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 number meaning the different types, 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 NPI the Same as a License Number?
An NPI number is completely different from a license number. The NPI 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 will not change when you change practices or work in different settings. You will have only one individual NPI which will be used by all health plans who are covered entities.
What is an NPI Number Used for?
NPIs in medical billing are used to increase the efficiency and effectiveness of the electronic transmission of personal health information.
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.
NPIs 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 and Type 2 NPI. Below is a detailed description of the two types of API numbers.
Types of NPI Numbers
There are two different groups of NPI numbers: Type 1 and Type 2.
- NPI Type 1, or rendering, NPIs include healthcare providers who operate individually, usually as a sole proprietor. The number of different office locations, other employees, and if those employees have EIN 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, or organizational, NPI on the other hand, is required for group healthcare organizations and practices. If your organization, composed of multiple wellness providers, provides superbills or CMS-1500s to your patients, you must have a Type 2 NPI. They allow your entire group to become credentialed with an insurance payer, rather than having to undergo the process for each individual provider. 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 and 2 NPIs 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).
The only exception to individual providers needing just a Type 1 NPI is if they choose to incorporate their 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?
To get your unique NPI number, you must apply through CMS. There are three different ways to apply:
- Web-based application: Log onto the National Plan and Provider Enumeration System (NPPES) and apply
- Electronic File Interchange: Agree to have an EFI organization submit an application on your behalf if applying with a group of providers
- Paper application: Mail in the paper application to the NPI Enumerator to have your application manually added to the system
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.
How Long Does it Take to Get an NPI Number?
There is no exact amount of time that it takes to receive your number after applying, but it is recommended to follow up with the NPPES after 15 days if you have not received your number yet.
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 lookup is also useful if you’re seeking to verify the NPI number (and correct name spelling) of another healthcare provider.
Healthie for Insurance Billing
NPIs play an important role in medical billing. Using Healthie’s intuitive insurance billing feature, create a CMS-1500 claim and seamlessly submit it to your clearinghouse. Add your NPI number along with other business details (ie. locations, tax information, etc) to your business profile within Healthie, to then autofill during the claim creation process -- reducing claim errors and saving significant time on billing.
Monitor claim status and store client’s telehealth insurance information throughout the billing process for simplified insurance billing. Utilize Healthie’s integration with Office Ally for direct claim submission and to streamline your billing process.
If you do not take insurance at your practice, you can still create Superbills within Healthie so that clients may submit to their insurance provider on their own.
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