NPI number as it is mandated by the law to identify yourself and the services provided. This 10-digit identifier helps you a lot in many ways, like it gives you a unique identification, location, flexibility, and helps you save costs.
- An identifier helps streamline transactions across various insurances.
- You won’t require a new NPI, even if you change your location or specialty.
- Having an NPI sets you up for lowered administrative costs by simplifying transactions.
Is an NPI Necessary Even If You Don’t Bill Insurance?
Having an NPI number of your own is extremely beneficial, even if you don’t bill insurance. Why is that so? An NPI number helps you comply with strict healthcare regulations. It also helps in streamlining certain processes. Let’s discuss the reasons why you require an NPI and how it will benefit you.
Participation in HIPAA Transactions
When you don’t bill insurance but are involved in HIPAA-compliant transactions like referrals, sending patient records, or partnering with clearinghouses, you require an NPI.
Credentialing and Enrollment
An NPI number is mandatory when it comes to credentialing and enrollment. Most healthcare networks, Medicare and Medicaid, and private insurers demand an NPI for processes like credentialing, even if you don’t bill them.
State licensing
In certain states, having an NPI number is compulsory for getting a license or to fulfill the registration process.
When You Don’t Require an NPI Number?
If, as a healthcare provider, you don’t bill the insurance and deal in cash-based services, you don’t need an NPI. An NPI is not mandatory if you aren’t into things like referrals, collaborations, etc.
However, not having an NPI number comes with various limitations. Having one allows you to refer patients to other specialists or serve patients referred to you by others. Another reason to obtain an NPI number is if you plan to change the working model of your practice or clinic in the future. For instance, broadening the services and not remaining limited to cash transactions.
How to Obtain an NPI?
The Centers for Medicare and Medicaid Services is the governing body for National Provider Identifier numbers and assigns NPIs to medical specialists. It provides NPIs through the National Plan and Provider Enumeration System (NPPES).
Here are the three ways to get an NPI.
- Visit the NPPES website and fill out the online application
- Download the paper application form from CMS.gov. Fill it out and submit.
You can allow your employer or a trusted organization to get an NPI for you using bulk registration or Electronic File Interchange (EFI). Visit CMS.gov to learn more about Electronic File Interchange.
Can Nurses Get an NPI Number, and Do They Need It?
Yes, nurses can get an NPI number and are eligible for it. However, even if they don’t have one, they can continue to perform as before. Their eligibility for an NPI depends on their responsibilities and the role they’re fulfilling at a healthcare practice.
For easy understanding, let’s break it down into smaller pieces.
Nurses Who Require NPI
Those nurses who work independently to provide healthcare services must have an NPI. It helps them bill insurance and get reimbursements for their services. The following are the nurses who need NPI numbers.
Nurse Practitioners
They primarily work as independent healthcare providers. They also prescribe medications and diagnose certain conditions. Hence, to get reimbursements against their services, they require an NPI to file claims. Nurse practitioners who work independently must have a Type 1 NPI.
Certified Nurse Midwives
When a practicing midwife-nurse wants to file a claim to insurance for maternity or birth-related services, they can do it once they have an NPI.
Clinical Nurse Specialists (CNSs)
Clinical Nurse Specialists are the ones who provide direct patient care. So, they’re allowed to bill directly for their services, for which they require an NPI.
Registered Nurses or Licensed Practical Nurses Working Independently
These nurses are legally allowed to provide services under their own name. They also have the permission to perform as independent contractors. So, to get payment against their services, they must have an NPI number to bill the insurance.
Nurses That Do Not Require an NPI
Above, we discussed the types of nurses who either worked independently or were legally allowed to file claims against their services. They required an NPI to go through the process of billing insurance companies.
However, not all nurses are mandated to have an NPI, and now we’re going to discuss those who do not require an NPI.
Nurses That Don’t Require an NPI
If Registered Nurses (RNs) and Licensed Practical Nurses (LPNs) are working under a physician or in an organization where the billing structure doesn’t allow them to bill independently, they don’t need an NPI. Their services are billed directly under the employer or organization’s NPI.
Those nurses who aren’t directly related to patient care and serve in administrative departments, support, or educational roles don’t require an NPI.
Do You Require an NPI If You Submit Paper Claims?
If you don’t verify patient’s insurance eligibility online or send only paper claims, as a healthcare provider, you are allowed to work without an NPI. As mandated by the Health Insurance Portability and Accountability Act, if a medical specialist doesn’t deal with electronic submissions and transactions, they can continue to work without this 10-digital unique identifier.
However, if you opt for a National Provider Identifier, it is beneficial for you in the long run. It will help you simplify interactions with many insurance providers by serving as a unique provider.
Benefits of NPI for Healthcare Providers
Let’s now take you through some key advantages of NPIs for healthcare providers.
Unique and Permanent Identification
Each healthcare provider receives a unique, permanent identifier, minimizing confusion and eliminating duplication across systems.
Simplified Billing and Claims Processing
The NPI streamlines the process of submitting claims to insurance companies, Medicare, and Medicaid, making billing more efficient.
Effortless Data Sharing
With an NPI, providers can securely and accurately exchange information across electronic health systems, improving collaboration.
Nationwide Consistency
The NPI ensures healthcare providers are recognized uniformly across all states and healthcare organizations.
Reduced Administrative Burden
By using a single identification number for multiple payers, the NPI helps cut down on paperwork, saving time and resources.
Benefits of NPI for Patients
Now that you’ve understood the benefits of NPIs for healthcare providers, here are some of its advantages for patients.
Greater Accuracy
The NPI reduces the likelihood of billing errors caused by confusion over provider identification, ensuring patients receive accurate bills.
Better Coordination of Care
It enables seamless communication between healthcare providers, enhancing the quality of care patients receive.
Faster Insurance Approvals
Patients experience quicker claim approvals and fewer delays, leading to a smoother insurance process.
Transparency and Trust
The NPI allows patients to easily verify their healthcare provider’s credentials, fostering greater trust and confidence in their care.
By using a standardized NPI system, healthcare providers and patients benefit from streamlined processes, improved accuracy, and enhanced trust in the healthcare system.
Crucial Factors About NPIs to Keep in Mind
- An NPI is a distinctive number associated with a specific individual healthcare provider or an organization.
- This 10-digit number doesn’t contain any hidden information regarding the provider.
- National Provider Identification numbers don’t change, nor do they expire even after many years.
- They replace older transaction identifiers like Medicaid Aetna or Cigna numbers.
- All solo healthcare providers and organizations providing care services are eligible to apply for an NPI number anytime.
- NPIs are mandatory for all those healthcare providers that transfer information and data electronically.
How to Use The NPI Registry?
The NPI registry on NPPES can be accessed freely and with ease. It is a government-backed tool that lets the users go through detailed information regarding solo healthcare providers and organizations via an NPI lookup. This tool is free and available 24/7 for everyone. It assists healthcare entities in verifying healthcare provider information.
To search for specific healthcare provider-related data, users must enter the unique NPI number, provider name, or the name of the organization. Once they enter the required information and click on search, they’ll be shown the required information.
Conclusion
The National Provider Identifier (NPI) is a vital 10-digit code for identifying healthcare providers and organizations. Type 1 is for individual providers, while Type 2 is for organizations.
NPIs streamline billing, ensure HIPAA compliance, and enhance trust and efficiency in healthcare. Whether billing insurance or not, having an NPI is a smart move for any provider.
