Learn what an NPI number is used for and how to apply for one with Healthie. Discover the difference between Type 1 and Type 2 NPI numbers.

When becoming a healthcare provider, there are a variety of steps that must be taken to ensure proper compliance with a variety of standards, such as HIPAA and insurance credentialing.  Taking all of these steps is crucial to ensure that your business is HIPAA-compliant and that you have the smoothest reimbursement process possible.  One of these steps includes obtaining an NPI number, or National Provider Identifier number.  Here, we’ve compiled everything you need to know about NPI numbers including the different types of NPI numbers, and how to obtain your own.

What is an NPI number?

An NPI number, or National Provider Identifier, is a 10-digit numeric identifier given to all covered providers as an Administrative Simplification Standard under HIPAA. Because it is simply a 10-digit number, it contains no personal information regarding the provider and therefore will not change throughout your career, even if your personal information changes. All covered providers must use their NPIs during administrative and financial transactions during a HIPAA standard transaction, which is the transfer of information between two parties for specific purposes.

Is an NPI number the same as a license number?

An NPI number is completely different from a license number. The NPI number does not replace any other numbers used for other identification purposes, including a provider's tax identification number, DEA, state license, or social security number. It does, however, replace any previous identification numbers that providers used for healthcare information including claims, transactions and billing.

Does your NPI ever change?

Your NPI number will not change when you change practices or work in different settings. You will have only one individual NPI number which will be used by all health payers – it’s your unique identifier number as a healthcare provider. However, many multi-provider practices will also obtain a second type of NPI, called a Type 2 NPI, as a group identifier, more on that below. 

What is an NPI Number Used for?

NPI numbers in medical billing are used to increase the efficiency and effectiveness of the electronic transmission of personal health information, or PHI. 

NPI numbers must be obtained by any healthcare provider or organization that is a HIPAA-covered entity. A HIPAA-covered entity includes:

• A healthcare provider who conducts certain transactions in electronic form
• A healthcare clearinghouse
• A health plan, such as commercial plans, Medicare, and Medicaid

Essentially, if you electronically transmit personal health information under a HIPAA standard transaction, you are considered a HIPAA-covered entity. If a covered entity engages with a business associate who will have access to personal health information, they must have a BAA that details specifically what the business associate does and requires that they are HIPAA-compliant.

NPI numbers are not a way to become automatically enrolled in a health plan; ensure you are licensed or credentialed or guarantee insurance reimbursement. Those are all essential steps that still need to be taken as you become an insurance-based and HIPAA-compliant provider.

Does an LLC need an NPI number?

Not every LLC is required to obtain an NPI number. Providers who have formed a single-member LLC are only eligible for a Type 1 NPI. Providers classified as a partnership or corporation LLC are required to obtain both a Type 1 NPI and Type 2 NPI. Below is a detailed description of the two types of NPI numbers.

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Types of NPI numbers

There are two different groups of NPI numbers: Type 1 and Type 2.  

NPI Type 1: Also known as a rendering NPI and is applicable to healthcare providers who operate individually, usually as a sole proprietor. The number of different office locations, other employees, and if those employees have EINs does not change your eligibility for a Type 1 NPI.  All healthcare providers should obtain an individual Type 1 NPI at the start of their career, as it acts similarly to your social security number; it allows you to be easily identified as a healthcare provider. 

NPI Type 2: Also known as an organizationalNPI and  is required for group healthcare organizations and practices.  Your organization must have a Type 2 NPI if it is composed of multiple wellness providers or provides superbills or CMS-1500s to your patients. This allows your entire group to become credentialed with an insurance payer, rather than having to undergo the process for each individual provider at your practice. Type 2 NPIs indicate that the reimbursement should be made to the organization, rather than to the individual provider. 

Type 2 NPIs also allow the insurance company to not only identify the individual healthcare provider issuing care (through the Type 1 NPI), but also the organization under which the healthcare provider operates. When billing, it is important that providers who are part of an organization put both the Type 1 NPI and 2 NPI on their insurance forms, or it is very likely their claim will be rejected. If we examine the standard CMS-1500 insurance form, we can see that there are boxes for both Type 1 and Type 2 NPIs on the form. Box 24J is for the “Rendering Provider ID” (NPI 1) and Box 33A is for the “Billing Provider” (NPI 2).  

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The only exception to individual providers needing just a Type 1 NPI is if they choose to incorporate their private practice. In most cases, they will be required to obtain a Type 2 NPI, even if they continue to be the only provider at the practice. 

How do I apply for an NPI number? 

You must apply for your NPI number through CMS. There are three different ways to apply:

1. Apply online: Log onto the National Plan and Provider Enumeration System (NPPES) and apply.  
2. Electronic File Interchange: Agree to have an EFI organization submit an application on your behalf if applying with a group of providers
3. Paper application: Mail in the paper application to the NPI Enumerator to have your application manually added to the system

The quickest and easiest way to obtain your way is to leverage the first option and apply directly with the NPPES online. The NPPES has a step-by-step tutorial available here. 

There is no cost associated with applying for an NPI number, as it is a HIPAA standard that must be obtained by every healthcare provider. 

Tip: There may be an instance where an employer has applied for an NPI number on your behalf (ie. if you work in a hospital system). You may want to search the NPPES database first to ensure you don’t already have an NPI number associated with your name. Your NPI number is a matter of public record, so no login is required to leverage the search functionality. 

How long does it take to get an NPI number?

According to CMS, providers who submit a correctly completed electronic application can receive their NPI in fewer than 10 business days. For paper applications, the review process typically takes around 20 business days. Any errors in the application may result in further delays in obtaining the NPI.

While there is not an exact amount of time that it takes to receive your number after applying, it is recommended to follow up with the NPPES after 15 days if you have not yet received your number.  

To find an already existing NPI number, you can easily search the NPPES NPI Registry. If a provider has an NPI number, it should appear here. This does not mean the provider is currently licensed or credentialed. NPI number lookup is also useful if you’re seeking to verify the NPI number (and correct name spelling) of another healthcare provider. 

Next steps: what to do with an NPI number 

Once you have your NPI number, you're officially recognized in the healthcare system. Here’s what you can do with it:

1. Get Credentialed with Insurance Payers

An NPI is essential for becoming credentialed with insurance companies, allowing you to bill insurance for your services. Each payer will have its own application process, so start by identifying the insurance companies that align with your practice and patient demographic. Being credentialed not only expands your reach but also offers patients more payment options.

2. Submit Insurance Claims

If you plan to accept insurance, your NPI will be used on claims submitted to payers. It’s a vital piece of information that identifies you as the healthcare provider rendering services. Whether you’re using a billing service or handling claims in-house, your NPI number must be on every claim.

3. Build Your Practice's Reputation

Your NPI number is public information, so potential patients or other providers can look you up in the NPI registry. Keeping your details accurate in this registry not only ensures that you're easy to find but also helps build your professional credibility.

4. Apply for Grants and Contracts

Your NPI is also used when applying for government or private contracts and grants. Whether you’re looking for research funding, entering into a service agreement, or expanding your practice, this number is a must-have.

5. Simplify Administrative Tasks

Having an NPI number can streamline various administrative tasks, from signing up for healthcare networks to working with Electronic Health Record (EHR) platforms. Many systems require this identifier to sync your practice with insurers, billing, and other key operational tools.

Your NPI is more than just a number—it’s a gateway to growing and formalizing your healthcare practice.

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